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The WIC program was created in 1972 in response to growing evidence of poor nutrition and related health problems among low-income infants, children, and pregnant women. It is intended to serve as an adjunct to good health care during critical times of growth and development. In addition, WIC was designed to supplement the Food Stamp Program and other programs that distribute foods to needy families. Several population groups are eligible for the supplemental foods and nutrition services offered by WIC. Eligible groups include lower-income pregnant women, nonbreastfeeding women up to 6 months postpartum, breastfeeding women up to 1 year postpartum, infants, and children up to age 5 who are at nutritional risk. WIC provides cash grants to support program operations at 88 state-level WIC agencies, including those in all 50 states, American Samoa, the District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands, and 33 Indian tribal organizations. Food and NSA grants are allocated to the state agencies through a formula based on caseload, inflation, and poverty indices. Small amounts are also set aside and distributed, at USDA’s discretion, to fund updates to infrastructure—like the development of electronic benefit transfers—and to fund evaluations performed by state agencies. Some state-level agencies that operate the program at both the state and local levels retain all of their WIC grants. The remaining state-level agencies retain a portion (the national average is about one-quarter) of the funds for their state-level operations and distribute the remaining funds to nearly 1,800 local WIC agencies. In 1998, state and local WIC agencies relied primarily on their federal NSA grant funds to support their NSA operations. Although no state-matching requirement exists for federal WIC funding, some state WIC agencies have received supplemental funds from their state governments for NSA. Some state and local WIC agencies also receive in-kind contributions, such as office space, from nonfederal sources such as local governments and private nonprofit agencies. NSA grants cover the costs of providing various nutrition services— participant services, nutrition education, and breastfeeding promotion. Participant services include numerous activities such as determining eligibility, food benefit distribution, screening for up-to-date immunizations, and referrals to other health or social services. Each of these activities includes many processes. For instance, we reported in September 2000 that certification involves identifying income, participation in a qualifying program such as Medicaid, pregnancy or postpartum status, and medical or nutritional risks. The length of time that a person is certified to participate in the program typically ranges from 6 months to 1 year, depending on such factors as whether the participant is a woman, a child, or an infant. Nutrition education consists of individual or group education sessions and the provision of information and educational materials to WIC participants. Regulations require that the nutrition education bear a practical relationship to participant nutritional needs, household situations, and cultural preferences. Nutrition education is offered to all adult participants and to parents and guardians of infant or child participants, as well as child participants, whenever possible. It may be provided through the local agencies directly or through arrangements made with other agencies. Individual participants are not required to attend or participate in nutrition education activities to receive food benefits. Breastfeeding promotion activities focus on encouraging women to breastfeed and supporting those women who choose to breastfeed. Each local agency is required to designate a breastfeeding coordinator, and new staff members are required to receive training on breastfeeding promotion and support. WIC endorses breastfeeding as the preferred method of infant feeding. Although state agencies must operate within the bounds of federal guidelines, they have the flexibility to adjust program services to meet local needs. States can add program requirements. For example, in 1999, Montana required its local agencies to formally document referrals made to WIC participants, though this is not required by program regulation. States that utilize local agencies to provide nutrition services also provide these local agencies with some discretion in implementing the local program. This means that the specifics of the WIC program can vary from state to state and locality to locality. In 2001, USDA and the National Association of WIC Directors (NAWD) distributed revised Nutrition Service Standards that provide WIC agencies with guidelines on providing high-quality nutrition services. The WIC program faces the following challenges in delivering high-quality nutrition services: (1) coordinating its nutrition services with health and welfare programs undergoing considerable change; (2) responding to health and demographic changes in the low-income population that it serves; (3) recruiting and keeping a skilled staff; (4) improving the use of information technology to enhance service delivery and program management; (5) assessing the effect of nutrition services; and (6) meeting the increased program requirements without a corresponding increase in funding. Over the past decade, major changes in the nation’s health and welfare delivery systems have presented WIC agencies with the challenge of identifying and enrolling eligible participants and coordinating with other service providers in a new environment. More specifically, state Medicaid agencies’ increased reliance on private managed care organizations has reduced the service delivery role of local public health agencies, the entities with which WIC agencies have had a long-established relationship. As a result, WIC’s link to the health care system has been weakened, making it more difficult for WIC agencies to identify eligible individuals and coordinate services with their participants’ health care providers. Additionally, changes brought about by welfare reform—which include the elimination of Temporary Assistance for Needy Families (TANF), Food Stamp, and Medicaid benefits for many individuals including noncitizens— have decreased WIC’s ability to reach eligible individuals through these programs. Two recent and related changes in the health care system are presenting new challenges to WIC agencies in carrying out their referral, outreach, and coordination efforts. The first change is the rapid growth since 1991 in the percentage of Medicaid beneficiaries who are enrolled in managed care (see fig. 1). This increase in the percentage of Medicaid beneficiaries receiving health services from managed care providers contributed, in part, to the second change: the reduction or elimination of direct health care services by many local public health departments. According to a national survey of local health departments offering comprehensive primary care services in urban areas in 1995, about 20 percent stopped providing such services to women and children by 1999. Similarly, about 9.4 percent of those offering comprehensive primary care services to women in nonurban areas in 1995 stopped providing such services by 1999, and 15.5 percent of nonurban agencies stopped providing such services to children. With the reduction in the number of public health departments serving women and children, public health officials have increasingly turned to WIC to help address the health needs of low-income children. According to CDC, WIC has become the single largest point of access to health- related services for low-income preschool children. Consequently, the CDC has turned to WIC to provide services traditionally performed by local health departments, such as identifying children who are not fully immunized. These changes have several implications for WIC. Historically, many WIC participants have been able to receive health services, such as pediatric care, at the WIC sites. This proximity could facilitate the required link between WIC services and health care; health care providers could easily refer Medicaid and uninsured patients to the WIC program, and WIC staff could easily refer WIC participants to appropriate health care services. This arrangement also made it more convenient for participants to schedule appointments for both WIC and health services. However, as Medicaid managed care providers have increasingly replaced local public health clinics as providers of maternal and child health care, this link between WIC services and health care has weakened. The convenience for many WIC staff and participants of having WIC and health care services co-located has been lost. As a result, many WIC agencies must extend their outreach efforts to contact people, especially uninsured individuals not connected with the health care system, who are eligible for WIC. Given these changes, it will be a challenge for WIC to effectively coordinate its services with other health providers. Evidence already suggests that WIC agencies are struggling with this coordination. For example, a national survey conducted by the Women’s and Children’s Center at Emory University’s Rollins School of Public Health found that only 26 percent of state WIC agencies had made specific arrangements, such as developing formal guidance, for the collaboration of services between WIC and managed care providers in 2000. The Center published a resource guide to assist in the collaboration between WIC and managed health care. The guide identified several barriers to the coordination between WIC and managed care providers and provided descriptions of strategies that state and local WIC agencies can use to overcome such barriers, though it suggests that employing suggested strategies will increase staff responsibility and program costs. The barriers include the following: Lack of understanding. WIC staff do not understand the managed care system and managed care providers do not understand WIC. Lack of specific requirements. State Medicaid agencies may not have instituted specific contractual requirements for managed care organizations or providers to make referrals or supply needed information to WIC agencies. Communication difficulties. Managed care providers’ change in ownership has been accompanied by communication difficulties. The termination of Medicaid contracts with managed care providers and the location of some managed care provider headquarters in another state can also make communication difficult. Welfare reform, which made major changes to the nation’s social safety net, has also placed new demands on WIC’s client services and outreach. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193), which replaced the Aid to Families with Dependent Children with TANF, established a lifetime, 5-year time limit on the receipt of TANF benefits and required states to place work or work-related requirements on a percentage of households receiving TANF. The act also made several categories of noncitizens ineligible for TANF, food stamps, and Medicaid. Welfare reform has contributed to the decline in the participation in public assistance programs. Various studies, including those that we have conducted, have concluded that the implementation of the provisions of welfare reform is associated with the decline of eligible individuals enrolled in the Food Stamp Program and Medicaid. Although we did not identify any nationwide assessment of welfare reform’s impact on WIC participation, state and/or local WIC officials from all six of our case study agencies reported that welfare reform has decreased program participation by eligible individuals, including noncitizens and working women. Declining participation in assistance programs may complicate WIC client services, such as making eligibility and referral determinations. Individuals who receive TANF, food stamps, or Medicaid automatically meet WIC’s income eligibility requirement—documentation of their enrollment in one or all of these programs is sufficient proof that they qualify financially for WIC. However, as the number of WIC applicants who are enrolled in these programs decreases, WIC staff members may need to spend more time collecting and reviewing other documents to determine whether applicants meet income eligibility requirements. Moreover, the responsibility of WIC staff to make appropriate referrals to other programs, both public and private, may grow at those agencies where WIC has become a gateway to the social safety net for low-income individuals. Restrictions on providing welfare benefits to noncitizens may require WIC to increase its outreach efforts among these groups. With welfare reform, several categories of noncitizens are no longer eligible for TANF, food stamps, or Medicaid. However, noncitizens continue to be eligible for the WIC program. The National Advisory Council on Maternal, Infant and Fetal Nutrition, as well as WIC officials from several of our case studies, suggested that noncitizens may fear that participating in WIC could threaten their immigration status. Welfare reform’s emphasis on work has created the challenge of making WIC services accessible to a population with new demands on their time. In five of our six case study sites, WIC officials attributed declines in WIC participation, in part, to the increase in the number of women who were working or attending school due to welfare reform. At three case study sites, WIC officials indicated that the increasing numbers of working women placed increased pressure on WIC agencies to offer WIC services outside of normal working hours. Increasing access, which may involve offering evening or weekend hours, can result in higher costs to the WIC program. WIC faces the challenge of responding to changes in the health and demographics of its participants and potential participants. The WIC population, like the general population, has experienced a dramatic increase in the prevalence of overweight and obesity and related diseases, such as diabetes. In addition, demographic changes, such as increases in WIC’s ethnic population, have occurred during recent years. These changes have placed demands on WIC agencies to play a more active role in helping to treat and prevent nutrition-related health problems and adapting nutrition services to the evolving needs of program participants. The nation’s population has experienced a dramatic increase in the prevalence of overweight and obesity in recent years. According to the CDC, the prevalence of overweight and obesity has reached epidemic proportions. For example, the prevalence of overweight adults increased over 60 percent between 1991 and 2000. Research suggests that the prevalence of overweight and obesity is even higher among individuals who are low-income, a characteristic of the WIC population. The surge in the prevalence of overweight and obesity is not limited to adults. According to the CDC pediatric nutrition surveillance data, which are collected primarily from the WIC program, the prevalence of overweight children age 2 and older (but younger than 5), increased by almost 36 percent from 1989 to 1999. In 1999, almost 10 percent of children in this age group were overweight or obese. Some children are at even greater risk. Hispanic children, a growing segment of the WIC population, had the second highest prevalence of being overweight according to the 1999 CDC pediatric surveillance data. For both adults and children, being overweight and obese is associated with a variety of health problems, including diabetes, heart disease, and some types of cancer. As the prevalence of overweight and obesity has increased, research suggests that the incidences of diabetes during pregnancy and diabetes in adults have also increased. Recognition of this epidemic, particularly its effect on low-income women and children, has increased the pressure on WIC agencies to adapt their nutrition services to help prevent and treat overweight, obesity, and related health problems. In addition to helping to respond to this epidemic, WIC must continue to serve low-income women and children who are susceptible to other diseases, some new and some long-standing, such as anemia, HIV/AIDS, elevated levels of lead in blood, and tooth decay. The nutrition education and breastfeeding promotion activities provide an opportunity for WIC staff to help participants prevent these diseases. However, WIC faces several obstacles—such as limited time and resources—in adapting its nutrition education to respond to these new and long-standing health issues. WIC staff has limited time to provide the type of counseling needed to discuss disease prevention. Our study of six local WIC agencies found that individual nutrition education sessions did not last long, ranging from an average of 4 minutes to 17 minutes among the six agencies. In addition, WIC regulations require only two nutrition education contacts during each 6-month WIC certification period. It is difficult to help prevent numerous nutrition-related diseases with a few brief nutrition education sessions. WIC nutrition education was originally intended, according to USDA officials, to provide a relatively basic message about the value of good nutrition to low-income pregnant and postpartum women whose diets were inadequate. To help address more complex nutrition problems, such as obesity, according to a CDC expert on nutrition, WIC’s nutrition education needs to be fundamentally changed in several ways. This expert indicated that nutrition education has focused traditionally on advising families to eat more fruits and vegetables. He suggests it now needs to focus more on teaching parents that they need to be responsible for the types of food offered to their children and let children decide how much to eat. In addition, the CDC expert indicated that the scope of nutrition education needed to be expanded to include such topics as physical activity, television viewing, and fast foods. Local WIC agencies tend to rely on two techniques to provide nutrition education. According to a 1998 USDA survey, over three-quarters of local WIC agencies always used counseling/discussion and written materials to provide nutrition education. Less than 10 percent of the agencies in the survey reported using other techniques such as food tasting or videos to provide nutrition education. Several experts have suggested that WIC agencies need to use multiple teaching techniques. They also suggested that these techniques be tailored to each participant and that the participant be included in designing the education that best meets his or her needs. While USDA has undertaken several initiatives, existing resources appear to limit the program’s ability to address emerging health issues. To develop and implement a response to diseases such as obesity, WIC would need to devote additional resources to nutrition education, according to CDC and USDA officials. Devoting resources to address new health issues may come at the expense of other program priorities. In addition, current WIC program regulations on the use of resources may limit the effectiveness of the response to some emerging health issues. For example, costs associated with providing physical activity classes and equipment, which appear to be important in addressing weight problems, are not allowable expenditures. Any strategies that WIC employs to address health issues such as obesity would have to contend with some formidable social forces. Two of these forces are the prevalence of advertising and the decrease in physical activity. Advertising has a significant impact on eating behaviors. For example, one study found that 1 or 2 exposures to advertisements of 10 to 30 seconds could influence preschool children to choose low-nutrition foods. Research also shows that several environmental trends, such as increased television viewing and increased consumption of fast foods, have contributed to obesity nationally. According to government statistics, numerous changes in the demographics of the nation’s population have occurred during the 1990s. Several of these changes—shifts in the population’s ethnic composition, increases in the number of working women, and the growing number of preschool children enrolled in daycare—were also seen in the WIC-eligible population. WIC is faced with the challenge of responding to each of these changes. Over the years, the ethnic composition of the WIC population has changed. In 1988, almost half of WIC participants were white and over one-quarter were African-American. The composition began to change in the mid- 1990s when the number of Hispanic WIC participants began to grow. Between 1994 and 1998, the percentage of WIC participants who were Hispanic increased from 26 percent to 32 percent. During the same period, the percentage of WIC participants who were African-American declined from about 25 to 23 percent, while there were only slight changes among other racial or ethnic groups. Some WIC agencies serve more ethnically diverse communities than others. For example, three of our five local case study agencies served predominantly white communities, while two agencies served very diverse populations. One local agency director reported that less than one-quarter of their WIC participants spoke English as a primary language. As a result of the changing make-up of WIC’s participant population, WIC agencies are faced with the challenge of providing nutrition services that are culturally and ethnically appropriate, as the program requires. Recent data suggests that WIC agencies offer nutrition education in several languages. Over half of the local agencies responding to a 1998 USDA survey indicated that nutrition education was available in Spanish.Providing nutrition education and other services in a foreign language requires agencies to employ staff members who speak languages other than English or pay for interpreter services which can be costly. In addition, USDA and state and local WIC agencies have developed teaching materials, such as brochures, in foreign languages. WIC agencies may need to increase staff awareness of the different nutritional needs and preferences of the various ethnic and cultural groups that they serve. For example, research conducted in the early 1990s involving urban African-American WIC mothers suggested a tendency to introduce infants to solid food in the first few weeks of life, rather than waiting 4 to 6 months, as recommended. This practice occurred despite receiving WIC counseling and educational materials. Understanding the distinctive nutritional preferences of participant groups requires WIC staff to dedicate time to studying different cultures and related health and nutrition research, a particularly challenging task for WIC agencies that serve several ethnic or cultural groups. As composition of the WIC population has changed, the percentage of women in the WIC program who work has increased, according to some state WIC officials. In 1998, about 25 percent of women who were certified or certified a child for the WIC program were employed, according to data provided by USDA. While no data exist on the change in recent years in the percentage of women participants who are working, data from Bureau of Labor Statistics suggest that work activity has increased in low-income households with children. Between 1990 and 1999, the percent of children living below the poverty level in families maintained by two parents with at least one parent employed full-time increased from 44 to 52 percent. The percent of poor children living in families maintained by a single mother employed full-time increased from 9 to 18 percent. To respond to the increase in working WIC families, WIC agencies are faced with the challenge of making nutrition services accessible to individuals with greater constraints on their time. Some WIC agencies have offered services that accommodate individuals who keep traditional work hours. For example, 26 percent of the local WIC agencies responding to USDA’s 1998 survey indicated that they offered extended hours, such as evening or weekend hours; fewer than 3 percent had mobile facilities that could potentially visit work or community sites. Four of our five local case study agencies offered extended hours on a few days each month, either in the evenings or on weekends, for a few hours. Several factors may limit the ability of local agencies to improve access to services for participants who work. First, local agencies may lack the resources to pay for the staff or the security needed to have their sites open during evening or weekend hours. Second, federal regulations generally require participants to pick up vouchers in person when they are scheduled for nutrition education or for recertification, which limits WIC agencies’ ability to employ other strategies such as mailing vouchers to participants’ homes. Third, providing WIC services at nontraditional locations, such as grocery stores, that may be more convenient for those who work, may infringe on the participants’ privacy and present a conflict of interest. The increase in the number of WIC participants who work will make attaining some of WIC’s goals, such as increasing breastfeeding, a greater challenge. Employer policies can affect the length of time a woman employee breastfeeds. One study found that the duration of the work leave significantly contributed to the duration of breastfeeding. In addition, businesses that employ WIC mothers may not provide accommodations that support daily breastfeeding needs. A 1996 survey of over 500 WIC mothers found that less than 2 percent of those who went to work or school reported having such accommodations, such as the ability to bring a baby with them or being provided facilities for breastfeeding. In 2000, WIC mothers who worked full-time had the lowest breastfeeding rate for infants at 6 months of any category of WIC mothers, even though they initiated breastfeeding in the hospital at about the same rate as other mothers. To respond to this challenge, WIC staff might need to work with employers and schools to encourage the adoption of procedures and facilities that support breastfeeding among employees and students. As a result of the increase in the number of working parents, low-income children are increasingly placed in daycare. In a recent study, we concluded that since the implementation of TANF, more low-income children were in care outside the home and were in this care earlier in their lives. Children who are in daycare may be unable to accompany their parents to WIC office visits for vouchers and nutrition education. As a result, WIC staff may have little opportunity to provide age-appropriate nutrition education directed at preschoolers, though evidence suggests such education contributes to positive eating behaviors. According to USDA’s 1998 survey, only about 38 percent of local WIC agencies provided nutrition education directed to WIC preschoolers. Since meals and snacks are usually provided in daycare settings, daycare providers play an important role in shaping the nutritional behavior of preschoolers. As more low-income preschoolers enter daycare, WIC may need to explore ways to broaden its nutrition education efforts to include the daycare providers serving WIC children more systematically. WIC faces the challenge of maintaining a skilled staff. The quality of nutrition services depends, to a large degree, on the skills of the staff delivering the services at the local WIC agencies. Yet, due in part to the widespread difficulty in hiring professionals, local agencies are increasingly relying on paraprofessionals to provide services. At the same time, social and systemic changes have heightened the need for WIC staff to learn new skills. However, investing in training is difficult for agencies with limited resources. Possible solutions to address WIC’s staffing and training needs are unclear because the staffing needs have not been assessed and there is not a defined commitment to training. Many local WIC agencies recently reported an insufficient number of professional staff and difficulty acquiring professional staff members. A 1998 USDA survey found that 30 percent of local WIC agencies serving over 40 percent of WIC participants reported having too few professional staff members. About half of all WIC agencies reported having difficulty recruiting and hiring professional staff. We estimated, based on information obtained from our survey of local WIC agencies, that in fiscal year 1998 between 5 percent and 15 percent of local WIC agencies did not have a nutritionist or dietitian on staff. The shortage of professional staff at WIC agencies is influenced by several factors, some of which are external to the WIC program. The most commonly reported difficulty associated with recruiting and hiring professional staff was that the salaries and/or benefits were not competitive. Another commonly reported difficulty was the lack of qualified applicants. According to a director of the American Dietetic Association, several factors may negatively affect the ability of WIC agencies to recruit registered dietitians, including the mundane nature of the work and the rural location of many agencies. The shortage in professional staff may worsen in the coming years. According to the Association director, who is also a state WIC director, WIC’s workforce is aging and a large number of professionals are expected to retire in the next few years. Many local agencies are relying more on paraprofessionals to provide nutrition services. According to data from USDA surveys, paraprofessionals now perform tasks that were once performed by professionals. In 1988, fewer than 2 percent of local agencies reported using paraprofessionals to provide nutrition education to high-risk participants and between 11 and 18 percent reported using them to provide nutrition education to low-risk participants. By 1998, this had changed considerably. That year, about 17 percent of agencies used paraprofessionals, along with professionals, to provide nutrition education to high-risk individuals and between 42 percent and 50 percent used them to provide nutrition education to low-risk individuals. The shift towards a greater reliance on paraprofessionals may be attributed to several factors. The difficulty in hiring professionals and the foreign language skills more often possessed by paraprofessionals may both play a role in this phenomenon. In addition, USDA officials pointed out that the required qualifications for competent professional authorities, who provide nutrition services, are “ridiculously low.” Consequently, WIC agencies are able to hire paraprofessionals to positions previously filled by professionals. As a result of the increased reliance on paraprofessionals, USDA officials and other experts have become concerned that the quality of nutrition services will suffer. The types of services that agencies offer may become increasingly limited without staff whose qualifications support a full range of services. Already, some WIC agencies have limited the services they provide. For example, in Montana where some local WIC agencies did not have registered dietitians on staff, state policy in 1999 prohibited all local WIC agencies from providing the type of nutrition counseling needed to address conditions such as gestational diabetes. According to a local agency director, not only did this restriction affect the quality of services provided to participants, but also it was a disincentive for registered dietitians to apply for WIC jobs because it limited their ability to use their skills. Given the changes in the WIC population and the environment in which the program operates, WIC agencies face an increased challenge of ensuring that their staff have the skills and knowledge to provide effective nutrition services. Many WIC staff may not have the skills and knowledge necessary to meet new client needs. For example, CDC, USDA, and other experts suggest that WIC staff currently lack the skills to address some emerging complex health issues, such as obesity. In addition, WIC staff may not have the knowledge to navigate the new environment introduced by changes in the health and welfare system. For example, the Emory University Rollins School of Public Health publication has suggested WIC staffs’ lack of understanding of the managed health care system has posed a barrier to effective coordination with managed care providers. To help address this lack of skills and knowledge on the part of WIC staff, more training may be needed. According to a CDC nutrition expert, to address emerging health problems, staff must learn to assess participants’ willingness to improve their eating practices and to tailor education to improve participants’ behaviors. In addition, WIC staff needs extra information to provide services in a changing social service environment. For example, they need to understand new requirements with which their participants must comply in order to obtain health care services from managed care providers. While WIC regulations require that state agencies provide in-service training and technical assistance to professional and paraprofessional staff involved in providing nutrition education, USDA officials indicated that no defined commitment has been made to improve the training opportunities for WIC staff. Without such a commitment, some local WIC agencies may be less inclined to invest limited staff time or funding in training or continuing education. For example, one case study agency reported that, because funding constraints left the agency short-staffed, professional staff were performing more clerical duties and had little time for professional development. Another local WIC agency director indicated that her program could not afford to have her attend an annual NAWD conference, even though the conference was being held locally. USDA has no current data about the size and composition of the WIC workforce, a situation that makes addressing staffing and training problems difficult because little is known about the exact nature of the staffing problems. Until 1991, USDA did collect some detailed WIC staffing data for its annual report of WIC administrative expenditures. However, according to USDA officials, one of the reasons the agency stopped collecting these data was to reduce the reporting burden on WIC agencies. While surveys of local agencies conducted for the biannual participant and program characteristics study in 1996 and 1998 gathered some limited data regarding the sufficiency of staff levels, there has been no recent study on the size and composition of the WIC workforce. The lack of data regarding the WIC workforce can present a barrier to developing and implementing strategies to address the workforce challenges facing the program. For example, in 1996 the National Advisory Council on Maternal, Infant, and Fetal Nutrition recommended that USDA explore with HHS revising the National Health Service Corps programs to include nutrition services as a designated “primary health service.” This change would allow federal funds to be used to recruit and train registered dietitians and nutritionists to work in under-served areas. To do this, however, USDA needed data showing sufficient demand for registered dietitians and nutritionists in under-served communities. Although the Council repeated its recommendation in 2000, to date USDA has not collected data regarding the need for public health nutritionists in under- served areas. USDA is sponsoring a survey of the public health nutrition workforce. The survey results, expected to be published in 2002, will include a description of the qualifications, training needs, and other characteristics of the 1999-2000 WIC workforce. However, the survey will not provide information on the demand for dietitians and nutritionists in under-served areas. State and local WIC agencies are faced with the challenge of delivering participant services and managing program operations with outdated or unavailable information technology resources. More than half of state WIC agencies have management information systems that are not capable of automatically performing all the program tasks considered essential by USDA. In addition, while 16 states have been involved in the testing of electronic transfer of WIC benefits, only one statewide system has been implemented. Finally, almost one-fourth of the state WIC agencies, along with hundreds of local WIC agencies, do not have Internet access, limiting their ability to use online resources and communicate with other providers of nutrition and health services. According to a March 2001 USDA report, 56 percent of state WIC agency automated management information systems were not capable of performing, or efficiently performing, 1 or more of 19 essential program tasks. (A listing of the 19 essential program tasks is provided in appendix II.) These tasks were singled out as basic functions that were essential for state agencies to automate in order to attain efficient program operations. For example, management information systems should be able to automatically assess whether an applicant’s income exceeds the maximum income level for eligibility based on data entered into the system. The system should also be able to produce food checks corresponding to the participant’s most recent food prescription at the time the participant is present to pick up the checks at the local clinic and to detect suspicious grocery store food coupon redemption activity. The inability of WIC state agencies’ automated management systems to perform essential tasks can encumber agencies’ ability to efficiently administer program operations. For example, at a local WIC agency in Pennsylvania, we found that the staff was using hand-written index cards to keep track of participant information because they lacked a sufficient number of computers to perform that function. Also, the director at this agency had to spend 6 hours each month manually counting the number of participants in the program to generate the monthly participation report required by the state. This was necessary because the agency’s management information system was not capable of automatically preparing the report. A California WIC official told us that it was difficult for local WIC agencies’ automated systems to create special reports. Because the reports could take up to several months to complete, some agencies opted not to generate them. A USDA official told us that the poor quality of automated systems in some states negatively affects federal and state efforts to monitor WIC agencies. Because of computer inadequacies, some states have not been able to provide USDA with requested data on breastfeeding initiation rates, hampering officials’ ability to assess the effectiveness of breastfeeding promotion. Most states face one or more of the following obstacles that make it difficult to bring their automated systems up to the basic level of functionality: Limited funds. States must meet their management information needs almost entirely from their federal NSA grants. Other funds typically available from outside sources to help defray WIC costs, including those associated with information systems, have declined over the last decade.According to USDA, the cost of bringing WIC’s essential program tasks up to standard in all states over the next 6 years is between $147 million and $267 million. Outdated technology. According to USDA and other federal studies, the life cycle for a WIC automated system is 7 years. After that time, the states’ systems do not lend themselves easily, if at all, to technological advances. About 34 percent of WIC state-level agencies have automated systems that have exceeded their life cycle, 28 percent have systems that will exceed their life cycles in 1 to 3 years, and 38 percent have systems with 4 or more years remaining in their life cycles. Coordination with other systems. WIC was designed to operate in conjunction with programs offered by other social and health-related service agencies. Changes that have occurred in these programs have complicated the ability of WIC program managers to define the functions that their automated systems must support and to identify the system requirements, including the necessary applications and hardware needed to effectively coordinate WIC with other programs. Lack of information technology staff. State and local WIC agencies have difficulty competing with the salaries and benefits offered by private sector employers. This can affect their ability to recruit and retain qualified information technology staff needed to develop and maintain their automated systems. Currently, most WIC food transactions involve paper checks. However, concerns have been raised about the cost to grocers of processing checks and the inconvenience they present to WIC participants. Electronic benefits transfer (EBT), an automated process that allows food to be paid for electronically, offers an alternative to paper checks. With EBT, participants are given a plastic card, similar to a credit or debit card, containing their food benefit prescription to purchase benefits at the grocer’s checkout. USDA and state WIC agencies are exploring the use of EBT in the WIC program to improve the benefit delivery process. Paper checks have a number of drawbacks. A 2000 Food Marketing Institute study that compared the use of WIC’s paper checks for the purchase of food to other methods—including cash, checks, credit and debit cards, food stamps, and EBT—found that WIC checks are among the most costly payment methods for food retailers. The study indicated that the primary reasons for this higher cost are that store staff take more time to process paper checks when goods are purchased and to prepare checks for bank deposit. In addition to high costs, paper checks can cause confusion and delays for both the participant-shopper and the store clerk at the checkout counter and result in unwanted attention. Thus far, EBT for WIC has proven to be much more expensive than paper for states testing this evolving technology, according to USDA officials. However, compared to the use of WIC paper checks, EBT is less expensive for food retailers because it reduces handling costs. In addition, EBT can provide participants with greater flexibility in purchasing food. For example, it will allow them to purchase their benefits in quantities as needed within their issuance period. With paper checks, a participant must purchase all items on the food instrument when shopping or forfeit the benefit. EBT can also provide state officials with documentation of WIC purchases for submitting rebate claims to food manufacturers. By tying EBT to a product code of authorized WIC foods, the program has assurance that participants purchase the prescribed foods and do not improperly substitute foods. EBT may also curtail the waste, fraud, and abuse that can occur with paper checks. USDA is exploring the use of EBT to eliminate the need for paper checks. Since 1991, the agency has provided a total of about $22 million for demonstration projects involving 16 states to explore the use of EBT technology for the delivery of WIC benefits. However, no one knows how soon the widespread use of EBT will be realized in each state, or exactly what form the new issuance system will take. As of October 2001, only Wyoming had implemented a statewide WIC EBT system. Federal legislation, developments in the food retail and electronic funds transfer industries, and emerging technologies will shape the timing and nature of EBT implementation. According to USDA officials, WIC had two overall concerns in venturing into EBT: the technical feasibility and affordability of implementing EBT systems. In the few state projects where EBT has been tested, the first concern has been addressed—EBT is technically feasible. However, so far its affordability for use in WIC remains elusive. According to USDA officials, EBT costs are far beyond what most states can afford within their available NSA funds. WIC agencies would need to modify their NSA funding priorities or find new sources of funds to support their EBT projects. USDA officials also told us that these costs have had to be funded by federal grants at the sacrifice of other competing program priorities. Furthermore, because EBT processes differ in so many respects from those involving paper checks, agencies may face some of the following obstacles in implementing EBT: Limited federal funds. The potential cost of starting up and operating EBT is an issue of considerable importance to all state and local WIC agencies. These costs may not be covered by their NSA funds allocated for technology expenditures. As a result, WIC agencies would need to modify their NSA funding priorities or find new sources of funds to support their EBT projects. Outdated technology. Some local WIC agencies are unable to use EBT because they do not have computers, or they have computers that are unable to accommodate the necessary technology. WIC computer equipment must have the processing speed and communications capability to electronically transmit EBT data. In addition, software changes may also be needed to enable older systems to operate in conjunction with EBT. Lack of an industrywide standard. An industrywide standard for EBT systems that could be used for WIC transactions has not yet emerged. The various EBT technologies must be compatible with retailers’ normal transaction systems to perform the purchase function. The integration of different EBT technologies requires a common operating system standard, such as those used by credit card companies. The absence of such a common nationwide standard makes the widespread development of EBT applications very difficult. The Internet can be used by federal, state, and local agencies for a variety of purposes related to the WIC program. USDA uses the Internet to provide state and local WIC agencies with program information, such as eligibility guidelines, application instructions, program funding, participation rates, and current laws and regulations. USDA also uses the Internet to provide research and training to health and nutrition professionals, including those outside of WIC. USDA has plans to use the Internet to disseminate information to help reduce program fraud and to collect information directly from grocery stores participating in the WIC program. About half of the state agencies and some local agencies that have Internet access have established Web sites for their WIC programs. These sites have been used to provide information—including eligibility guidelines, application procedures, program benefits, and clinic locations—to WIC participants and potential applicants. In addition, some local WIC agencies use the Internet to e-mail state agencies and obtain or provide information on nutrition activities and services. According to USDA, 68 of the state-level WIC agencies had the capability to access the Internet as of July 2001. The capability of local WIC agencies to access the Internet is more difficult to ascertain. However, according to the Director of the National Association of WIC Directors, about half of their 600 local agency members currently have the ability to access the Internet. While the Internet is being used extensively by USDA and many state and some local agencies, the following obstacles have discouraged or prevented some state and local WIC agencies from obtaining Internet access: Limited funds. Accessing the Internet requires the necessary computer equipment that many local WIC agencies and/or their clinics do not possess. The costs of computer installation must compete against other WIC funding demands, such as salaries, utilities, and supplies. Even with the necessary computer equipment, local WIC agencies and/or their clinics may choose to forgo Internet use in some areas because they may have to pay costly long distance charges for the telephone connections to the Internet provider from funds that are competing with other more essential program needs. Security concerns. Although local agencies may have the computer capability to access the Internet, concerns regarding the security vulnerabilities inherent with the use of the Internet, including unauthorized access to files and hostile ‘virus’ attacks on computer systems, may discourage its use. For example, the Pennsylvania WIC agency prohibits Internet connections by its local agencies primarily because of concerns regarding the potential harm that could result from the improper access to sensitive personal information gained by unauthorized persons. In attempting to be responsive to recent requests from the Congress and others, WIC faces the challenge of assessing the effects of providing specific nutrition services. According to USDA officials, the focus on assessing the effects of specific nutrition services is a shift from the early years of WIC when assessments focused on the outcomes associated with overall program goals, such as reducing national rates of anemia, infant mortality, and low birth weight. In order to assess the effects of specific nutrition services, such as nutrition education, USDA needs good outcome measures for each service, consistent information from states regarding the attainment of goals and objectives for each service, and reliable research on the effectiveness of each service. However, to date, the agency has been able to collect data on only one outcome measure related to breastfeeding promotion and support. In addition, USDA has obtained inconsistent data on state goals and objectives and limited information from research studies on the effectiveness of specific nutrition services. To meet the Government Performance and Results Act requirements, USDA has attempted to develop national outcome measures that would allow the agency to determine the effectiveness of WIC’s nutritional services. To date, USDA has had limited success in establishing national outcome measures for WIC’s three key nutrition services—nutrition education, breastfeeding promotion and support, and health referrals. USDA has been able to collect information on only one outcome measure: breastfeeding initiation rate. This measure helps determine the effectiveness of a single nutrition service, breastfeeding promotion and support. Not only is this outcome measure relevant to only one nutrition service, but it also looks at a limited aspect of this service. The breastfeeding initiation rate examines only one of several important aspects of the service’s possible impact on breastfeeding. It does not measure the length of time that WIC mothers breastfeed infants because, despite USDA’ effort to collect data on the duration of breastfeeding, most state agencies were unable to give the agency complete information on this measure. In addition, USDA was unable to collect data on an outcome measure that would determine the percentage of WIC infants’ daily nutrition obtained through breastfeeding because the agency was unable to identify a viable way to collect these data. Although USDA has identified outcome measures for other nutrition services, obstacles have hindered the agency’s success in collecting relevant data. These obstacles include difficulties in identifying the type of data to collect because many variables may be influencing outcomes. For example, there are several other state and local programs that, like WIC, are aimed at improving health through nutrition education. Separating the effects of these efforts from those of the WIC program is difficult at best. USDA has also had few resources to collect appropriate data on measures it identifies. As a result, USDA is unable to implement most outcome measures. USDA’s difficulties in measuring WIC outcomes are not unique. In a previous study, we found that programs that do not deliver a readily measurable product or service or are intergovernmental grant programs have difficulty producing performance measures. As NSA grant recipients, state agencies are required to describe their goals and objectives for improving program operations in their annual program plan given to USDA. However, we found that for several reasons, this information does not provide USDA the data necessary to describe the extent to which WIC is meeting its intended NSA goals. First, no requirement exists that state goals and objectives be reported in a consistent format to USDA. Without consistent information, it is difficult for USDA to aggregate reported state performance information on a regional or national basis. Second, there is no requirement that the goals or objectives be measurable. Our review of a sample of over 400 state goals and objectives for nutrition services from 25 state WIC agencies revealed that over half lacked key information, such as baseline or target values, needed to measure progress toward improving program operations. Third, we observed that the specificity in the description of the goals or objectives varied significantly. For example, some objectives were short, general statements such as, “continue to improve the data integrity of the WIC data warehouse.” Other objectives were very detailed, including such information as the activities undertaken to achieve the objective. Moreover, a wide range existed in the number of goals or objectives identified. For instance, one state had 2 goals and 2 objectives, while another state had 13 goals and no objectives, and still a third had no goals and 24 objectives. Last, unlike the Department of Health and Human Services’ (HHS) Maternal and Child Health Services Block Grant Program, state WIC goals and objectives are not readily available for review, nor is progress toward the goals automatically tracked. As of late 2000, USDA had not compiled the state goals and objectives. Nor did it have the capability to do so easily. The ability to automatically track outcomes appears to be limited, in part, by data collection at the state-level agencies. For example, according to USDA officials, fewer than half of the state-level agencies were able to provide sufficient data on the duration of breastfeeding because the automated information systems did not contain complete data on each participant. Few research studies exist on the effects of specific nutrition services. In a prior report, we identified seven such studies published between 1995 and 2000. Four of the studies examined the impact of breastfeeding promotion and support, two focused on health care referrals, and one examined both nutrition education and breastfeeding promotion and support. However, the results of these studies provide few, if any, insights into the effects of specific WIC nutrition services. One reason so few successful impact studies exist is the difficulty many researchers face in conducting them. Researchers encounter difficulties because of the following: Data constraints. We found that the nature of available data severely limited the usefulness of several of the impact studies of WIC nutritional services. The three major sources of WIC data are USDA’s WIC Participant and Program Characteristics (PC) data, and CDC’s Pediatric Nutrition Surveillance System (PedNSS) and CDC’s Pregnancy Nutrition Surveillance System (PNSS). The PC data, which has been collected every 2 years since 1988, provides a snapshot of the characteristics of WIC enrollees at the time data are collected. The PedNSS and PNSS annually track the health status of children and the risk factors of mothers who participate in selected federal programs, including WIC. Since none of these data sources currently track the same individuals over time or collect information on the types of services that individual participants receive, researchers cannot use the data to associate WIC services with changes in participant characteristics. In addition, the available data from other national surveys may be too old to reflect current demographics or services. Research design. Research design can be problematic. To determine the effect of services, research must assess the extent to which program interventions impact its participants. To do this, other possible influences must be excluded, a task that is best accomplished through the use of random assignment whereby individuals are randomly placed in either a group receiving program services or a group denied program services.Research studies that employ random assignment can be problematic because some children will be denied program services. This is especially challenging for a program like WIC that has enough funds to serve all qualified applicants. Program variation. WIC agencies can provide their services differently, a fact that complicates drawing broad conclusions about services’ effects. Because WIC is a grant program, state agencies are given the discretion to implement key program elements, such as the content of nutrition education, in a way that suits local needs. This discretion can lead to substantial variation in the services that WIC participants receive. Lack of funding. The lack of sufficient funding, according to USDA and CDC officials, is another factor that makes it difficult to conduct WIC- related research. Before 1998, USDA spent about $3.5 million annually on WIC-related research—an amount that was insufficient to collect the primary data and conduct the complex research necessary to assess the effect of WIC services, according to USDA and CDC officials. This problem is not unique to USDA. In 1996, we surveyed 13 federal departments and 10 independent federal agencies and found that relatively small amounts of resources were allocated for conducting program evaluations in fiscal year 1995 and these resources were unevenly distributed across the agencies. WIC has been faced with the challenge of meeting additional program requirements with available resources. Since the late 1980s, a number of requirements have been placed on the program aimed at, among other things, containing the cost of food benefits, promoting breastfeeding, encouraging immunizations, and controlling program abuse. While these requirements have placed additional service delivery and administrative demands on WIC staff, they have not been accompanied by more funding per participant; the NSA grant per participant was established in 1989 and since then has only been adjusted for inflation. There is also evidence that nonfederal support for NSA may have decreased since fiscal year 1992. Nor have the additional demands been offset by reductions in other responsibilities. As a result, WIC agencies have had to cut costs and make changes in service delivery that potentially will have a negative impact on the quality of WIC services. Since the late 1980s, new requirements placed on the WIC program have directly affected service delivery and program administration. Table 1 shows some of the major federal requirements added since 1988 and the associated service and administrative responsibilities. Little is known about how much meeting these additional requirements will cost the program. Costs have been estimated for only two of these requirements. USDA estimated that strengthening vendor monitoring would cost states and local agencies about $7 million annually. The National Association of WIC Directors estimated that increasing the emphasis on immunization education, documentation, and referrals could cost as much as about $37 million annually. Officials from the CDC agreed with NAWD’s cost estimate. In recognition of the increased demands that have been placed on the program, the Congress in recent years has reduced some requirements. However, according to USDA officials, these reductions do not offset the additional requirements. The reductions have generally been administrative in nature and have had little or no impact on the services provided directly to WIC participants. For example, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104- 193) reduced some of the burden associated with the submission of annual program plans. States are no longer required to submit a full program plan each year; rather, after a submitted plan is approved, a state submits only substantive changes in subsequent years. Federal mandates are not the only source of increased demands placed on the program. State WIC agency officials have considerable flexibility to impose additional program requirements in their states. To contain the cost of food, state officials have imposed a variety of limitations on the food WIC participants in their states can select. For example, some states require participants to purchase the lowest cost brand of an approved food item. Such requirements place administrative demands on NSA resources because local agency officials must monitor retailer and participant compliance with selection limitations. In addition, such requirements can increase the amount of time needed to explain food selection limitations to participants, reducing the time spent on needed nutrition education or counseling. Each year, USDA must use a national per participant NSA grant amount, set by law, to determine the funding to be used for food and NSA grants.This per participant grant amount is based on the national average of NSA grant expenditures that was made per participant per month in 1987, only adjusted for inflation. In fiscal year 2001, grant levels were based on a national average of $12.27 per participant per month. Before the average NSA grant per participant was used, funding for NSA was set at 20 percent of the total WIC appropriation. Since then, the percentage of federal WIC funds dedicated to NSA has increased to about 27 percent—perhaps giving the impression that, with such a substantial portion of program funds, NSA funds are sufficient to cover the costs of additional responsibilities. However, this increase is not the result of more funds per participant being dedicated to NSA; rather, it is the result of a decrease in the amount of federal funds needed to cover the food purchasing portion of the program. Food costs have been dramatically reduced by the infant formula rebates, in which companies reimburse the WIC program a percentage of the cost of every can of formula purchased by program participants. UDSA projects that in fiscal year 2001, savings from infant formula rebates will total about $1.5 billion. This amount covers the cost of about 28 percent of food benefits provided to participants. If rebate savings are considered, NSA has remained roughly 20 percent of total program costs from 1988 through 1999. Figure 2 shows the percentage of program funds spent on NSA, including and excluding rebate savings. State and local WIC agencies appear to be relying more heavily than they did in the past on federal grant funds to cover the costs for NSA. Based on our survey of state and local WIC agencies in fiscal year 1998, about $57 million for NSA was received from sources other than the federal government. Most of these additional funds, $38 million, were given to 11 state WIC agencies by their state governments. Local governments provided most of the remaining funds to local WIC agencies. While no good historical data exist on the level of funding state and local governments have provided specifically for NSA, USDA officials have found that the number of states providing funds to the WIC program for nutrition services has declined. In addition, those states that do provide funds have reduced the amount they contribute. For example, in fiscal year 1992, 18 states made about $91 million in appropriated funds available for WIC, while in 2001, 13 states made about $45 million available. Some state and local agencies have sought additional funding for nutrition services by accessing other sources of funding. California WIC, for instance, has initiated the “WIC Plus” program to assist local agencies interested in obtaining additional funding from other sources, such as reimbursements for nutrition services provided for WIC participants enrolled in Medicaid. The New York WIC program is currently formalizing an agreement with the state’s TANF program to obtain funding for providing additional nutrition services for WIC participants enrolled in TANF. However, the extent to which WIC agencies rely on other types of contributions has diminished. Historically, WIC agencies have made use of a variety of nonprogram resources, typically in-kind contributions such as donated space, to cover some of the costs of WIC’s nutrition services and program administration. But, according to the California WIC director, the time and resources needed to apply for and administer additional funding, such as foundation grants, can prevent WIC agencies from seeking additional funding. A 1988 USDA study found that at 16 local agencies, the share of costs covered by such nonprogram resources was substantial—54 cents for every program dollar. However, our recent work at six agencies found the share of costs covered by such resources to be much lower, ranging from 2 cents to 20 cents for every program dollar. According to state and local WIC officials, responding to the increased demands placed on the program using existing resources has required actions, such as changes in service delivery and cost cutting, that may lower the quality of WIC services. Almost 40 percent of the local agencies responding to our survey reported that additional federal requirements have resulted in a decrease in the average amount of time spent providing nutrition services. State and local officials repeatedly raised the concern that the additional demands cut into the limited time available to provide nutrition education and counseling. According to one program expert, even the infant formula rebate requirement can cut into nutrition education because staff must take time to explain how the rebate works and what products are eligible. According to the executive director of the National Association of WIC Directors, balancing increased program demands and available resources has forced some WIC agencies to cut costs by not increasing office space, personnel, and information technology in response to increasing needs. The 1998 USDA survey suggests that the negative consequences of such cost cutting may be extensive. According to that study, 22 percent of local agencies, serving almost 25 percent of all WIC participants, reported having inadequate office space. Additionally, 30 percent of local agencies serving about 41 percent of all WIC participants reported having insufficient numbers of professional staff. Finally, as reported earlier, 56 percent of state WIC agency automated management information systems were not capable of performing, or efficiently performing, 1 or more of 19 essential program tasks. We identified 16 approaches that could be considered to address 1 or more of the 6 major challenges facing the program. The approaches were identified based on the following assumptions: (1) WIC will continue to be administered by USDA, (2) income eligibility requirements will remain relatively unchanged, and (3) the program will continue to operate as a discretionary grant program. Each addresses a specific aspect of one or more of the six major challenges facing the program. For example, four of the approaches focus on funding; four relate to performance or impact measurement; three address staffing issues; three relate to information technology; and two relate to the provision of nutrition services. Most of the approaches also address other problems, even if tangentially. Table 2 shows the challenges we think each approach can help address. While each of the approaches offer certain advantages, they also have potential negative consequences that policymakers should consider. During our work, we encountered other potential approaches in addition to the 16 we selected; however, we focused on those that most directly addressed the major challenges we identified. Our assumptions precluded some approaches, such as moving the administration of WIC from USDA to HHS, changing the program’s income eligibility requirements to target lower income individuals, and making WIC an entitlement program. Such approaches may warrant further study. A more detailed description of the approaches—including potential implementation strategies, a description of the rationale for considering each approach, and possible advantages and disadvantages—is provided in appendix III. The WIC program is facing serious challenges in its efforts to deliver high- quality nutrition services. Changes in WIC’s service environment and additional requirements are causing the program to strain to provide effective nutrition services. Program stress will likely increase in the future because the program is considered a major point of access to health services for low-income infants and preschool children, creating the expectation that the program can do even more to help address emerging health issues in this population. In 2002, the Congress, through the reauthorization process, will begin to make decisions that could fundamentally affect the program’s ability to meet the challenges it faces in the delivery of nutrition services. In essence, the Congress will be reexamining its expectations for the program and the resources needed to meet those expectations. In describing the major challenges facing the program and approaches that could help to address the challenges, this report provides a structure for carrying out that reexamination. Most of the approaches could involve basic changes in program structure or the way nutrition services are funded. Decisions to adopt such approaches–whether in part or in whole– ultimately rest with the Congress. However, in regard to two of the approaches–recruiting and keeping a skilled staff and assessing the effects of nutrition services – the Congress lacks some information that would benefit decisionmaking. In order to help the Congress and USDA identify strategies to address the program’s challenges in recruiting and retaining a skilled staff and assessing the effects of nutrition services, we recommend that the Secretary of Agriculture direct the Administrator of the Food and Nutrition Service to take the following actions: Work with Economic Research Service and the National Association of WIC Directors to conduct an assessment of the staffing needs of state and local WIC agencies. This assessment should examine factors such as staffing patterns, vacancies, salaries, benefits, duties, turnover, and retention. Work with the Economic Research Service, the National Association of WIC Directors, and other stakeholders, including the CDC, to develop a strategic plan to evaluate the impacts of specific WIC nutrition services. This plan should include information on the types of research that could be done to evaluate the impacts of specific nutrition services as well as the data and the financial resources that would be needed to conduct such research. We provided a draft of this report to USDA’s Food and Nutrition Service for review and comment. We met with Food and Nutrition Service officials, including the Acting Administrator. The agency officials generally agreed with the report’s findings and recommendations. The officials also provided some technical changes and clarifications to the report, which we incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees; interested Members of the Congress; the Secretary of Agriculture; the Director, Office of Management and Budget; and other interested parties. We will also make copies available to others upon request. If you or your staff have any questions about this report, please contact me or Thomas E. Slomba at (202) 512-7215. Key contributors to this report are listed in appendix IV. American Dietetic Association c/o Arizona Department of Health Services Phoenix, AZ American Enterprise Institute Washington, D.C. WIC/Supplemental Nutrition Branch California Department of Health Services Sacramento, CA Center on Budget and Policy Priorities Washington, D.C. Department of Health and Human Services City of Long Beach Long Beach, CA Food Research and Action Committee Washington, D.C. Food Marketing Institute Washington, D.C. Gallatin City-County Health Department Bozeman, MT National Advisory Council on Maternal, Infant & Fetal Health c/o United Health Centers of San Joaquin Valley, Inc. Parlier, CA National Association of WIC Directors Washington, D.C. Maternal Child Health Grady Health System Atlanta, GA Minnesota Department of Health St. Paul, MN Montana Department of Public Health and Human Services Helena, MT Pennsylvania Department of Health Harrisburg, PA Zuni WIC Program Pueblo of Zuni, N.M. Economic Research Service U.S. Department of Agriculture Alexandria, VA Food and Nutrition Service U.S. Department of Agriculture Alexandria, VA Office of Budget and Policy Analysis U.S. Department of Agriculture Washington, D.C. Administration for Children and Families U.S. Department of Health and Human Services Washington, D.C. This appendix describes the 19 essential program tasks, identified by USDA, that a WIC automated management information system should be able to perform in order for program operations to be efficient. 1. Make WIC services more accessible to applicants and participants by increasing the variety of service providers. This could be accomplished by the following: Change legislation to allow the states to use demonstration projects to test and evaluate the use of for-profit entities, such as health maintenance organizations, as local WIC agencies. Encourage or require state agencies to give a greater preference (consideration) to local agency applicants that provide a greater proportion of services (1) during evening or weekend hours, (2) at more convenient locations, and (3) in the native language of applicants or participants. Rationale. WIC was designed to serve poor and low-income women and children as an adjunct to good health care; therefore, it should be highly accessible to this population. Service delivery by WIC agencies has become more difficult due to changing health and social services delivery systems and changing characteristics of the population served by the WIC program. By having greater variety of providers and service locations, applicants or participants may have greater access to WIC services. Potential advantages of this approach include the following: Participation among working families and students may increase. At-risk individuals who do not have access to traditional clinics may be reached. Partnerships with other community organizations may be formed, reducing the funding required to support multiple locations. Additional providers may create a more competitive market for WIC services, improving customer service. The local WIC program may receive added exposure in the community, improving its ability to attract potential participants. Potential disadvantages of this approach include the following: Authorized grocery store vendors that are allowed to provide space could compromise the independence of the state and local agencies in their vendor management roles and create the appearance of a conflict of interest. The integration of WIC with health services may be more difficult if WIC is operated at alternative locations, such as grocery stores. Inconsistent and inaccurate information may be provided at alternative locations, resulting in a lack of program continuity and standardization. Staff members who are bilingual or willing to work evening and weekend hours or in low-income neighborhoods due to safety concerns are difficult to find. Few new agencies are applying to be WIC providers. WIC applicants, participants, staff and others may get confused about service delivery if multiple WIC providers exist without defined service boundaries. 2. Improve WIC’s ability to respond to emerging health issues, such as obesity and diabetes, and to participants’ nutritional needs by expanding the range and scope of nutrition education. This could be accomplished by the following: Expand nutrition education and breastfeeding promotion curricula to include such topics as the benefits of physical activity and influence of media advertising on the food preferences of parents and children. Place greater emphasis during educational sessions on participants’ eating, feeding, and shopping practices or behaviors. Increase the use of multiple strategies when counseling participants. Provide more age-appropriate nutrition education to preschool-age WIC participants. Rationale. Over the past decade, the incidence of obesity and diabetes among adults and children has reached epidemic proportions, especially among lower income individuals. The nutrition education and breastfeeding promotion sessions provide an opportunity for WIC staff to help participants prevent these diseases. However, we observed that the quality of the nutrition education to WIC participants varied significantly. Experts indicate that nutrition counseling that addresses eating behaviors and/or that uses variety of teaching strategies can be more effective in preventing obesity and other nutrition-related illnesses. Potential advantages of this approach include the following: Disease prevention may be less costly than treatment. Increased participant interest in nutrition classes may result in increased knowledge and application to daily life, leading to better health. Training professional staff to provide information on emerging health issues may improve image of WIC staff. Impressionable preschool children may be taught positive messages that can shape lifelong nutrition and health choices and help them influence parents and caregivers. Job satisfaction for registered dietitians, able to utilize more advanced skills, may improve. Potential disadvantages of this approach include the following: Suggested strategies may require longer WIC appointments and participants may be too tired, busy, or stressed to take advantage of the education. Too little research exists to determine most effective strategies. Staff members lack expertise and training on various topics outside of basic nutrition. Better nutrition education and breastfeeding promotion will require additional staffing and resources at the local agency level. Parents may be inconvenienced by making pre-school children available for education because, with more parents working, children are infrequently at WIC sites. 3. Assess the staffing needs of the state and local WIC agencies and develop strategies to address any shortcomings. This could be accomplished by the following: Conduct a national study to examine staff distribution, duties, recruitment, retention, and job satisfaction. USDA working with its partners—such as state WIC agencies, HHS, and NAWD—to develop and implement agreed upon strategies. Rationale. Relatively little national data are available on the size and composition of WIC staff. However, indications from USDA surveys suggest that local WIC agencies are having difficulty recruiting and retaining professional staff. Because of the lack of national data, little is known about the exact nature of the staffing problems. Potential advantages of this approach include the following: The opportunity may be created to define completely what tasks WIC should be undertaking at the various staffing levels, the level of effort needed, and the appropriate distribution of duties among various types of staff. Information may provide an objective basis for funding requests. The image associated with working for the WIC program among nutrition professionals may be improved, along with staff retention. The quality of nutrition services may be improved. Potential disadvantages of this approach include the following: National data may not take into account the variations in state and local agency regulations or local job markets and may be difficult to interpret for local agencies. Limiting the study to current staffing and duties, without first defining the tasks that WIC must complete to achieve the results the program is intended to achieve, would not be as valuable to improving services. Additional resources are needed to assess and address staffing needs. Some factors affecting staffing are independent of USDA. 4. Establish more stringent professional staffing requirements for local WIC agencies. This could be accomplished by the following: Develop an ideal “staffing plan” based on the number of participants per agency. Such a plan would identify the types of duties performed by professional, paraprofessional and support staff to make the most effective and efficient use of available resources. Establish standards for staff-to-participant ratios, including the number of dietitians, nutritionists, or lactation specialists an agency should employ, or have access to, based on its number of participants. Rationale. No requirement exists that local WIC agencies employ a dietitian, nutritionist, or lactation specialist or that their staff members have access to the services of these professionals. We observed that the availability of nutrition professionals who had sufficient time to provide individual counseling varied from agency to agency, resulting in a range of the quality of services provided. Without staffing requirements to ensure a minimum level of access to professional nutrition services, local agencies may not be able to provide adequate services, especially to high-risk participants. Potential advantages of this approach include the following: Proper staffing may increase participant satisfaction. Quality of services may be improved. Job satisfaction may be increased by clearly describing responsibilities for various staff members. The program may be better able to respond to emerging health issues. Funds needed to provide high-quality services may be more easily estimated. Potential disadvantages of this approach include the following: NSA funding may need to be increased. Research is needed to determine what constitutes an “ideal staffing plan” and the tasks required by each occupation. The availability of professional staff may be limited in some areas. Staffing ratio needs to be based on the nutritional status of participants, rather than the number of participants. Legislative changes to the program may be needed. If standards focus on professionals, the role of paraprofessionals may be diminished. 5. Establish minimum continuing education requirements for WIC staff in the areas of nutrition, breastfeeding promotion, and counseling. This could be accomplished by the following: Develop national training requirements for WIC service providers, both professional and support staff, with input from WIC-related professional associations and appropriate federal agencies, such as CDC. Require states to establish continuing education requirements for their WIC agencies. Rationale. Currently, WIC staff are not required to continue their education, despite the fact that knowledge in the health and nutrition fields has evolved. Recent nutrition research has provided new information on diets to prevent illness, on innovations in nutrition counseling, and on new nutrition-related health concerns, such as the epidemic rise in obesity. Requiring all WIC staff to receive continuing education, even those not required to meet professional certification and licensing requirements, could improve the quality of WIC services and enhance the professionalism of WIC staff. Potential advantages of this approach include the following: The qualifications of WIC staff may improve. Staff retention and job satisfaction may be increased. The quality of nutrition services may be improved and the amount of misinformation provided to WIC participants may be decreased. Training could be more focused on program needs, not just on Potential disadvantages of this approach include the following: Additional NSA resources are needed to implement training and continuing education requirements. It is unlikely that a universal plan could be devised to fit the wide range of availability of staff, costs and client needs at the local agencies. Training requirements may discourage employment in WIC if time and expense is to be assumed by employees. Reporting requirements may be increased at the state and local agencies to ensure compliance. 6. Expedite the implementation components of WIC’s 5-Year Technology Plan related to the development of a model management information system and the facilitation of multistate acquisitions of management information systems. This could be accomplished by the following: USDA could prepare a report for the Congress in the next 2 years that outlines the features of a model system, the legislative and regulatory changes required to facilitate multistate acquisitions, and the associated funding needs. Rationale. USDA has identified 19 essential program tasks that WIC management information systems should be able to perform, such as participant certification, benefit delivery, vendor management, and funds management. Some of these tasks are currently beyond the capability of over half of the state agencies. USDA has also noted that about 60 percent of state systems have exceeded or will exceed their life cycles within 3 years. A model management information system and the facilitation, through state partnerships, of the acquisition of management information systems have the potential to accelerate the upgrade of state systems and promote greater standardization of needed program data. Potential advantages of this approach include the following: The multistate purchase of equipment and services for new systems and/or upgrades may reduce administrative burdens for individual states, lower costs and save time, and accelerate the acquisition of system enhancements for some states. Greater consistency and standardization may occur in WIC assessments and service delivery. Program participation in CDC’s pediatric and pregnancy nutrition surveillance systems may be improved. Program fraud may be decreased nationwide. Collaborative, nationwide technical standards may be created that could facilitate program communications, including the transfer and sharing of data. Potential disadvantages of this approach include the following: State legislative and regulatory barriers may discourage multistate purchases of equipment and services. Sources of additional funds needed for development of standards and for implementation of the systems are uncertain. A system that has the flexibility to accommodate a wide range of state- specific requirements and applications will be difficult and expensive to create. USDA may not have the technical expertise necessary to develop a model management information system. Very often when model systems are developed, by the time they are completed, technology and program requirements have evolved sufficiently to render the model less useful than anticipated. 7. Ensure that all local WIC agencies have direct Internet access. This could be accomplished by the following: Set a target date for state WIC agencies to ensure that all local agencies have direct access to the Internet. Rationale. The Internet can be used by federal, state, and local agencies for a variety of purposes related to the WIC program. USDA uses the Internet to provide state and local WIC agencies with program information, such as eligibility guidelines, application instructions, program funding, participation rates, and current law and regulations. Yet, available information indicates that hundreds of local agencies lack direct Internet access. The lack of Internet access may be due to several factors, such as the availability of telephone lines and local Internet providers. The quality of WIC services could be improved by enabling all local WIC professionals to efficiently communicate directly with USDA, other WIC agencies, and nutrition or health experts via the Internet. Potential advantages of this approach include the following: Local agency websites for communicating program access information may increase WIC participation. Nutrition education materials may be made more accessible. WIC staff may be given the option of distance learning and self-paced training opportunities. Nutrition, health, professional, and other information may be made more accessible, especially to remote locations. Staff effectiveness may greatly improve. Communication and reporting between federal, state, and local agencies may be facilitated. The Internet may help WIC staff to locate potential sources of financial support. Potential disadvantages of this approach include the following: Added expense of hardware/software and Internet service may not be covered by state funding requiring the use of limited nutrition services and administrative funds. Internet expense may not be justified by its impact on program operations. Potential exists for abuse by WIC staff. Computer systems and participant records may be vulnerable to viruses or hackers. 8. Implement nationwide electronic benefit transfers for WIC food benefits. This could be accomplished by the following: Set a target date for implementation of EBT systems. Test and evaluate a variety of EBT systems—such as smart card, magnetic strip, and Web-based technologies. Develop key infrastructure elements, such as a database of WIC- specific universal product codes, to support the implementation of EBT systems. Rationale. WIC participants typically receive paper vouchers or checks to purchase specific foods prescribed by WIC staff. The grocery industry reports that transactions involving these vouchers or checks incur comparatively high costs. USDA and the WIC retail community have established goals to reduce the transaction costs for grocers and improve the buying experience for WIC participants. An EBT system has the potential to help WIC meet these goals, but the infrastructure is not yet in place to support these systems. Potential advantages of this approach include the following: The timeliness and accuracy of financial transactions may be increased. Program fraud and abuse may be minimized. Paper use associated with voucher printing, storage, collection, and destruction may be reduced. Stigma associated with the paper transaction process may be diminished. Interstate transfer of participant certification may be facilitated. Opportunities to integrate the delivery of WIC and other services may be expanded. Lost or stolen EBT cards are more easily replaced. Food items may be more easily purchased as needed. Ability to monitor and collect information on products purchased may be increased. Potential disadvantages of this approach include the following: Development and operational costs of EBT, particularly for small food retailers, could present a financial hardship that may decrease the number of stores that wish to participate in WIC. Mandating an implementation date for EBT does not suddenly imbue WIC clinics and state agencies with the interest and the technical understanding necessary to implement EBT. EBT infrastructure at the retail level, especially in rural areas, is not available to meet program needs. No commercial model of EBT exists. Development and timely updating of a national system of specific WIC- approved food product codes necessary for the operation of an EBT system could be difficult, especially for states that use a ‘lowest price’ policy where products allowed by WIC can change from store to store or from day to day. 9. Develop and track national outcome measures for nutrition services and program coordination and integration. This could be accomplished by the following: USDA working with its partners—such as state WIC agencies, HHS, and NAWD—to develop outcome measures. Draw outcome measures from CDC’s pediatric and pregnancy surveillance systems (see approach #11). Drawing outcome measures from HHS’ Healthy People 2010 objectives. Track the measures at the state and national levels. Report annual progress of achieving goals in a manner similar to that in the Web-based Maternal and Child Health Program information system. Rationale. In response to the Government Performance and Results Act of 1993, USDA has attempted to develop national outcome measures for some of WIC’s nutrition services. However, it has had very limited success establishing these measures because of resource constraints and difficulty identifying data. Moreover, USDA relies on the state and local agencies, as grant and subgrant recipients, to provide the services to help accomplish the program’s goals and objectives. USDA currently requires state agencies to annually describe their goals and objectives for improving program operations, but it does not require that the state goals be consistent with any of the national goals or objectives. Developing some outcome measures that assess the coordination and integration of WIC services with other health or social service providers would highlight the federal- level objective to provide more consistent care to participants and reduce duplicative activities. Potential advantages of this approach include the following: Data and information would be more available for future studies. Using the HHS Healthy People 2010 objectives is an excellent way to achieve consistency with coordinating agencies and programs. If WIC caseworkers focused on key objectives, clearer progress could be made, which would help the program justify funding from the Congress and state legislatures. Successful outcomes may lead to the identification and implementation of best practices. Accountability of state and local agencies may be increased, reducing the need for state and local site visits and monitoring. Potential disadvantages of this approach include the following: The CDC’s surveillance systems have significant limitations, including voluntary participation. Some jurisdictions might feel pressured to drop local priorities for national ones if outcome measures were defined the same for all jurisdictions. Different states, regions, and counties use different computer systems and coding schemes to record WIC data, making it difficult to compile data nationally or even statewide. Outcomes measured may be partially attributable to other programs or services, not just to WIC services. Focus on a limited set of outcomes may prompt programs to address outcomes that are easily measurable to the exclusion of others. 10. Require each state WIC agency to develop measurable goals that address state-specific issues and track progress toward meeting these goals. This could be accomplished by the following: USDA and state agencies work as partners to develop state level measurable goals. Goals should be based on state health issues identified with CDC’s pregnancy and pediatric surveillance systems and other systems. Goals should relate to quality of services—such as participant retention (particularly for children) and referral outcomes—in a way that can be quantified. Provide training or technical assistance to state agency staff in developing goals and objectives under the Government Performance and Results Act. Enhance state and local management information systems to support tracking goals (see approach #6). Rationale. While USDA currently requires state agencies to describe their goals for improving program operations on an annual basis, the agency does not require that the goals be measurable. As previously described, about half of the state goals and objectives that we reviewed lacked key elements, such as baseline or target values, needed to measure progress. Using more measurable goals would enable WIC to demonstrate progress at the state level. Potential advantages of this approach include the following: A focus on these measurable goals and objectives would help clinic staff nationwide focus on the common purpose of WIC without requiring agencies to employ the same strategies. Measurable goals may lead to more focused, meaningful state WIC plans. State and local agencies may be encouraged to focus on outcome goals rather than caseload. The ability to demonstrate and measure program effectiveness may support funding requests. Potential disadvantages of this approach include the following: This approach does not take into account the differences in state operations and, more importantly, the differences in the type and degree of action required to improve program effectiveness for different states or regions. Data may not be available or reliable for identifying baselines or appropriate targets, or for monitoring progress. State agencies will require training to develop measurable goals. Attainment of some goals may also be dependent on other health programs. 11. Collect more data relating to WIC participants and program interventions by expanding the CDC pediatric and pregnancy nutrition surveillance systems. This could be accomplished by the following: USDA works with its partners—such as HHS, state WIC agencies, and NAWD—to find ways for WIC to obtain more information from the pediatric and pregnancy nutrition surveillance systems. Increase the number of states and federal programs participating in pediatric and pregnancy nutrition surveillance systems. Increase the number of variables collected by the pediatric and pregnancy nutrition surveillance systems, to include data such as type of WIC nutrition interventions received and household socioeconomic status. Rationale. CDC’s pediatric and pregnancy nutrition surveillance systems track the health status of children and the risk factors of mothers who participate in selected federal programs. While data for WIC participants represent a substantial portion of the sample, not every state WIC agency participates. Moreover, the systems do not track individuals over time or collect information on the types of services that individual participants receive. Expanding the data collection associated with these systems would enable WIC to better track program performance and provide critical data needed to evaluate the effectiveness of WIC services. Potential advantages of this approach include the following: Data collection systems, such as CDC’s pediatric and pregnancy nutrition surveillance systems, may be an effective approach to improving the amount, national representation, and usefulness of data collected. Improved data may help justify funding and help ensure that it is targeted to treatments most likely to yield successes. Enhanced data systems may provide more relevant data for program planning, monitoring, and evaluation. With all states participating, the usefulness of the data collected is increased. Expansion and enhancement of an existing system may be less costly than creating a new system. Potential disadvantages of this approach include the following: Additional resources may be needed for automated systems and staff training to enable some states to participate in CDC’s pediatric and pregnancy nutrition surveillance systems. Much of the information in these systems is incomplete and contains many errors, which raises concerns about accuracy. Significant costs are associated with expanding participation in the surveillance systems, as well as increasing the number of variables in the questionnaires. The variety of counseling topics, the sensitivity of health related advice, and privacy concerns make nationwide data collection difficult. 12. Develop a strategic plan to evaluate the impact of WIC’s nutrition services. This could be accomplished by the following: Identify the research needed to determine the effects of WIC’s nutrition service interventions on its participants. Identify necessary data and appropriate research methodologies. Identify resources required to conduct impact research. Rationale. USDA currently spends about $ 1.1 billion annually for NSA. In recent years, USDA has spent about $2 million to $3 million annually on WIC-related research. Yet, few research findings exist on the effectiveness of specific nutrition services. According to USDA officials, the money dedicated to research is insufficient to assess the effect of WIC services on participants, in part because of the need for primary data and the complex nature of the required methodologies. Potential advantages of this approach include the following: Well-designed evaluation/research would make it possible to assess program impact and determine appropriate changes. Studying the effects of different nutrition promotion treatments is essential to helping WIC direct its nutrition promotion efforts to the activities and approaches most likely to yield the best results. The identification of the type of research and the resources needed would help to justify funding support required. Potential disadvantages of this approach include the following: Assessing the effect of specific nutrition education interventions may be difficult. Several obstacles exist to evaluating the impact of WIC’s nutrition services. These include: participants not being required to attend nutrition education, not having clear and well-defined outcomes, and adequate assessment tools not being available for measuring dietary intake and changes in dietary behavior. Research is difficult, time-consuming, and costly to conduct. Representative samples are difficult to gather from the different types of WIC agencies throughout the United States. Implementing a strategic plan to evaluate the impact of WIC’s nutrition services would require a reliable, significant ongoing commitment of funding and staff resources. 13. Provide states with greater flexibility to convert food funds into NSA funding. This could be accomplished by the following: Change legislation to permit states to (1) carry converted funds forward into subsequent years, (2) continually convert food funds resulting from program savings into NSA funding for the purposes of serving more participants, and/or (3) target some food funds to support high-cost nutrition service activities, such as home or hospital breastfeeding support. Rationale. Current program regulations allow states to convert food funds to NSA funds to cover only current year expenditures that exceed their NSA grants under two conditions: (1) A state has an approved plan for food cost containment and for increases in participation levels above the USDA-projected level and (2) a state’s participation actually increases above the level projected by USDA. However, the increased participation supported by the converted funds is not considered in the allocation for the next year. Officials from several state WIC programs and NAWD have indicated that the current conversion policies do not provide any incentives for states to aggressively pursue food cost containment strategies for the purposes of increasing participation. In recognition of the high costs associated with delivering nutrition services to some participants, recent legislation, P.L. 106-224, permits a state-level agency serving remote Indian or Native American villages to convert food funds to NSA funds to cover allowable costs, without having an increase in participation. Potential advantages of this approach include the following: Flexibility may serve as an incentive or reward for containing food costs. For example, states may be more aggressive in using strategies to reduce food costs, including educating participants to be better shoppers, if they knew some of the money saved could be converted to NSA to improve nutrition services. States may have more control over their program budget. Barriers that states claim prevent them from using current conversion authority would be removed. Fund conversion for targeted purposes such as nutrition education, breastfeeding promotion, and or outreach may increase participation. Potential disadvantages of this approach include the following: Increased conversion could limit the number of participants served by the program during times of growing caseloads and limited food funds. The quality of food packages provided to participants may suffer, which may also reduce participation. The portion of federal funds spent on NSA, viewed by some as an “administrative expense,” may be decreased, misrepresenting the funding requirements of the program. Unless an evaluation requirement is created, the effects of providing increased conversion authority would be unknown. Carrying forward converted funds into subsequent years could result in a significant portion of funds remaining unused and rolled forward from year to year. 14. Increase the level of federal funding for WIC NSA. This could be accomplished by the following: Appropriate additional funds that increase the average grant per participant. Provide additional funds that target specific needs, such as the acquisition of management information systems. Rationale. The federal grant level for NSA is based on the national average of NSA grant expenditures that were made per participant per month in 1987, adjusted for inflation. In fiscal year 2001, grant levels were based on a national average of $12.27 per participant per month. Since the grant level was established, new demands have been placed on the program in part because of new program requirements, shifting demographics, emerging health needs, and changes in the health care and social service environment. In addition, our case studies suggest a decrease in the extent to which nonprogram resources, such as in-kind contributions, are covering nutrition service and administration costs. Potential advantages of this approach include the following: The program may be better able to meet its responsibility as an adjunct to other health care services, including immunizations. The program may be able to fully implement interventions that have been demonstrated to improve immunizations among children enrolled in WIC. The program may be able to implement approaches to address challenges it faces that have been identified above. The recruiting and retention of staff may be improved by offering higher salaries and better benefits. Additional funds targeted for management information systems may help to improve the efficiency of client services and program management. Additional funds targeted for EBT may improve program integrity and streamline financial transactions and reporting. The program may be better able to adjust to changes in the characteristics of the population it serves and the environment in which it operates. The program may be better able to carry out additional responsibilities placed on it since 1987. Potential disadvantages of this approach include the following: No guarantee exists that additional resources would improve outcomes. Additional funds for NSA would be perceived as reducing resources available to provide food benefits to potential participants. More federal funds could reduce the likelihood of state financial support of the program. Additional resources may be difficult to justify without specific information about how much it costs to provide essential services and/or the cost–effectiveness of nutrition services. 15. Increase overall state contributions to WIC NSA. This could be accomplished by the following: Change WIC funding guidelines to require or encourage a state match, either monetary or in-kind, of some portion of WIC NSA funds. Ask states to provide a match for special purpose grants, such as continuing education for WIC staff. Rationale. State agencies rely almost entirely on their federal grants to cover their WIC NSA costs. No state matching requirement exists for WIC—although some states volunteer support for WIC. In responding to our 1999 survey of state-level WIC agencies, 11 state-level agencies reported receiving state funds for WIC in fiscal year 1998. The state contributions ranged from less than 1 percent to just over 37 percent of their total NSA funds. Increasing the level of state contributions for WIC could help to enhance the quality of nutrition services. Potential advantages of this approach include the following: More resources may enhance WIC services; for example, more funding would enable hiring more staff so more time could be spent on nutrition education with participants. An increase in state funds may increase program flexibility. For example, federal restrictions may not apply. State support and commitment to the program may be demonstrated with an increase in state funds. States may have a greater incentive to be efficient. Additional funding sources would strengthen partnerships and program services. Potential disadvantages of this approach include the following: Federal funding may decline. States may divert funds from other public health programs. Some states may turn down federal funding, resulting in fewer resources available for WIC services. Some states, including those with a disproportionate portion of low- income population, may not be able to afford a match. Tension may be created between federal and state goals for the program. 16. Increase the level of WIC funding from other sources. This could be accomplished by the following: Help state and local agencies in the area of resource development. Provide incentives or funding to support state and local fundraising efforts. Generate program-related income, such as from fees for nutrition education or breastfeeding support to noneligible individuals or processing vendor applications. Rationale. State and local agencies use funding from other sources to enhance WIC services. California WIC has initiated a “WIC Plus” program to identify and obtain other sources of funds for the purpose of enhancing nutrition services. Also, the New York State WIC program is currently formalizing an agreement with the state’s TANF program; under this agreement, the TANF program would provide funds to WIC for additional nutrition services to TANF program participants who are also enrolled in WIC. However, based on our survey of local agencies, about 5 percent of the funds received in fiscal year 1998 came from other sources. Obtaining additional funding from other sources may help improve the quality of WIC services. Potential advantages of this approach include the following: Collaboration with other programs, such as TANF and Medicaid, may be increased if other programs paid WIC to provide services to their participants. Services may be enhanced and management information systems improved. Income from charging fees to non-WIC participants for some services may enhance the image of WIC and improve the quality of services offered. Potential disadvantages of this approach include the following: Not all WIC agencies are able or willing to pursue additional funding. Staff time and resources are needed to administer income-generating efforts. Income could vary from year to year resulting in the variation of program services. In addition to those named above, Peter M. Bramble, Jr.; Corinna A. Nicolaou; Lynn M. Musser; Carolyn M. Boyce; Judy K. Hoovler; Clifford J. Diehl; and Torey B. Silloway made key contributions to this report. | The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) serves almost half of all infants and about one-quarter of all children between one and four years of age in the United States. The WIC program faces the following challenges: (1) coordinating its nutrition services with health and welfare programs undergoing considerable change, (2) responding to health and demographic changes in the low-income population, (3) recruiting and keeping a skilled staff, (4) improving the use of information technology to enhance service delivery and program management, (5) assessing the effect of nutrition services, and (6) meeting increased program requirements without a corresponding increase in funding. This report identifies 16 approaches to address these challenges. Each of the approaches has advantages and disadvantages that policymakers should consider. |
High-performing organizations reinforce a focus on results through demonstrated top leadership commitment, through positive recognition to employees for their contributions to organizational goals, and by holding managers accountable for results while giving them the necessary decisionmaking authority to achieve them. Our survey data suggest that across the 28 agencies there are ample opportunities to better instill these key attributes of a performance-based culture. Successfully addressing the challenges that federal agencies face in becoming high-performing organizations requires agency leaders who are fully committed to achieving results. Top leadership’s commitment to achieving results is essential in driving continuous improvement to achieve excellence throughout an agency and inspiring employees to accomplish challenging goals. Without clear and demonstrated commitment of agency leadership—both political and career—organizational cultures will not be transformed, and new visions and ways of doing business will not take root. However, the responses of many managers in the 28 agencies did not indicate a strong perception that their agencies’ top leadership demonstrated a strong commitment to achieving results. Managers’ positive responses across the 28 individual agencies varied widely from a low at FAA (23 percent) to 3 times that percentage at NSF (69 percent), as shown in figure 1. Specifically, at only four agencies—NSF, the Social Security Administration (SSA), NASA, and NRC—did more that two-thirds of managers perceive such commitment to a great or very great extent. At 11 agencies, less than half of the managers perceived that there was such a degree of commitment. The clear and demonstrated top leadership commitment needed to sustain high levels of performance is not widely perceived among managers across the government overall and progress in fostering such leadership has remained stagnant. Governmentwide, our survey results show that in 2000, just over half of managers—53 percent—reported strong top leadership commitment, while 57 percent had this perception in 1997—not a statistically significant change. Incentives are important in steering an agency’s workforce to high levels of performance and they are critical to establishing a results-oriented management environment. A key element in agencies’ efforts to achieve results is their ability to motivate and reward their employees for supporting results through effective incentives, such as positive recognition. However, both our agency-specific and governmentwide survey results suggest that positive recognition has not been an extensively used technique for motivating employees. On an individual agency basis, there are no agencies that stand out as notable at the top of the range for providing positive recognition to employees for helping the agency accomplish its strategic goals. The percentage of managers responding to a great or very great extent at the 28 agencies ranged from 12 percent at FAA to 52 percent at GSA. Even at the top of the range, the percentage of managers who reported that employees received such positive recognition barely exceeded 50 percent at GSA and SBA. At 14 of the 28 agencies surveyed, less than one-third of managers perceived that employees in their agencies were receiving positive recognition to at least a great extent for contributing to the achievement of agency goals. (See fig. 2.) Governmentwide, few managers (31 percent) reported in 2000 that employees in their agencies received positive recognition to a great or very great extent for helping their agencies accomplish their strategic goals. This was not a statistically significant change from the 26 percent reporting this extent of positive recognition in 1997. Because effective incentive programs can help federal agencies maximize the results they achieve by both reinforcing personal accountability for high performance and motivating and rewarding employees, the results of our survey suggest that in most cases agencies are missing opportunities to positively affect program results through more widespread use of effective positive recognition techniques. Agencies need to create organizational cultures that involve employees and empower them to improve operational and program performance while ensuring accountability and fairness for those employees. Devolving decisionmaking authority to program managers in combination with holding them accountable for results is one of the most powerful incentives for encouraging results-based management. Additionally, providing managers with such authority gives those who know the most about an agency’s programs the power to make those programs work. The range of responses across individual agencies regarding managers being held accountable for the results of their programs to a great or very great extent ranged from a low of 40 percent at the Forest Service to 79 percent at HUD. At 22 of the 28 agencies included in our survey, more than 50 percent of managers reported such accountability, with 66 percent or more at 10 of these agencies reporting such accountability. (See fig. 3.) In comparison, for each of the individual agencies included in our survey, the percentage of managers who reported that they had, to a great or very great extent, the decisionmaking authority they needed to help their agencies accomplish their strategic goals ranged from 15 percent at IRS to 58 percent at OPM. At only one agency—OPM—was the percentage of managers reporting that they had the decisionmaking authority they needed above 50 percent. In fact, at 10 of the 28 agencies, only one-third or less of managers responded that they had such decisionmaking authority. (See fig. 4.) The differences reflected in managers’ responses to our questions on authority and accountability suggest that many agencies can better balance accountability for results with the authority needed to help achieve agency goals. For managers at 27 agencies, the percentage reporting that they were held accountable for results exceeded the percentage reporting that they had the authority they needed. At 16 of these 27 agencies, the percentage by which being held accountable exceeded having the authority needed was more than 20 percent. At only one agency—the Forest Service—were the percentages approximately equal. However, they were not very high, with the percentage of Forest Service managers responding positively at 41 percent for authority and at 40 percent for accountability. Governmentwide, the differences between the level of accountability and the level of authority managers perceived was great in both our 1997 and 2000 surveys. In 2000, 63 percent of federal managers overall reported that they were held accountable for program results but only 36 percent reported that they had the decisionmaking authority they needed to help their agencies accomplish their strategic goals. These percentages were not statistically significantly different than those from our 1997 survey, when 55 percent of managers reported such accountability for results while 31 percent reported such decisionmaking authority, We recently reported that several agencies have begun to use results- oriented performance agreements for their senior political and career executives to define accountability for specific goals, monitor progress during the year, and then contribute to performance evaluations. Although each agency developed and implemented agreements that reflected its specific organizational priorities, structure, and culture, we identified common emerging benefits from each agency’s use of performance agreements. For example, the Veterans Health Administration (VHA) decentralized its management structure from 4 regions to 22 Veterans Integrated Service Networks (VISN). VHA gave each VISN substantial operational autonomy and established performance goals in the agreements to hold network and medical center directors accountable for achieving performance improvements. Senior VHA officials we spoke to as part of that review credit the use of performance agreements to improvements in key organizational goals. A fundamental element in an organization’s efforts to manage for results is its ability to set meaningful goals for performance and to measure performance against those goals. High-performing, results-oriented organizations establish a set of measures to gauge progress over various dimensions of performance. As discussed in our January 2001 Performance and Accountability Series, a major challenge that agencies face in implementing GPRA is articulating and reinforcing a results orientation. Encouragingly, more managers overall reported having performance measures in 2000 than in 1997. Specifically, 84 percent of federal managers governmentwide said they had performance measures for the programs they were involved with, a statistically significant increase over the 76 percent of managers who responded that way in 1997. The degree to which managers reported having each of the five types of performance measures we asked about—outcome, output, customer service, quality, and efficiency—varied by agency. However, managers’ responses at most federal agencies showed that they still may have room for improvement in this regard. Output measures that tell how many things are produced or services provided are an essential management tool in managing programs for results, but they represent only one basic dimension in the measurement of program performance. Rather, it is outcome measures that demonstrate whether or not program goals are being achieved and gauge the ultimate success of government programs. Collectively, managers’ responses across the 28 agencies suggest a need for further emphasizing and developing both outcome and output measures to address the multidimensional aspects of performance. For outcome measures specifically, the percentage of managers responding that they had them to a great or very great extent ranged from 17 percent at HCFA to 63 percent at NASA and HUD. At only eight agencies did more than 50 percent of managers report having outcome measures. (See fig. 5.) In comparison, at 17 of the 28 agencies, 50 percent or more of managers reported that they had output measures to a great or very great extent. The percentage of managers responding that they had output measures to that extent ranged from 19 percent at HCFA to 75 percent at SBA and HUD, as shown in figure 6. Governmentwide, 50 percent of managers reported in 2000 that they had output measures to a great or very great extent for their programs, a statistically significant increase over the 38 percent reporting having these measures in 1997. In comparison, 44 percent of managers governmentwide reported in 2000 that they had outcome measures to a similar extent, significantly more than the 32 percent reporting in this way in 1997. Although more managers overall said they had output measures than outcome measures in 2000, at 7 of the 28 agencies—the Federal Emergency Management Agency, the Department of Health and Human Services, the Department of Energy (Energy), the U.S. Agency for International Development, NSF, NASA, and OPM—slightly more managers said they had outcome measures than output measures. Among GPRA’s stated purposes is the improvement of federal program effectiveness and public accountability by promoting a new focus on customer satisfaction. However, our survey results suggest that having the measures to determine whether or not agencies are satisfying their customers is still at an early stage in the federal government, and that, as such, there is ample room for improvement. Managers’ responses indicated that the presence of customer service measures for programs in the 28 individual agencies was low. For the 28 individual agencies, the percentage of managers responding to a great or very great extent ranged from 14 percent at NRC to a high of 54 percent at GSA and VA. At only four agencies—GSA, VA, OPM, and NASA—did even slightly over half of the managers report that they had customer service measures to such an extent. In 10 of the agencies, less than one-third of managers reported positively on having these measures. (See fig. 7.) Managers’ responses did not reflect any notable progress in further expanding the presence of customer service measures since our previous survey. Specifically, in 2000, 38 percent of managers reported having customer service measures for their programs to a great or very great extent compared with 32 percent reporting that way in 1997, not a statistically significant increase. In crafting GPRA, Congress expressed its interest in American taxpayers getting quality results from the programs they pay for as well as its concern about waste and inefficiency in federal programs. However, managers’ responses indicate that the extent to which agencies have developed measures of either quality or efficiency is not very high. In only three agencies—NASA, VA, and OPM—did more that 50 percent of managers report having quality measures to a great or very great extent. In 14 of the agencies, less than one-third of managers reported having quality measures to a comparable extent. For the 28 individual agencies, this response ranged from 14 percent at HCFA to 61 percent at NASA. (See fig. 8.) Similarly for efficiency measures, at only two agencies—GSA and Energy— did 50 percent or more of managers report having such measures to a great or very great extent. At almost half of the agencies, less than one-third of managers reported having them to this extent. For the 28 agencies included in our survey, this percentage ranged from 9 percent at HCFA to 56 percent at GSA, as shown in figure 9. Governmentwide, 39 percent of federal managers in 2000 reported having quality measures for their programs, not a statistically significant increase from the 31 percent in 1997. In 2000, 35 percent of managers cited that they had measures that gauged the efficiency of program operations, a significant increase from the 26 percent reporting such measures in 1997. The fundamental reason for collecting information on a program’s performance is to take action in managing the program on the basis of that information. For five of the management activities we asked about in 1997 and 2000—setting program priorities, allocating resources, adopting new program approaches or changing work processes, coordinating program efforts, and setting individual job expectations—the reported use to a great or very great extent decreased to a statistically significant extent in 2000. In setting program priorities, the information obtained from measuring a program’s performance provides a basis for deciding whether parts of the program or the entire program itself should be given a higher or lower priority. Across the 28 individual agencies, the percentage of managers reporting this use to a great or very great extent ranged from 26 percent at NSF to 64 percent at HUD. At only seven agencies—HUD, SSA, SBA, VA, GSA, OPM, and NASA—did more than 50 percent of managers respond positively regarding this use. (See fig. 10.) When we examined the responses of only those managers who answered on the extent scale, 56 percent of managers overall reported in 2000 that they used performance information when setting program priorities. Although this percentage decreased to a statistically significant extent from 66 percent in 1997, it was the activity for which the highest percentage of managers governmentwide reported this use to a great or very great extent in 2000. In addition, performance information allows program managers to compare their programs’ results with goals and thus determine where to target program resources to improve performance. When managers are forced to reduce their resources, the same analysis can help them target the reductions to minimize the impact on program results. Across the 28 individual agencies, the percentage of managers reporting that they used performance information to a great or very great extent when allocating resources ranged from 24 percent at NSF to 66 percent at OPM, with 50 percent or more of managers reporting such use at only 7 agencies—OPM, SBA, HUD, NASA, GSA, the Department of Treasury, and VA. (See fig. 11.) Governmentwide, 53 percent of those managers who expressed an opinion on the extent scale reported in 2000 that they used performance information to a great or very great extent when allocating resources, a statistically significant decrease from the 62 percent responding in this way in 1997. Third, by using performance information to assess the way a program is conducted, managers can consider alternative approaches and processes in areas where goals are not being met and enhance the use of program approaches and processes that are working well. Across the 28 individual agencies, the percentage of managers reporting such use to a great or very great extent ranged from 25 percent at the Forest Service to 64 percent at OPM. At only seven of the agencies—OPM, SBA, VA, GSA, NASA, HUD, and SSA—did 50 percent or more of managers report such use. (See fig. 12.) Governmentwide in 2000, 51 percent of those managers who expressed an opinion on the extent scale reported that they used performance information when adopting new program approaches or changing work processes, statistically significantly lower than the 66 percent in 1997. For these three key management activities—setting program priorities, allocating resources, and adopting new program approaches or changing work processes—the percentage of managers governmentwide that reported using performance information to a great or very great extent decreased significantly between 1997 and 2000. Moreover, for each of these activities, at only 7 of the 28 agencies did 50 percent or more of managers report such use. These data suggest that in the majority of agencies, the number of managers highly engaged in the application of one of the most fundamental and clear tenets of results-based management— using program performance information to make government programs work better—is in the minority. GPRA’s emphasis on results implies that federal programs contributing to the same or similar outcomes should be closely coordinated to ensure that goals are consistent and complementary and that program efforts are mutually reinforcing. For programs that are related, program managers can use performance information to lay the foundation for improved coordination. The survey data show that such use may not be widespread. At the 28 individual agencies, the percentage of managers reporting such use to a great or very great extent ranged from 17 percent at FAA to 57 percent at HUD. Moreover, one-third or less of managers at more than half of the agencies reported using performance information when coordinating program efforts. At only three agencies—HUD, VA, and GSA—was the percentage of managers reporting such use over 50 percent. (See fig. 13.) Overall, 43 percent of those managers who expressed an opinion on the extent scale reported in 2000 that they used performance information when coordinating program efforts with other internal or external organizations—14 percent less than the 57 percent reporting this use in 1997, a statistically significant change. In high-performing organizations, employees’ performance expectations are aligned with the competencies and performance levels needed to support the organizations’ missions, goals and objectives, and strategies. When federal managers use performance information to set individual job expectations, they both emphasize the role their individual employees should play in accomplishing program goals and reinforce the importance of employee responsibility for achieving results. However, the results of our survey suggest that many managers are not consistently using performance information in this important way. At the 28 individual agencies, the percentage of managers reporting the use of performance information to a great or very great extent when setting individual job expectations ranged from 16 percent at HCFA to 66 percent at SBA. As indicated by managers’ responses to our survey, less than half of managers in 21 of the 28 agencies are extensively engaged in taking this important step in reinforcing the relationship between employees’ efforts to implement their agencies’ programs and the results those programs realize. Only seven agencies—SBA, HUD, GSA, the Department of Commerce, VA, OPM, and NASA—had 50 percent or more of managers reporting such use. (See fig. 14.) When we examined the responses of only those managers who answered on the extent scale, 51 percent of managers overall reported in 2000 that they used performance information to a great or very great extent when setting individual job expectations, a statistically significant difference from the 61 percent responding in this way in 1997. The executive branch has taken steps to reinforce the connection between employee performance and agency goals. For example, OMB’s latest Circular No. A-11 guidance on preparing fiscal year 2002 annual performance plans states that those plans should set goals to cover human capital management in areas such as linking individual performance appraisals to program performance. Also, on October 13, 2000, OPM published final regulations, effective November 13, 2000, that change the way agencies are to evaluate the performance of members of the SES. Specifically, agencies are to place increased emphasis on appraising executive performance on results and using results as the basis for performance awards and other personnel decisions. For agencies to successfully become high-performing organizations, their leaders need to foster performance-based cultures, find ways to measure performance, and use performance information to make decisions. At a fundamental level, results from our 2000 federal managers survey indicate wide differences among individual agencies’ levels of success in demonstrating a results-based climate. However, transforming organizational cultures is an arduous and long-term task. In addition, managers’ responses suggest that while some agencies are clearly showing signs of becoming high-performing organizations, others are not. The survey results provide important information that agency leadership can use to help identify key opportunities to build higher-performing organizations across the federal government. We will continue to work with senior leadership in the individual agencies to identify actions that can be taken to address the issues raised by their managers’ survey responses. Congress has a vital role to play as well. As part of its confirmation, oversight, authorization, and appropriation responsibilities, Congress also has the opportunity to use the information from our 2000 managers survey, as well as information from agencies’ performance plans and reports and our January 2001 Performance and Accountability Series and High-Risk Series, to emphasize performance-based management and to underscore Congress’ commitment to addressing long-standing challenges. On April 9, 2001, we provided the Director, Office of Management and Budget, with a draft of this report for his review and comment. In his May 11, 2001 written response, included in appendix XXX, OMB’s Deputy Director acknowledged the importance of the report providing a basis for comparison to our 1997 survey results as well as allowing for individual analysis of 28 agencies. He said that the report’s findings appeared to be consistent with OMB’s views regarding the extent of agencies’ progress in implementing GPRA, stating that while all agencies are in full compliance with the requirements of the law, most are not yet at a stage where they are truly managing for results. In addition, he outlined the new administration’s planned initiatives to make the federal government more results-oriented, including strengthening the linkage between budget decisionmaking and program performance. As agreed with your office, unless you announce the contents of this report earlier, we plan no further distribution until 30 days after its issue date. At that time, we will send copies of the report to Senator Richard J. Durbin, Ranking Member, Subcommittee on Oversight of Government Management, Restructuring, and the District of Columbia, Senate Committee on Governmental Affairs; Senator Fred Thompson, Chairman, and Senator Joseph Lieberman, Ranking Member, Senate Committee on Governmental Affairs; and Representative Dan Burton, Chairman, and Representative Henry A. Waxman, Ranking Minority Member, House Committee on Government Reform. We will also send copies to the Honorable Mitchell E. Daniels, Jr., Director of the Office of Management and Budget, and the heads of the 28 agencies included in our survey. In addition, we will make copies available to others upon request. If you have any questions concerning this report, please contact J. Christopher Mihm or Joyce Corry on (202) 512-6806. Peter Del Toro and Thomas Beall were key contributors to this report. A questionnaire on performance and management issues was sent to a stratified random sample of 3,816 out of a population of about 93,000 full- time, mid- and upper-level civilian managers and supervisors working in the 24 executive branch agencies covered by the Chief Financial Officers Act of 1990 (CFO Act). These agencies represent about 97 percent of the executive branch full-time workforce, excluding the U.S. Postal Service. In reporting the questionnaire data, when we use the term “governmentwide” and the phrase “across the federal government,” we are referring to these 24 CFO Act executive branch agencies, and when we use the terms “federal managers” and “managers,” we are referring to both managers and supervisors. The sample was drawn from the March 1999 Office of Personnel Management’s Central Personnel Data File (CPDF)—the most recent version of the CPDF available when we began drawing our sample— using file designators indicating performance of managerial and supervisory functions. The questionnaire was designed to obtain the observations and perceptions of respondents on such results-oriented management topics as the presence, use, and usefulness of performance measures; hindrances to measuring and using performance information; agency climate; information technology; program evaluation; and various aspects of the Government Performance and Results Act of 1993 (GPRA). Most of the items on the questionnaire were closed-ended—that is, depending on the particular item, respondents could choose one of two or more response categories or rating the strength of their perception on a 5-point extent scale ranging from “to no extent” to “to a very great extent.” In most cases, respondents also had an option of choosing the response category “no basis to judge/not applicable.” About half of the items on the questionnaire were contained in a previous survey that was conducted between November 1996 and January 1997 as part of the work we did in response to a GPRA requirement that we report on implementation of the act. This previous survey, although done with a smaller sample size of 1,300 managers, covered the same agencies as the 2000 survey, which was sent out between January and August, 2000. Individuals who did not respond to the initial questionnaire were sent up to two follow-up questionnaires. In some cases, we contacted individuals by telephone and faxed the questionnaire to them to expedite completion of the survey. The current survey was designed to update and further elaborate on the results of the previous survey. Similar to the previous survey, the sample was stratified by whether the manager or supervisor was Senior Executive Service (SES) or non-SES. The management levels covered General Schedule (GS), General Management (GM), or equivalent schedules at levels comparable to GS/GM-13 through career SES or equivalent levels of executive service. Stratification was also done by the 24 CFO Act agencies, with an additional breakout of 4 selected agencies from their departments—Forest Service, Health Care Financing Administration, Federal Aviation Administration, and Internal Revenue Service. These four agencies were selected on the basis of our previous work identifying them as facing significant managerial challenges. The sample was also stratified to include special pay plans at some agencies to improve our coverage of managers and supervisors working at those agencies. For example, Senior Foreign Service executives from the State Department and the Agency for International Development were included in the sample. We included these special pay plan strata to ensure at least a 90-percent coverage of all managers and supervisors at or comparable to the GS/GM-13 through career SES level at the 28 departments and agencies we surveyed. Finally, we added additional strata to include a group of respondents who answered the previous survey and who still worked in the same agency at the same management level at the time of the 2000 survey. During the course of the survey, we deleted 212 persons from our sample who had either retired, separated, died, or otherwise left the agency or had some other reason that excluded them from the population of interest. We received useable questionnaires from 2,510 sample respondents, or about 70 percent of the remaining eligible sample. The response rate across the 28 agencies ranged from 59 percent to 82 percent. We took several steps to check the quality of our survey data. We reviewed and edited the completed questionnaires, made internal consistency checks on selected items, and checked the accuracy of data entry on a sample of surveys. We also followed up on a sample of nonrespondents to assess whether their views differed from the views of those who returned the survey. We randomly selected a subsample of 136 persons across all strata from that group of individuals who had not returned a completed questionnaire a month or more after the last of 3 attempts were made to elicit their participation in our survey. We received 67 useable surveys from this group. In addition, there were 41 individuals who, when contacted by telephone, refused to participate in the survey but were willing to answer 3 key questions from the survey. We included their answers to the three questions in our analysis of nonrespondents on those three questions. We analyzed the responses of these groups on selected items compared with the responses received from all other respondents. Our analyses of selected items did not show a sufficient or consistent degree of difference between survey nonrespondents and respondents, and, thus, we included the responses of our subsample with all other responses. Except where noted, percentages are based on all respondents returning useable questionnaires. The survey results are generalizable to the 28 departments and agencies we surveyed. All reported percentages are estimates that are based on the sample and are subject to some sampling error as well as nonsampling error. In general, percentage estimates in this report for the entire sample have confidence intervals ranging from about ±2 to ±7 percentage points at the 95 percent confidence interval. In other words, if all CFO Act agency managers and supervisors in our population had been surveyed, the chances are 95 out of 100 that the result obtained would not differ from our sample estimate in the more extreme cases by more than ±7 percent. In the appendixes of this report comparing each agency to the rest of government, confidence intervals for the reported agency percentages and the rest of government percentages range from ±2 to ±16 percentage points. Because a complex sample design was used and different types of statistical analyses are being done, the magnitude of sampling error will vary across the particular groups or items being compared due to differences in the underlying sample sizes and associated variances. Consequently, in some instances, a difference of a certain magnitude may be statistically significant. In other instances, depending on the nature of the comparison being made, a difference of equal or even greater magnitude may not achieve statistical significance. We note when differences are significant at the .05 probability level between 1997 and 2000 governmentwide data throughout the report and between an agency’s data and data for the rest of government in appendices II through XXIX. Figures 1 through 14 in the letter report do not show when individual agencies are statistically significantly different from each other. Of all the agencies surveyed, the responses from managers at the Department of Agriculture most closely paralleled those of other managers governmentwide in the aspects of agency climate, performance measurement, and using performance information. That is, Agriculture was not significantly different from the rest of the government for any of the survey questions we examine in this appendix. Agriculture is the only agency of the 28 we surveyed for which this is true. Survey results for one component of Agriculture, the Forest Service, are not included here but are reported in a separate appendix. Less than half (47 percent) of Agriculture’s managers expressed the view that their agency’s top leadership was strongly committed to achieving results to a great or very great extent, as shown below. For the rest of the government, 53 percent of managers indicated a similar level of commitment by top leadership to achieving results. Less than a quarter (24 percent) of managers at Agriculture reported that employees received positive recognition to a great or very great extent for helping their agencies accomplish their strategic goals, as shown below. Agriculture ranked in the lowest quarter of the 28 agencies surveyed. Thirty-eight percent of managers at Agriculture reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 59 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63 respectively. When asked about the types of performance measures they had for their programs, output measures and customer service measures had, respectively, the highest and lowest percentage of managers at Agriculture (51 and 34 percent) responding positively. Similar to the rest of the government, less than half of managers at Agriculture reported that they used performance information for each of the management activities shown below. Overall, the Agency for International Development (AID) was largely similar to the rest of government except for being lower in aspects of agency climate. AID was statistically significantly lower than the rest of the government in the percentage of managers who reported the following to at least a great extent: top leadership demonstrated a strong commitment to achieving results; managers were held accountable for results; and employees who helped the agency achieve its strategic goals were positively recognized. In addition, the percentage of managers responding to at least a great extent on positive recognition was the second lowest, after the Federal Aviation Administration (FAA), of the 28 agencies surveyed. In all other areas, AID was not statistically significantly different from the rest of the government. Thirty-nine percent of AID managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, and this percentage is 14 points lower than that of the rest of the government (53 percent). This difference is statistically significant. Fourteen percent of AID managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, and this percentage is 17 points lower than that of managers who responded this way for the rest of the government (31 percent). This difference is statistically significant. AID was the second lowest ranking agency in this regard, after FAA, of the 28 agencies included in the survey. Twenty-five percent of AID managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 43 percent indicated that they were held accountable for results to a similar extent, as shown below. AID managers’ response concerning the extent to which managers were held accountable for results (43 percent) was statistically significantly lower than the 63 percent reported for the rest of the government. AID was one of six agencies surveyed that had less than half of its managers reporting that they were held accountable to at least a great extent. (The others were the Department of Energy, Department of State, Forest Service, General Services Administration, and Health Care Financing Administration.) When asked about the types of performance measures in their programs, the highest percentage of AID managers (56 percent) reported having outcome measures and the lowest (28 percent) cited efficiency measures, as shown below. AID was one of only seven agencies where outcome measures were cited more frequently than output measures. (The others were the Department of Energy, Federal Emergency Management Agency, Department of Health and Human Services, National Aeronautics and Space Administration, National Science Foundation, and Office of Personnel Management.) In addition, the percentages of AID managers who reported having quality measures (48 percent) and outcome measures (56 percent) to a great or very great extent were both in the highest quarter of the 28 agencies surveyed. Similar to the rest of the government, less than half of AID managers reported that they used performance information for each of the management activities shown below. AID ranked in the lowest quarter of the agencies for the percentage of managers who reported that they used performance information when allocating resources (32 percent). Overall, the Department of Commerce was largely similar to the rest of the government except on two aspects of agency climate and using performance information. Commerce was statistically significantly higher than the rest of the government in the percentage of managers who reported that their agency’s top leadership was strongly committed to achieving results to at least a great extent, and the percentage of managers who indicated that they used performance information when setting individual job expectations for staff to a similar extent. In all other areas, Commerce was not statistically significantly different from the rest of the government. Almost two-thirds (65 percent) of managers at Commerce expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, and this percentage is 12 points higher than that of the rest of the government (53 percent). This difference is statistically significant. Thirty-nine percent of Commerce managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, whereas 30 percent of managers responded this way for the rest of the government. Forty-six percent of managers at Commerce reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 57 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 35 and 63 respectively. Commerce managers’ responses concerning the extent of their decisionmaking authority placed the agency in the highest quarter of the agencies surveyed, although the difference between Commerce and the rest of the government was not statistically significant. When asked about the types of performance measures in their programs, the highest percentage of Commerce managers (50 percent) reported having output measures and the lowest (30 percent) cited efficiency measures, as shown below. Forty-seven percent of managers reported having outcome measures to at least a great extent. Commerce ranked statistically significantly higher (55 percent) than the rest of the government (41 percent) in the percentage of managers who indicated that they used performance information when setting individual job expectations for staff, as shown below. Overall, the Department of Defense (DOD) was largely similar to the rest of government, except in aspects of agency climate and performance measurement. DOD was statistically significantly higher than the rest of the government for survey items concerning the percentage of managers who reported that their agency's top leadership was strongly committed to achieving results to at least a great extent, and the percentage of managers who reported having customer service and quality measures to at least a great extent. In all other areas, DOD was not statistically significantly different from the rest of the government. Fifty-nine percent of DOD managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, and this percentage is 9 points higher than that of the rest of the government (50 percent). This difference is statistically significant. Thirty-one percent of DOD managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, and this percentage is about the same as managers who responded this way for the rest of the government (30 percent). Forty percent of managers at DOD reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 66 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 34 and 61 respectively. When asked about the types of performance measures in their programs, the highest percentage of DOD managers (49 percent) reported having output measures and the lowest (36 percent) cited efficiency measures, as shown below. Forty-six percent of managers reported having outcome measures to at least a great extent. In addition, the percentages of DOD managers who reported having customer service and quality measures to a great or very great extent (both 45 percent) were significantly higher than the percentages of managers who responded in this way for the rest of the government (35 and 36 percent, respectively). Similar to the rest of the government, less than half of DOD managers reported that they used performance information for each of the management activities shown below. The Department of Education was statistically significantly lower than the rest of the government on one aspect of using performance information: the percentage of managers who reported using performance information when setting individual job expectations for staff. Education had the third lowest percentage of managers, after the Health Care Financing Administration and the National Science Foundation, among the 28 agencies surveyed who reported using performance information in this way to a great or very great extent. In all other areas, Education was not significantly different from the rest of the government. Sixty-two percent of managers at Education expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, compared with 53 percent for the rest of the government, as shown below. Twenty-three percent of managers at Education reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, compared with 31 percent for the rest of the government. Twenty-five percent of managers at Education reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 51 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63 respectively. When asked about the types of performance measures in their programs, the highest percentage of Education managers (52 percent) reported having output measures and the lowest (31 percent) cited quality measures, as shown below. Forty-eight percent of managers reported having outcome measures to at least a great extent. Similar to the rest of the government, less than half of managers at Education reported that they used performance information for each of the management activities shown below. In addition, Education was significantly lower (28 percent) than the rest of the government (41 percent) in the percentage of managers who indicated that they used performance information when setting individual job expectations for staff. Education was the third lowest agency surveyed, after the Health Care Financing Administration and the National Science Foundation, in the percentage of managers who reported using performance information in this way to a great or very great extent. The Department of Energy was largely similar to the rest of the government except for aspects of performance measurement and agency climate. It was statistically significantly higher than the rest of government in the percentage of managers who reported having outcome and efficiency measures to a great or very great extent. Energy was significantly below the rest of the government in the percentage of managers who reported that managers were held accountable for results to at least a great extent. In all other areas, the agency was not statistically significantly different from the rest of the government. Exactly half (50 percent) of managers at Energy expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, compared with 53 percent for the rest of government. Thirty-three percent of managers at Energy reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, which was about the same as managers who responded this way for the rest of the government (31 percent). Thirty-three percent of managers at Energy reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 49 percent indicated that they were held accountable for results to a similar extent, as shown below. Energy managers' response concerning the extent to which managers were held accountable for results (49 percent) was statistically significantly lower than the 63 percent reported by the rest of the government. Energy was one of six agencies surveyed that had less than half of its managers reporting that they were held accountable to at least a great extent. (The others were the Agency for International Development, Department of State, Forest Service, General Services Administration, and Health Care Financing Administration.) When asked about the types of performance measures in their programs, the highest percentage of managers at Energy (55 percent) reported having outcome measures and the lowest percentage (45 percent) cited quality measures, as shown below. Energy was one of only seven agencies where outcome measures were cited more frequently than output measures. (The others were the Agency for International Development, Federal Emergency Management Agency, Department of Health and Human Services, National Aeronautics and Space Administration, National Science Foundation, and Office of Personnel Management.) In addition, the percentages of managers at Energy who reported having efficiency (50 percent) and outcome measures (55 percent) to a great or very great extent were significantly higher than the percentages of managers who responded in this way for the rest of the government (35 and 44 percent, respectively). Similar to the rest of the government, less than half of managers at Energy reported that they used performance information for each of the management activities shown below. In general, the Environmental Protection Agency (EPA) was largely similar to the rest of the government except for two aspects of performance measurement. The agency was statistically significantly lower than the rest of the government in the percentage of managers who reported having efficiency and customer service measures to at least a great extent. In all other areas, EPA was not statistically significantly different from the rest of the government. Slightly more than half (52 percent) of EPA managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, and this percentage is about the same as reported by managers in the rest of the government (53 percent). Twenty-nine percent of EPA managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, and this percentage is about the same as that reported by managers in the rest of the government (31 percent). Forty-one percent of EPA managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 53 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63 respectively. When asked about the types of performance measures in their programs, the highest percentage of EPA managers reported having output measures (54 percent) and the lowest percentage (21 percent) cited efficiency measures, as shown below. Thirty-nine percent of managers reported having outcome measures to at least a great extent. In addition, the percentages of EPA managers who reported having efficiency measures (21 percent) and customer service measures (28 percent) to a great or very great extent were significantly below the percentages of managers who responded in this way for the rest of the government (36 and 39 percent, respectively). Similar to the rest of the government, less than half of EPA managers reported that they used performance information for each of the management activities shown below. In general, the Federal Aviation Administration (FAA) was worse than the rest of the government on multiple aspects of agency climate, performance measurement, and the use of performance information. The agency was statistically significantly lower than the rest of the government in the percentage of managers who reported that top agency leadership demonstrated a strong commitment to achieving results; that employees who helped the agency achieve its strategic goals received positive recognition; managers had the decisionmaking authority they needed; that they had outcome, customer service, or quality performance measures; and that they used performance information for all five management activities discussed in this appendix. For other survey items—being held accountable for results and having output and efficiency measures—FAA was not significantly different from the rest of the government. Of the 28 agencies surveyed, FAA rated significantly lower than the rest of the government on more of the survey items discussed in this appendix than any other agency. FAA had the lowest percentage of managers who reported to at least a great extent that their agency’s top leadership was strongly committed to achieving results, that employees received positive recognition for helping their agency accomplish its strategic goals, and using performance information when coordinating program efforts with other internal or external organizations. Less than a quarter (22 percent) of FAA managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This percentage is 33 points lower than that of the rest of the government (55 percent), and this difference is statistically significant. For this item, FAA ranked last of the 28 agencies included in the survey. Twelve percent of FAA managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is 20 points lower than that of managers who responded this way for the rest of the government (32 percent), and is statistically significant. For this item, FAA was the lowest ranking agency of the 28 agencies included in the survey. Sixteen percent of FAA managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 59 percent indicated that they were held accountable for results to a similar extent, as shown below. FAA was among five agencies surveyed where the gap between accountability and authority was wide and exceeded 40 percentage points. (The others were the Internal Revenue Service (IRS), Social Security Administration, Small Business Administration, and Department of Housing and Urban Development.) FAA managers’ response concerning the extent of their decisionmaking authority was the second lowest, after IRS, among the 28 agencies surveyed. FAA’s 16 percent is significantly lower than the 37 percent reported by the rest of the government. When asked about the types of performance measures in their programs, output measures were reported by the highest percentage of FAA managers (46 percent) and customer service measures were cited by the lowest percentage (27 percent), as shown below. In addition, the percentages of FAA managers who reported having customer service measures (27 percent), quality measures (29 percent), and outcome measures (34 percent) to a great or very great extent were all significantly below the percentages of managers who responded in this way for the rest of the government (39, 40, and 44 percent, respectively). FAA ranked significantly lower than the rest of the government in the percentage of managers who indicated that they used performance information for each of the management activities shown below. In addition, the agency ranked lowest (17 percent) among the 28 agencies surveyed concerning the use of such information when coordinating program efforts with internal or external organizations. The Federal Emergency Management Agency (FEMA) was generally similar to the rest of the government except for being lower on two aspects of performance measurement and one aspect of how managers use performance information. The agency was statistically significantly lower than the rest of the government in the percentage of managers who reported having output and outcome measures and who reported using performance information when adopting new program approaches or changing work processes to at least a great extent. In all other areas, FEMA was not statistically significantly different from the rest of the government. Forty-two percent of FEMA managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, compared with 53 percent for the rest of the government, as shown below. Slightly more than a quarter (26 percent) of FEMA managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, compared with 31 percent for the rest of the government. Forty-two percent of FEMA managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 69 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63, respectively. When asked about the types of performance measures in their programs, the highest percentage of FEMA managers (42 percent) reported having customer service measures and the lowest percentage (27 percent) cited output measures, as shown below. FEMA was the only agency of the 28 we surveyed where managers identified customer service measures as the most prevalent of the 5 performance measures asked about. In addition, the percentages of FEMA managers who reported having output measures (27 percent) and outcome measures (28 percent) to a great or very great extent were significantly below the percentages of managers who responded in this way for the rest of the government (50 and 44 percent respectively). Similar to the rest of the government, less than half of FEMA managers reported that they used performance information for each of the management activities shown below. In addition, the percentage of managers who indicated that they used performance information when adopting new program approaches or changing work processes at FEMA was significantly lower (29 percent) than that in the rest of the government (42 percent). Overall, the Forest Service was below the rest of the government in aspects of agency climate, performance measurement, and the use of performance information. It was statistically significantly lower than the rest of the government in the percentage of managers who reported that top agency leadership demonstrated a strong commitment to achieving results; managers were held accountable for results; they had outcome, quality, or efficiency performance measures; and they used performance information to set priorities, adopt new program approaches, or coordinate program efforts. Of the 28 agencies surveyed, Forest Service rated significantly lower than the rest of the government on more of the survey items discussed in this appendix than any other agency except for the Federal Aviation Administration (FAA) and Health Care Financing Administration. Forest Service was the lowest among the agencies we surveyed in the percentage of managers who reported that they were held accountable for achieving results to at least a great extent. In addition, the agency ranked the lowest among the 28 agencies surveyed in the percentage of managers who reported using performance information when adopting new approaches or changing work processes and the second lowest, next to FAA, in the percentage of managers who indicated that they used performance information when coordinating efforts with internal or external organizations. In all other areas, the agency was not statistically significantly different from the rest of the government. Slightly more than a quarter (26 percent) of managers at the Forest Service expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This percentage is 28 points lower than that of the rest of the government (54 percent), and this difference is statistically significant. Forest Service ranked second from last, just ahead of FAA, of the 28 agencies included in the survey. Twenty-seven percent of Forest Service managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, compared with 31 percent of managers that responded this way for the rest of the government. Forty-one percent of Forest Service managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas almost the same percentage of managers—40 percent—indicated that they were held accountable for results to a similar extent, as shown below. Forest Service managers’ response concerning the extent to which managers were held accountable for results (40 percent) was the lowest among the 28 agencies surveyed and is statistically significantly lower than the 63 percent reported by managers in the rest of the government. Forest Service was one of six agencies surveyed that had less than half of its managers reporting that they were held accountable to at least a great extent. (The others were the Agency for International Development, Department of Energy, Department of State, General Services Administration, and Health Care Financing Administration.) When asked about the types of performance measures in their programs, the highest percentage of Forest Service managers (56 percent) reported having output measures and the lowest (24 percent) cited efficiency measures, as shown below. In addition, the percentages of Forest Service managers who reported having outcome measures (29 percent), efficiency measures (24 percent), or quality measures (25 percent) to a great or very great extent were all significantly below the percentages of managers who responded in this way for the rest of the government (44, 36, and 39 percent, respectively). Forest Service was statistically significantly lower than the rest of the government in the percentage of managers who indicated that they used performance information when setting program priorities (34 percent), adopting new program approaches or changing work processes (25 percent), and coordinating program efforts with internal or external organizations (21 percent). The General Services Administration (GSA) was above the rest of the government in aspects of agency climate, performance measurement, and the use of performance information. The agency was statistically significantly higher than the rest of the government in the percentage of managers who reported that employees who helped the agency achieve its strategic goals received positive recognition; they had outcome, customer service, or efficiency performance measures; and they used performance information for four different management tasks. For the survey items discussed in this appendix, GSA and the Small Business Administration had the greatest number of items for which they were statistically significantly higher than the rest of the government. GSA was also significantly lower than the rest of the government concerning the percentage of managers who reported that they were held accountable for results. In all other areas, the agency was not statistically significantly different from the rest of the government. GSA ranked first among the 28 agencies surveyed in the percentage of managers reporting that employees received positive recognition for helping the agency accomplish its strategic goals to at least a great extent. The agency also had the highest percentage of managers who indicated that they had efficiency measures for their programs to at least a great extent and, along with the Department of Veterans Affairs (VA), GSA had the highest percentage of managers who reported having customer service measures to a similar extent. Almost two-thirds (63 percent) of GSA managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, compared with 53 percent for the rest of the government. Fifty-two percent of GSA managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is 22 points higher than that of managers who responded in this way for the rest of the government (30 percent) and the difference is statistically significant. GSA was the highest-ranking agency of the 28 agencies included in the survey for this item. Thirty-six percent of GSA managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 49 percent indicated that they were held accountable for results to a similar extent, as shown below. GSA managers’ response concerning the extent to which managers were held accountable for results (49 percent) was statistically significantly lower than the 63 percent reported by the rest of the government. GSA was one of six agencies surveyed that had less than half of its managers reporting that they were held accountable to at least a great extent. (The others were the Agency for International Development, Department of Energy, Department of State, Forest Service, and Health Care Financing Administration.) When asked about the types of performance measures in their programs, the highest percentage of GSA managers (58 percent) reported having output measures and the lowest (42 percent) cited quality measures, as shown below. In addition, the percentages of GSA managers who reported having efficiency measures (56 percent), customer service measures (54 percent), and outcome measures (56 percent) to a great or very great extent were significantly above the percentages of managers who responded in this way for the rest of the government. GSA ranked first among the 28 agencies surveyed in the percentage of managers who reported that they had efficiency measures for their programs to at least a great extent and also ranked first, along with VA, for the percentage reporting customer service measures to a similar extent. GSA was statistically significantly higher than the rest of the government in the percentage of managers who indicated that they used performance information for the management activities shown below, except for the allocation of resources. Overall, the Health Care Financing Administration (HCFA) was below the rest of the government in aspects of agency climate, the use of performance information, and especially, performance measurement. The agency was statistically significantly lower than the rest of the government for survey items concerning the percentages of managers who reported that managers were held accountable for results; reported having five different types of performance measures; and indicated that they used performance information for four management tasks. In all other areas, HCFA was not statistically significantly different from the rest of the government. Of the 28 agencies surveyed, HCFA rated significantly lower than the rest of the government on more of the survey items discussed in this appendix than any other agency except for the Federal Aviation Administration. HCFA had the lowest percentage of managers who reported having four of the five types of performance measures we asked about: output, efficiency, quality, and outcome measures. For the fifth type—customer service measures—the agency ranked second lowest ahead of the Nuclear Regulatory Commission (NRC). In addition, the agency had the lowest percentage of managers who indicated that they used performance information when setting individual job expectations for staff. HCFA was also second lowest among the agencies we surveyed in the percentage of managers who reported that they were held accountable for results to at least a great extent. Less than half (46 percent) of HCFA managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, compared with 53 percent for the rest of the government. Thirty percent of HCFA managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, and this percentage is almost the same as that of managers who responded this way for the rest of the government (31 percent). Twenty-eight percent of HCFA managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 42 percent indicated that they were held accountable for results to a similar extent, as shown below. HCFA managers’ response concerning the extent to which managers were held accountable for results (42 percent) was significantly lower than the 63 percent reported by the rest of the government. HCFA was second lowest of the agencies we surveyed, after Forest Service, in the percentage of managers who reported that they were held accountable to at least a great extent. The agency was also one of six agencies surveyed that had less than half of its managers reporting that they were held accountable to at least a great extent. (The others were the Agency for International Development, Department of Energy, Department of State, Forest Service, and General Services Administration.) When asked about the types of performance measures in their programs, the highest percentage of HCFA managers (19 percent) reported having output measures and the lowest (9 percent) cited efficiency measures, as shown below. Seventeen percent of managers reported having outcome measures to at least a great extent. The percentages of HCFA managers who reported having each of the five types of performance measures shown below were all statistically significantly below the percentages of managers who responded in this way for the rest of the government. In addition, HCFA was the lowest ranking agency of the 28 agencies surveyed for each type of performance measure shown below—except for customer service measures, where it ranked second lowest next to NRC. HCFA was statistically significantly lower than the rest of the government in the percentage of managers who indicated that they used performance information for all of the management activities shown below, except for adopting new program approaches and changing work processes. In addition, the agency ranked lowest among the 28 agencies surveyed concerning the use of such information when setting individual job expectations for staff (16 percent), and second lowest ahead of the National Science Foundation, when using performance information to set program priorities (27 percent). The Department of Health and Human Services (HHS) was largely similar to the rest of the government, except for one aspect of agency climate. HHS was statistically significantly higher than the rest of the government in the percentage of managers who reported that employees received positive recognition to at least a great extent for helping the agency achieve its strategic goals. In all other areas, the agency was not significantly different from the rest of the government. Survey results for one component of HHS, the Health Care Financing Administration, are not included here but are reported in a separate appendix. Sixty percent of HHS managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, compared with 53 percent for the rest of the government. Forty-six percent of HHS managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is 16 points higher than that of managers who responded this way for the rest of the government (30 percent) and this difference is statistically significant. Forty-three percent of HHS managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 68 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 35 and 62 respectively. HHS managers ranked in the top quarter of the 28 agencies surveyed for managers' perceptions concerning both the extent of decisionmaking authority and the degree to which managers were held accountable for results, although the differences between HHS and the rest of the government on these two items were not statistically significant. When asked about the types of performance measures in their programs, the highest percentage of HHS managers (46 percent) reported having outcome measures and the lowest (37 percent) cited efficiency measures, as shown below. HHS was one of only seven agencies where outcome measures were cited more frequently than output measures. (The others were the Agency for International Development, Department of Energy, Federal Emergency Management Agency, National Aeronautics and Space Administration, National Science Foundation, and Office of Personnel Management.) The agency ranked in the lowest quarter of the agencies surveyed for the percentage of managers reporting that their programs had output measures (44 percent), although the difference between HHS and the rest of the government was not statistically significant. Similar to the rest of the government, less than half of HHS managers reported that they used performance information for each of the management activities shown below. The Department of Housing and Urban Development (HUD) was above the rest of the government in aspects of agency climate, performance measurement, and particularly, in the use of performance information. The agency was statistically significantly higher than the rest of the government in the percentages of managers who reported that employees received positive recognition for helping the agency achieve its strategic goals; managers are held accountable for results; they have output and outcome measures; and they use performance information to set program priorities, allocate resources, coordinate program efforts, and set job expectations. Of the 28 agencies surveyed, HUD had the second greatest number of total items for which the agency was significantly higher than the rest of the government after the General Services Administration and the Small Business Administration (SBA), both of which had 1 more. In all other areas, HUD was not significantly different from the rest of the agencies we surveyed. Almost two-thirds (64 percent) of HUD managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, whereas 53 percent of managers responded this way for the rest of the government, as shown below. HUD managers were in the top quarter of agencies surveyed for this item. Forty-seven percent of HUD managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is 17 points higher than that of managers who responded this way for the rest of the government (30 percent) and is a statistically significant difference. Thirty-six percent of HUD managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help their agency accomplish its strategic goals, whereas 79 percent indicated that they were held accountable for results to a similar extent, as shown below. HUD was among five agencies surveyed where the gap between accountability and authority was wide and exceeded 40 percentage points. (The others were the Federal Aviation Administration, Internal Revenue Service, SBA, and Social Security Administration.) HUD managers’ response concerning the extent of their decisionmaking authority (36 percent) was identical to that of the rest of the government. Their response concerning the extent to which managers were held accountable for results (79 percent) was statistically significantly higher than the 63 percent reported by managers in the rest of the government. HUD ranked highest in its response concerning accountability among the 28 agencies included in the survey. When asked about the types of performance measures in their programs, the highest percentage of HUD managers reported having output measures (75 percent) which was statistically significantly higher than the rest of the government (50 percent). In addition, HUD and SBA were first among the 28 agencies surveyed in the percentage of managers reporting this type of performance measure. HUD was also significantly higher than the rest of the government in the percentage of its managers who reported having outcome measures. HUD and the National Aeronautics and Space Administration were first among the agencies surveyed in the percentage of managers reporting outcome measures (63 percent). Of the five measures we asked about, HUD managers cited customer services measures least frequently (36 percent), as shown below. HUD ranked statistically significantly higher than the rest of the government in the percentage of managers who indicated that they used performance information for each of the management activities shown below, except for adopting new program approaches or changing work processes. In addition, the agency ranked first among the 28 agencies we surveyed concerning the use of performance information when setting program priorities (64 percent) and coordinating program efforts with internal or external organizations (57 percent). HUD also ranked second to SBA in the percentage of managers who reported using performance information when setting individual job expectations for staff (59 percent). The Department of the Interior was below the rest of the government in aspects of agency climate, performance measurement, and the use of performance information. The agency was statistically significantly lower than the rest of the government in the percentages of managers who expressed the view that the agency's top leadership was strongly committed to achieving results to at least a great extent; reported having efficiency and quality measures; and indicated that they used performance information for setting program priorities, allocating resources, and coordinating program efforts. In all other areas, the agency was not statistically significantly different from the rest of the government. Less than half (44 percent) of managers at Interior expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This percentage is 10 points lower than that of the rest of the government (54 percent) and this difference is statistically significant. Interior ranks in the bottom quarter of the 28 agencies included in the survey. Thirty-three percent of Interior's managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, and this is about the same as the percentage of managers who responded this way for the rest of the government (30 percent). Forty-three percent of managers at Interior reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 60 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 35 and 63, respectively. When asked about the types of performance measures in their programs, the highest percentage of Interior managers (48 percent) reported having output measures and the lowest (24 percent) cited efficiency measures, as shown below. Thirty-nine percent of managers reported having outcome measures. In addition, the percentages of Interior managers who reported having efficiency measures (24 percent) and quality measures (30 percent) to a great or very great extent were statistically significantly below the percentages of managers reporting these results for the rest of the government. Interior also ranked in the lowest quarter of the agencies surveyed for efficiency measures. Interior was statistically significantly lower than the rest of the government in the percentage of managers who indicated that they used performance information for all of the management activities shown below, except for adopting new program approaches/changing work processes and setting individual job expectations for staff. The Internal Revenue Service (IRS) was below the rest of the government in aspects of agency climate, performance measurement, and the use of performance information. The agency was significantly lower than the rest of government in the percentage of managers who reported that top leadership at their agency demonstrated a strong commitment to achieving results; that managers had the decisionmaking authority they needed to help their agency accomplish its strategic goals; that their programs had output and outcome performance measures; and that they used performance information when setting program priorities, adopting new program approaches or changing work processes, and coordinating program efforts. In all other areas, the agency was not statistically significantly different from the rest of the government. IRS had the lowest percentage of managers who reported that they had the decisionmaking authority they needed to help their agency accomplish its strategic goals to at least a great extent. The agency also ranked second to last, next to the Health Care Financing Administration, among the agencies surveyed in the percentage of managers who indicated that they had outcome measures for their programs. Forty-two percent of managers at IRS expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This result is 12 percentage points lower than the rest of government (54 percent) and this difference is statistically significant. IRS ranked in the lowest quarter of the agencies surveyed. Twenty-seven percent of IRS managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, not significantly different from the percentage of managers who responded this way for the rest of the government (31 percent). Fifteen percent of IRS managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 60 percent indicated that they were held accountable for results to a similar extent, as shown below. IRS was among five agencies surveyed where the gap between accountability and authority was wide and exceeded 40 percentage points. (The others were the Federal Aviation Administration, Social Security Administration, Small Business Administration, and Department of Housing and Urban Development.) IRS managers' response concerning the extent of their decisionmaking authority was the lowest among the 28 agencies surveyed. The IRS' 15 percent is statistically significantly lower than 37 percent reported by the rest of the government. When asked about the types of performance measures in their programs, the highest percentage of IRS managers (37 percent) reported having quality measures and the lowest (28 percent) cited outcome measures, as shown below. In addition, the percentages of IRS managers who reported having output measures (32 percent) and outcome measures (28 percent) to a great or very great extent were significantly below the percentages of managers reporting these results for the rest of the government. IRS ranked statistically significantly lower than the rest of the government in the percentage of managers who indicated that they used performance information for setting program priorities (36 percent), adopting new program approaches or changing work processes (29 percent), and coordinating program efforts (27 percent), as shown below. The Department of Justice was largely similar to the rest of the government, except for two aspects of performance measurement. It was statistically significantly lower than the rest of the government in the percentages of managers who reported having customer service and quality performance measures. In all other areas, Justice was not statistically significantly different from the rest of the government. Less than half (49 percent) of managers at Justice expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, compared with 54 percent for the rest of the government. Twenty-six percent of managers at Justice reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is not significantly different from that of managers who responded this way in the rest of the government (31 percent). Thirty-three percent of managers at Justice reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 60 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63, respectively. When asked about the types of performance measures in their programs, the highest percentage of managers at Justice (44 percent) reported having output measures and the lowest (20 percent) cited customer service measures, as shown below. Thirty-eight percent of managers reported having outcome measures. In addition, percentages of managers at Justice who reported having customer service measures (20 percent) and quality measures (25 percent) to a great or very great extent were significantly below that of the rest of the government. Similar to the rest of the government, less than half of managers at Justice reported that they used performance information for each of the management activities shown below. In addition, Justice ranked in the second lowest quarter of the agencies surveyed for the percentage of managers who reported using performance information for each of the management activities shown below. The Department of Labor was largely similar to the rest of the government, except in one aspect of agency climate and one aspect of performance measurement. The agency was statistically significantly lower than the rest of the government in the percentage of managers who reported that employees received positive recognition for helping their agency achieve its strategic goals to at least a great extent and the percentage of managers reporting that they had customer service measures for their programs. In all other areas, Labor was not statistically significantly different from the rest of the government. Over half (56 percent) of managers at Labor expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This percentage is about the same as that of the rest of the government (53 percent). Eighteen percent of managers at Labor reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is 13 points lower than that of managers who responded this way for the rest of the government (31 percent) and this difference is statistically significant. For this survey item, Labor was the third lowest ranking agency, after the Federal Aviation Administration and the Agency for International Development, of the 28 agencies included in the survey. Forty percent of managers at Labor reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 62 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63, respectively. When asked about the types of performance measures in their programs, the highest percentage of managers at Labor (55 percent) reported having output measures and the lowest (28 percent) cited customer service measures, as shown below. In addition, the percentage of managers at Labor who reported having customer service measures to a great or very great extent was significantly below the percentage of managers for the rest of the government (39 percent). Forty percent of managers at Labor reported having outcome measures. Similar to the rest of the government, less than half of managers at Labor reported that they used performance information for each of the management activities shown below. In addition, the agency ranked in the lowest quarter of agencies we surveyed concerning the use of such information when coordinating program efforts with internal or external organizations (27 percent). The National Aeronautics and Space Administration (NASA) was above the rest of the government in aspects of agency climate, performance measurement, and the use of performance information. It was statistically significantly higher than the rest of the government in the percentages of managers who reported that the agency’s top leadership demonstrated a strong commitment to achieving results; that the agency provided positive recognition of employees who helped the agency achieve its strategic goals; that they had outcome, quality, and customer service measures; and that they used performance information to allocate resources. In all other areas, the agency was not statistically significantly different from the rest of the government. For the items discussed in this appendix, NASA was in the top quarter of the 28 agencies we surveyed when ranked by the total number of items they had that were statistically significantly higher than the rest of the government. The percentage of NASA managers reporting that the agency’s leadership demonstrated a strong commitment to achieving results to at least a great extent was second highest, along with the Social Security Administration (SSA), and just behind the National Science Foundation (NSF), among the agencies we surveyed. The agency also had the highest percentage of managers reporting that their programs had quality measures and was tied for second highest with the Office of Personnel Management (OPM), after the Department of Veterans Affairs (VA) and the General Services Administration (GSA), in the percentage of managers reporting that they had customer service measures. Over two-thirds (68 percent) of NASA managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This percentage is 15 points higher than that of the rest of the government (53 percent), and this difference is statistically significant. NASA ranked second highest, along with SSA and after NSF, of the 28 agencies included in the survey. Forty-seven percent of NASA managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is 17 points higher than that of managers who responded this way for the rest of the government (30 percent) and this difference is statistically significant. Forty-one percent of NASA managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 68 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63, respectively. When asked about the types of performance measures in their programs, the highest percentage of NASA managers (63 percent) reported having outcome measures and the lowest (43 percent) cited efficiency measures, as shown below. NASA was one of only seven agencies where outcome measures were cited more frequently than output measures. (The others were the Agency for International Development, Department of Energy, Federal Emergency Management Agency, Department of Health and Human Services, National Science Foundation, and Office of Personnel Management.) In addition, the percentages of NASA managers who reported having outcome measures (63 percent), quality measures (61 percent), or customer service measures (52 percent) to a great or very great extent were all significantly above the percentages of managers reporting these results for the rest of the government. NASA ranked highest of 28 agencies in the percentage of managers reporting that their programs had quality measures and second highest, along with OPM and after VA and GSA, in the percentage citing customer service measures. NASA ranked statistically significantly higher than the rest of the government in the percentage of managers who indicated that they used performance information when allocating resources (54 and 43 percent, respectively), as shown below. The National Science Foundation (NSF) was above the rest of the government in one aspect of agency climate, and the agency was below the rest of the government in aspects of the use of performance information. It was statistically significantly higher than the rest of the government and ranked first of the 28 agencies included in the survey in the percentage of managers who reported that their agency’s top leadership was strongly committed to achieving results to at least a great extent. NSF was significantly lower than the rest of the government in the percentage of managers who indicated that they used performance information when carrying out three management tasks: setting program priorities, allocating resources, and setting individual job expectations. For all three of these items, NSF ranked among the lowest of the agencies we surveyed. The agency had the lowest percentage of managers reporting that they used performance information when setting program priorities and when allocating resources. NSF had the second lowest percentage, next to the Health Care Financing Administration, for managers reporting that they used this information when setting individual job expectations for staff. In all other areas, NSF was not statistically significantly different from the rest of the government. More than two-thirds (69 percent) of NSF managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This percentage is 16 points higher than that of the rest of the government (53 percent), and this difference is statistically significant. For this survey item, NSF ranks first of the 28 agencies included in the survey. Thirty-seven percent of NSF managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, compared with 31 percent for the rest of the government. Forty-four percent of NSF managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 62 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63, respectively. NSF managers’ response concerning the extent of their decisionmaking authority ranked third highest among the 28 agencies surveyed (after the Office of Personnel Management and the Department of Commerce), although the difference from the rest of the government was not statistically significant. When asked about the types of performance measures in their programs, the highest percentage of NSF managers reported having outcome measures (55 percent) and the agency ranked in the top quarter of the agencies surveyed for the percentage of managers citing this type of measure. The lowest percentage of NSF managers responding on this topic were those who reported having efficiency measures to at least a great extent in their programs (35 percent), as shown below. NSF was one of only seven agencies where outcome measures were cited more frequently than output measures. (The others were the Agency for International Development, Department of Energy, Federal Emergency Management Agency, Department of Health and Human Services, National Aeronautics and Space Administration, and Office of Personnel Management.) NSF was significantly lower than the rest of the government in the percentage of managers who indicated that they used performance information for each of the management activities shown below, except for adopting new program approaches or changing work processes and coordinating program efforts with internal or external organizations. In addition, the agency ranked last among the 28 agencies we surveyed concerning the use of performance information when setting program priorities (26 percent) and allocating resources (24 percent) and second from last, ahead of HCFA, when setting individual job expectations for staff (22 percent). The Nuclear Regulatory Commission (NRC) was above the rest of the government for aspects of agency climate, and the agency was both above and below the rest of the government for different aspects of performance measurement. It was statistically significantly higher than the rest of the government in the percentages of managers who reported that their agency’s top leadership demonstrated a strong commitment to achieving results; that the agency provided positive recognition of employees who helped the agency achieve its strategic goals; and that they used output measures. In addition, NRC was significantly lower in the percentage of managers who reported having customer service, quality, and outcome measures. In all other areas, the agency was not statistically significantly different from the rest of the government. NRC ranked fourth, after the National Science Foundation, Social Security Administration, and National Aeronautics and Space Administration, in the percentage of managers who reported that their agency’s top leadership was strongly committed to achieving results to at least a great extent and ranked last among the agencies surveyed in the percentage of managers who reported having customer service measures. More than two-thirds (67 percent) of NRC managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This percentage is 14 points higher than that of the rest of the government (53 percent), and this difference is statistically significant. Forty-five percent of NRC managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is 14 points higher than that of managers who responded this way for the rest of the government (31 percent) and this difference is statistically significant. Thirty-two percent of NRC managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 69 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63, respectively. When asked about the types of performance measures in their programs, the highest percentage of NRC managers (68 percent) reported having output measures and the lowest (14 percent) cited customer service measures, as shown below. NRC was statistically significantly higher than the rest of the government in the percentage of its managers who identified having output measures to a great or very great extent (68 percent). The percentages of NRC managers who reported having customer service measures (14 percent), quality measures (27 percent), or outcome measures (30 percent) were all statistically significantly below the percentages of managers for the rest of the federal government. In addition, NRC ranked last of the 28 agencies included in the survey for the percentage of managers who reported that they had customer service measures. Similar to the rest of the government, less than half of NRC managers reported that they used performance information for each of the management activities shown below. The Office of Personnel Management (OPM) was higher than the rest of the government in aspects of agency climate and the use of performance information. The agency was statistically significantly higher than the rest of the government in the percentages of managers who reported that their agency provided positive recognition of employees who helped the agency achieve its strategic goals; that managers had the decisionmaking authority they needed to help their agency accomplish its strategic goals; and that they used performance information when allocating resources and adopting new program approaches or changing work processes. In all other areas, the agency was not statistically significantly different from the rest of the government. Of the 28 agencies surveyed, OPM had the highest percentage of managers who reported that they had the decisionmaking authority they needed to achieve results to at least a great extent. The agency ranked third, after the General Services Administration (GSA) and the Small Business Administration (SBA), in the percentage of managers who indicated that employees received positive recognition for achieving results to a great or very great extent. OPM managers again ranked first among the agencies surveyed in their use of performance information when allocating resources and when adopting new or different program approaches. Almost two-thirds (63 percent) of OPM managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, which is not a statistically significant difference from managers in the rest of government (53 percent). Forty-nine percent of OPM managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is 18 points higher than that of managers who responded this way for the rest of the government (31 percent) and this difference is statistically significant. OPM was the third highest-ranking agency, behind GSA and SBA, of the 28 agencies included in the survey. Fifty-eight percent of OPM managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 76 percent indicated that they were held accountable for results to a similar extent, as shown below. OPM managers’ response concerning the extent of their decisionmaking authority was the highest among the 28 agencies surveyed. OPM’s 58 percent is statistically significantly higher than the 36 percent reported by the rest of the government. OPM managers’ response concerning the extent to which managers were held accountable for results (76 percent) was the second highest of all agencies surveyed (after HUD), although OPM was not statistically significantly different from the rest of the government (63 percent). When asked about the types of performance measures in their programs, the highest percentage of OPM managers (58 percent) reported having outcome measures and the lowest (43 percent) cited efficiency measures, as shown below. OPM was one of only seven agencies where outcome measures were cited more frequently than output measures. (The others were the Agency for International Development, Department of Energy, Federal Emergency Management Agency, Department of Health and Human Services, National Aeronautics and Space Administration, and National Science Foundation.) In addition, OPM, along with the National Aeronautics and Space Administration (NASA) and behind the Department of Veterans Affairs (VA) and GSA, had the second highest percentage of managers who reported that their programs had customer service measures (52 percent) and third highest after NASA and VA for quality measures (54 percent) and, after NASA and HUD, for outcome measures (58 percent). OPM was not statistically significantly different from the rest of the government on these items. OPM ranked statistically significantly higher than the rest of the government in the percentage of managers who indicated that they used performance information when allocating resources (66 percent) and when adopting new program approaches or changing work processes (64 percent), as shown below. The agency ranked first among the 28 agencies surveyed for both of these items. In addition, the agency was among the top quarter of agencies concerning the use of performance information when setting program priorities (56 percent) or setting individual job expectations for staff (50 percent). However, OPM was not statistically significantly different from the rest of the government on either of these two items. The Small Business Administration (SBA) was higher than the rest of the government in aspects of agency climate, performance measurement, and, particularly, the use of performance information. The agency was lower than the rest of the government in one aspect of performance measurement. It was statistically significantly higher than the rest of the government for survey items concerning the percentage of employees receiving positive recognition, accountability for results, having output measures, and using performance information for all five key activities discussed in this appendix. SBA was significantly below the rest of the government in the percentage of managers who reported having quality measures. Of the survey items discussed in this appendix, SBA and the General Services Administration (GSA) had the greatest number of items for which they were significantly higher than the rest of the government. In all other areas, SBA was not statistically significantly different from the rest of the government. The agency ranked second after GSA among the 28 agencies surveyed in the percentage of managers reporting that employees received positive recognition for helping the agency accomplish its strategic goals to at least a great extent. While generally comparable to the rest of the government for the other types of performance measures we asked about, SBA was ranked first among the agencies surveyed—along with the Department of Housing and Urban Development (HUD)—in the percentage of managers who reported that they had output measures. SBA also ranked first in the percentage of managers who indicated that they used performance information when setting individual job expectations. Slightly more than half (54 percent) of SBA managers expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below, and this percentage is about the same as managers who responded this way for the rest of the government (53 percent). Fifty-one percent of SBA managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below. This percentage is 21 points higher than that of managers who responded this way for the rest of the government (30 percent) and this difference is statistically significant. SBA ranked second highest, after GSA, of the 28 agencies included in the survey. Twenty-seven percent of SBA managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 75 percent indicated that they were held accountable for results to a similar extent, as shown below. SBA was among five agencies surveyed where the gap between accountability and authority was wide and exceeded 40 percentage points. (The others were the Federal Aviation Administration, Internal Revenue Service, Social Security Administration, and Department of Housing and Urban Development.) SBA managers’ response concerning the extent to which managers are held accountable for results (75 percent) was statistically significantly higher than the 63 percent reported by the rest of the government. SBA managers’ response concerning the extent of their decisionmaking authority placed the agency in the bottom quarter of agencies surveyed, although the difference between SBA (27 percent) and the rest of the government (36 percent) was not statistically significant. When asked about the types of performance measures in their programs, the highest percentage of SBA managers (75 percent) reported having output measures and the lowest (24 percent) cited quality measures, as shown below. Forty-four percent of managers reported having outcome measures. SBA was statistically significantly higher than the rest of the government in the percentage of its managers who identified having output measures to a great or very great extent (75 percent). However, the percentage of SBA managers who reported having quality measures (24 percent) was significantly below the percentage for the rest of the government (39 percent). In addition, SBA was tied for first with HUD among the 28 agencies surveyed in the percentage of managers who reported that they had output measures. SBA was statistically significantly higher than the rest of the government in the percentage of managers who indicated that they used performance information for all five management activities shown below. In addition, the agency ranked first among the 28 agencies we surveyed concerning the use of performance information when setting individual job expectations for staff (66 percent). SBA was second from the top in the percentage of managers reporting that they used such information when allocating resources (61 percent), after the Office of Personnel Management (OPM). SBA also ranked second to OPM in the percentage of managers who cited using this information when adopting new program approaches or changing work processes (61 percent). Finally, it was third, after HUD and the Social Security Administration, in the percentage of managers reporting that they used such information when setting program priorities (61 percent). The Social Security Administration (SSA) was above the rest of the government in aspects of agency climate, performance measurement, and the use of performance information, and it was below the rest of the government in other aspects of agency climate and performance measurement. The agency was statistically significantly higher than the rest of the government in the percentage of managers reporting that their agency’s top leadership had a strong commitment to achieving results; that they used output measures, and that they used performance information to set program priorities. SSA was significantly lower in the percentage of managers reporting that they had the decisionmaking authority they needed, and that they had quality performance measures. In all other areas, the agency was not statistically significantly different from the rest of the government. SSA and the National Aeronautics and Space Administration (NASA) were second highest among the 28 agencies, after the National Science Foundation (NSF), in the percentage of managers who reported that their agency’s top leadership was strongly committed to achieving results to at least a great extent. Yet, SSA was the third lowest agency, before the Federal Aviation Administration (FAA) and the Internal Revenue Service (IRS), in the percentage of managers who believed that they had the decisionmaking authority they needed to achieve results to a similar extent. Over two-thirds (68 percent) of managers at SSA expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This percentage is 15 points higher than that of the rest of the government (53 percent), and this difference is statistically significant. SSA and NASA were second to NSF for the 28 agencies included in the survey on this item. Thirty-six percent of SSA managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals compared with 30 percent for the rest of the government, as shown below. Twenty-three percent of SSA managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 68 percent indicated that they were held accountable for results to a similar extent, as shown below. SSA was among five agencies surveyed where the gap between accountability and authority was wide and exceeded 40 percentage points. (The others were the Internal Revenue Service, Federal Aviation Administration, Small Business Administration, and Department of Housing and Urban Development.) SSA managers’ response concerning the extent of their decisionmaking authority (23 percent) was the third lowest, ahead of FAA and IRS, among the 28 agencies surveyed and is statistically significantly lower than the 36 percent reported by the rest of the government. When asked about the types of performance measures in their programs, the highest percentage of SSA managers (73 percent) reported having output measures and the lowest (29 percent) cited quality measures, as shown below. Forty-eight percent of managers reported having outcome measures. SSA was statistically significantly higher than the rest of the government in the percentage of its managers who identified having output measures to a great or very great extent. The percentage of SSA managers who reported having quality measures (29 percent) was significantly below the percentages of managers for the rest of the government. In contrast to the rest of the federal government, 62 percent of managers at SSA reported that they used performance information to a great or very great extent when setting program priorities. This is a statistically significant difference when compared to the 44 percent of managers who responded in this way across the rest of the government, as shown below. The Department of State was below the rest of the government in aspects of agency climate, performance measurement, and the use of performance information. It was statistically significantly lower than the rest of the government in the percentage of managers who reported that managers were held accountable by their agency for results. State also ranked significantly lower in the percentage of managers who reported having customer service and quality measures and using performance information when coordinating program efforts with other organizations. In all other areas, State was not statistically significantly different from the rest of the government. Less than half (46 percent) of managers at the Department of State expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, compared with 53 percent for the rest of the government, as shown below. Thirty-six percent of State managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, compared with 30 percent for the rest of the government, as shown below. Thirty-five percent of managers at State reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 49 percent indicated that they were held accountable for results to a similar extent, as shown below. State managers' response concerning the extent to which managers were held accountable for results (49 percent) was statistically significantly lower than the 63 percent reported by the rest of the government. State was one of six agencies surveyed that had less than half of its managers reporting that they were held accountable to at least a great extent. (The others were the Agency for International Development, Department of Energy, Forest Service, General Services Administration, and Health Care Financing Administration.) When asked about the types of performance measures in their programs, the highest percentage of managers at State (43 percent) reported having output measures and the lowest (21 percent) cited customer service measures, as shown below. Thirty-seven percent of managers reported having outcome measures. In addition, the percentages of State managers who reported having customer service measures (21 percent) and quality measures (25 percent) to a great or very great extent were statistically significantly below the percentages of managers reporting these results for the rest of the government. State ranked statistically significantly lower than the rest of the government in the percentage of managers who indicated that they used performance information when coordinating program efforts with internal or external organizations (21 percent). The Department of Transportation (DOT) was below the rest of the government in one aspect of performance measurement. It was statistically significantly lower than the rest of the government in the percentage of managers who reported having outcome measures for their programs. In all other areas, DOT was not significantly different from the rest of the government. Survey results for one component of DOT, the Federal Aviation Administration, are not included here but are reported in a separate appendix. Fifty-nine percent of managers at DOT expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, compared with 53 percent of managers in the rest of the government, as shown below. Thirty-one percent of DOT managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, as shown below, and this percentage is equal to that of managers in the rest of the government. Forty-three percent of DOT managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 55 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63, respectively. When asked about the types of performance measures in their programs, the highest percentage of DOT managers (42 percent) reported having output measures and the lowest (27 percent) cited efficiency measures, as shown below. In addition, the percentage of DOT managers who reported having outcome measures to a great or very great extent (32 percent) was statistically significantly below the percentage of managers reporting these results for the rest of the government (44 percent). Similar to the rest of the government, less than half of managers at DOT reported that they used performance information for each of the management activities shown below. In addition, DOT ranked in the lowest quarter of the agencies surveyed for the percentage of managers who reported using performance information when allocating resources (34 percent) and when setting individual job expectations with staff (31 percent). The Department of the Treasury was above the rest of the government in aspects of agency climate, performance measurement, and the use of performance information. The agency was statistically significantly higher than the rest of the government in the percentage of managers who expressed the view that their agency’s top leadership was strongly committed to achieving results to at least a great extent; who reported that they had both output and outcome measures for their programs; and who indicated that they used performance information when coordinating program efforts. For the items discussed in this appendix, Treasury was in the top quarter of the 28 agencies we surveyed when ranked by the total number of items they had that were statistically significantly higher than the rest of the government. In all other areas, Treasury was not statistically significantly different from the rest of the government. Survey results for one component of Treasury, the Internal Revenue Service, are not included here but are reported in a separate appendix. Almost two-thirds (64 percent) of managers at Treasury expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, as shown below. This percentage is 11 points higher than the rest of the government (53 percent) and is statistically significantly different. Thirty-nine percent of Treasury managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, compared with 30 percent for the rest of the government, as shown below. Thirty-nine percent of Treasury managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 65 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 63, respectively. When asked about the types of performance measures in their programs, the highest percentage of Treasury managers (66 percent) reported having output measures and the lowest (37 percent) cited customer service measures, as shown below. In addition, the percentages of Treasury managers who reported having output measures (66 percent) and outcome measures (56 percent) to a great or very great extent were significantly above the percentages of managers reporting these results for the rest of the government (50 and 43 percent, respectively). Treasury was significantly higher than the rest of the government in the percentage of managers who indicated that they used performance information when coordinating program efforts with internal or external organizations (49 percent). The Department of Veterans Affairs (VA) was above the rest of the government in aspects of performance measurement and the use of performance information. It was statistically significantly higher than the rest of the government in the percentage of managers who reported having output, customer service, and quality measures and those who reported using performance information to set program priorities, adopt new program approaches or change work processes, and coordinate program efforts with other organizations. In all other areas, the agency was not statistically significantly different from the rest of the government. For the items discussed in this appendix, VA was in the top quarter of the 28 agencies we surveyed when ranked by the total number of items they had that were statistically significantly higher than the rest of the government. In addition, VA and the General Services Administration (GSA) ranked highest among the 28 agencies surveyed in the percentage of managers who reported having customer service measures for their programs. Less than half (47 percent) of managers at VA expressed the view that their top leadership was strongly committed to achieving results to a great or very great extent, compared with 54 percent for the rest of the government, as shown below. Twenty-three percent of VA managers reported that employees received positive recognition to a great or very great extent for helping their agency accomplish its strategic goals, compared with 31 percent for the rest of the government, as shown below. Thirty-seven percent of VA managers reported that they had, to a great or very great extent, the decisionmaking authority they needed to help the agency accomplish its strategic goals, whereas 67 percent indicated that they were held accountable for results to a similar extent, as shown below. For the rest of the government, these percentages were 36 and 62, respectively. When asked about the types of performance measures in their programs, the highest percentage of VA managers (62 percent) reported having output measures and the lowest (44 percent) cited efficiency measures, as shown below. Forty-nine percent of managers reported having outcome measures. In addition, the percentages of VA managers who reported having customer service measures (54 percent), quality measures (57 percent), and output measures (62 percent) to a great or very great extent were significantly above the percentages of managers reporting these results for the rest of the government. VA and GSA were the highest among the agencies surveyed for the percentage of managers who reported having customer service measures for their programs. VA was significantly higher than the rest of the government in the percentage of managers who indicated that they used performance information when setting program priorities (60 percent), adopting new program approaches or changing work processes (56 percent), and coordinating program efforts with internal or external organizations (53 percent). The first copy of each GAO report is free. Additional copies of reports are $2 each. A check or money order should be made out to the Superintendent of Documents. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. Orders by mail: U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Orders by visiting: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders by phone: (202) 512-6000 fax: (202) 512-6061 TDD (202) 512-2537 Each day, GAO issues a list of newly available reports and testimony. 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Under a variety of statutes, federal employees, including postal workers, can file a complaint alleging unlawful employment discrimination. Each discrimination complaint contains two key elements that provide information about the nature of the conflict. The first of these two elements is the “basis” of the allegation under federal antidiscrimination law. An employee can allege discrimination on any of seven bases—race, color, national origin, sex, religion, age, and disability. In addition, federal employees can claim an eighth basis—reprisal—if they believe that they have been retaliated against for having filed a complaint, participated in an investigation of a complaint, or opposed a prohibited personnel practice. Depending upon the employee’s situation, he or she can claim more than one basis when filing an EEO complaint. The second of the two elements that help define the nature of the conflict in a discrimination complaint is the “issue”—that is, the specific condition or event that is the subject of the complaint. Issues that employees can file complaints about include nonsexual and sexual harassment, nonselection for promotion, performance evaluations, duties that are assigned to them, and disciplinary actions (e.g., demotion, reprimand, suspension, and termination). (See app. I for a listing of categories of issues). As is true with respect to bases for complaints, an employee can raise multiple issues in a single complaint. Agencies are required by regulations (29 C.F.R. 1614.602) and the EEOC Federal Sector Complaint Processing Manual, Equal Employment Opportunity Management Directive (EEO MD)-110 to report annually to EEOC data about the bases and issues cited in complaints, along with other complaint-related statistics. EEOC compiles the data from the agencies for publication in the annual Federal Sector Report on EEO Complaints Processing and Appeals. According to the Management Directive, “The analyses of the data collected enable the EEOC to assist in refining the efficiency and effectiveness of the Federal EEO process.” This objective conforms with one of the goals contained in EEOC’s Annual Performance Plans for fiscal years 1999 and 2000. Likewise, as indicators of the nature and extent of workplace conflict, these data could be important to EEOC as it carries out its broader mission, which, as stated in the agency’s Strategic Plan, “is to promote equal opportunity in employment by enforcing the federal civil rights employment laws through administrative and judicial actions, and education and technical assistance.” In assessing why the data collected and reported by EEOC were not helpful in answering fundamental questions about the nature and extent of conflict in the federal workplace, we examined several sources. We reviewed instructions for EEOC Form 462, Annual Federal Equal Employment Opportunity Statistical Report of Discrimination Complaints, the form that agencies use to report complaint basis and issue data to EEOC, particularly part IV of the form, Summary of Bases and Issues in Complaints Filed (see app. I for a copy of part IV of EEOC Form 462.) We examined statistics on complaint bases and issues published in EEOC’s Federal Sector Report on EEO Complaints Processing and Appeals for fiscal years 1991 to 1997. Because postal workers accounted for about half of the discrimination complaints federal workers filed in fiscal year 1997, we obtained and analyzed forms 462 covering fiscal years 1991 to 1997 that the Postal Service submitted to EEOC in order to compare statistics for the postal workforce with the nonpostal workforce. In addition, the Postal Service provided us additional data on bases and issues generated by its complaint information system. We did not examine forms 462 for nonpostal agencies as we did for the Postal Service. Although Form 462 data that each agency submits show the number of times the different issues were raised in each basis category, EEOC does not aggregate these data from all agencies to prepare a consolidated Form 462 (part IV). At our request, EEOC prepared a consolidated Form 462 (part IV). Because EEOC does not routinely compile data this way, we requested this information only for fiscal year 1997. EEOC provided data for all federal agencies and, by subtracting Postal Service data, also provided data for nonpostal agencies. Further, we spoke with officials at EEOC and the Postal Service and representatives of the Council of Federal EEO and Civil Rights Executives. These officials provided observations about trends in the bases for and issues cited in complaints. Their comments, they said, were based on their experiences, rather than on specific studies. In addition, Council members from the Departments of Treasury and the Army provided information on how their respective agencies report complaint basis and issue data. Finally, we reviewed sections of EEOC’s Strategic Plan and its Annual Performance Plans for fiscal years 1999 and 2000 pertaining to the agency’s federal sector operations. We requested comments on a draft of this report from the Chairwoman, EEOC, and the Postmaster General. Their comments are discussed near the end of this report. We did our work from October 1998 through March 1999 in accordance with generally accepted government auditing standards. EEOC does not collect relevant data in a way that would help answer some fundamental questions about the nature and extent of workplace conflict alleged in federal employees’ discrimination complaints. Among the kinds of questions that cannot be answered are: How many individuals filed complaints? In how many complaints was each of the bases for discrimination alleged? What were the most frequently cited issues in employees’ discrimination complaints and in how many complaints was each of the issues cited? Answers to such questions would help decisionmakers and program managers understand the extent to which different categories of employees are filing complaints and the conditions or events that are causing them to allege discrimination. One fundamental question that cannot be answered is the number of individual employees who have filed complaints. EEOC does not collect data on the number of employees who file complaints, nor on how often individual employees file complaints. These numbers would be crucial to an analysis of the extent to which the increase in the number of complaints in the 1990s (see p. 1) was due to individuals filing first-time complaints or included individuals who had filed other complaints in the past. Without data on the number of complainants and the frequency of their complaints, decisionmakers do not have a clear picture of the nature and extent of alleged discrimination in the workplace and the actions that may be necessary to deal with these allegations. For example, a number of factors indicate that the increase in the number of discrimination complaints does not necessarily signify an equivalent increase in the actual number of individuals filing complainants. First, an undetermined number of federal employees have filed multiple complaints. According to EEOC and Postal Service officials and representatives of the Council of EEO and Civil Rights Executives, while they could not readily provide figures, they said it has been their experience that a small number of employees—often referred to as “repeat filers”—account for a disproportionate share of complaints. Additionally, an EEOC workgroup that reviewed the federal employee discrimination complaint process reported that the number of cases in the system was “swollen” by employees filing “spin-off complaints”—new complaints challenging the processing of existing complaints. Further, the work group found that the number of complaints was “unnecessarily multiplied” by agencies fragmenting some claims involving a number of different allegations by the same employee into separate complaints rather than consolidating these claims into one complaint. In addition, there has been an increase in the number of complaints alleging reprisal, which, for the most part, involve claims of retaliation by employees who have previously participated in the complaint process. Questions about the prevalence of bases and issues in the universe of complaints are not answerable because of the manner in which EEOC collects these data. Accurate answers to such questions are necessary to help decisionmakers and program managers discern trends in workplace conflicts, understand the sources of conflict, and plan corrective actions. These data could give managers a clearer picture of the extent to which particular groups of employees may feel aggrieved and the conditions or events that trigger their complaints. For example, managers would be able to better discern trends in the numbers of black employees alleging racial discrimination and the issues they have raised most frequently. EEOC prescribes a format for agencies to report complaint bases and issues data (see app. I). The form is a matrix that, according to EEOC instructions, requires agencies to associate the basis or bases of an individual complaint with the issue or issues raised in that complaint. However, there are problems in counting bases and issues this way. Complaints with two or more bases and/or issues can result in the same basis and/or issue being counted more than once. For example, suppose an employee specifies that race, sex, age, and disability discrimination were the bases for his or her complaint, while nonselection for promotion, a poor performance evaluation, and an assignment to noncareer-enhancing duties were the issues. In preparing the report to EEOC, the agency would record each of the three issues in the columns corresponding with each of the four bases. Table 1 illustrates how this complaint would fit into the preparation of the overall report to EEOC. The table is a matrix with excerpts of similar rows and columns that appear on the form submitted to EEOC (see app. I). To determine the number of times each basis is alleged, EEOC instructs agencies to add the number of times each issue was recorded in each column of the matrix. In this illustration, the agency would count each basis three times—once for each of the three issues recorded in each of the columns. To determine the number of times each issue is alleged, EEOC instructs agencies to add each row of the matrix. In this illustration, the agency would count each issue four times—once for each of the four bases under which they were recorded. Overall, the agency would report that 12 bases and 12 issues were alleged in this single hypothetical complaint rather than the 4 bases and 3 issues actually cited. EEOC uses these data from agencies to compile the number of times each basis and each issue was alleged governmentwide, which it publishes in the annual Federal Sector Report on EEO Complaints Processing and Appeals. The figure reported for the number of times that a particular basis was alleged, however, represents the sum of the number of times that the various issues were recorded in the column under that basis, not the actual number of complaints in which that basis was alleged. Similarly, the figure reported for the number of times that a particular issue was cited represents the sum of the number of times the issue was recorded under each of the bases, not the actual number of complaints in which that issue was cited. EEOC does not know the extent to which bases and issues may be counted more than once for the same complaint. EEOC’s Complaint Adjudication Division Director said that while the reporting procedures result in overreporting of the number of times the different bases and issues were alleged, he believes that the data provide a “fair approximation” of bases and issues included in complaints. He agreed, however, that recording data in a way that would establish the number of times the different bases and issues are cited in the universe of complaints would make sense. The way EEOC collects basis and issue data does, however, yield some insight into the importance of the different issues to the different categories of complainants. The form that each agency is to complete shows the issues raised under each basis and the number of times that a particular issue was raised. With these data, an agency manager can determine, for example, the issues that female employees alleging sex discrimination complained about and the number of times each of those issues was raised. The one essential statistic that is missing, however, is the actual number of complaints made by women alleging sex discrimination. Further, while EEOC collects information showing the extent to which specific issues are associated with specific bases at each agency, it does not aggregate this information for all federal agencies. The discrimination complaint data that EEOC has collected and reported are of questionable reliability because (1) agencies did not always report data consistently, completely, or accurately and (2) EEOC did not have procedures that ensured the data were reliable. Federal agencies take varying approaches to reporting data on complaint bases and issues to EEOC. We reviewed the Postal Service’s data submissions to EEOC, as well as the process to prepare these submissions, and found that the agency did not follow EEOC’s instructions to associate the issue or issues raised in each complaint with the basis or bases involved. For each complaint, regardless of the number of issues raised by the employee, the Postal Service identified and reported only one “primary” issue. In commenting on a draft of this report, the Postal Service’s Manager, EEO Compliance and Appeals, said that the Postal Service adopted this approach to give the data more focus by identifying the primary issues driving postal workers’ discrimination complaints. We did not review reports and reporting practices among nonpostal agencies for consistency and attention to completeness and accuracy. However, we spoke with officials from two large nonpostal agencies who indicated that they followed EEOC instructions, which, as discussed above, can result in an overcounting of bases and issues. EEOC’s Complaints Adjudication Division Director said that agencies might be using different approaches to reporting the data. However, he said that he did not know the extent to which such variation may exist because EEOC had not examined how agencies complete their reports. The issue of incomplete or inaccurate reporting of data was evident in our analysis of the data that the Postal Service reported to EEOC for fiscal years 1992 and 1995 through 1997. We analyzed Postal Service statistics because postal workers accounted for about half of the discrimination complaints filed by federal employees in fiscal year 1997. In addition to not completely reporting all issues raised in complaints, we found that the Postal Service’s statistical reports to EEOC for fiscal years 1996 and 1997 did not include data for certain categories of issues. Further, we found certain underreporting of bases for complaints and issues by the Postal Service in fiscal year 1995. Postal Service officials also told us that complaint statistics were incomplete for fiscal year 1992. Another, especially significant, reporting error we identified involved the number of race-based complaints. As a result of a computer programming error, the number of complaints reported by the Postal Service to contain allegations by white postal workers of discrimination based on race was overstated in fiscal years 1996 and 1997 by about 500 percent. After we brought these errors to the attention of Postal Service officials, they provided corrected data to us and EEOC for all errors except those relating to the fiscal year 1992 data. Postal Service officials said that because EEO-related staff had been reassigned during restructuring of the Postal Service that began in fiscal year 1992, not all complaints were properly accounted for that year. The officials also said that the computer program used to generate reports to EEOC had been modified to correct the fault in the way race-based complaints are to be counted. Errors in data reported to or by EEOC were a recurring problem in our work identifying trends in federal sector EEO complaints. In addition to the Postal Service data errors, during our prior work, we found errors for nonpostal agencies’ data. EEOC does not audit or verify the data it receives from agencies and publishes in the annual Federal Sector Report on EEO Complaints Processing and Appeals because of time considerations and staff limitations, according to the Complaints Adjudication Division Director. He said, however, that EEOC staff review agencies’ data to identify figures that appear unusual or inconsistent with other data reported. As we observed, this procedure did not ensure the reliability of the data EEOC collected and put in print. For example, in preparing the aggregated figures that it published in its federal sector report for fiscal year 1996, EEOC used the Postal Service’s vastly overstated data on racial discrimination complaints by white employees, thereby skewing the portrayal of discrimination complaint trends governmentwide. Data about the bases for complaints and the issues giving rise to them can be valuable in gauging conflict in the federal workplace. However, EEOC does not collect or report relevant agency data in a way that would help answer fundamental questions about the number of complainants and the prevalence of bases and issues in the universe of complaints. In addition, some of the data collected and reported by EEOC have lacked the necessary reliability because agencies did not report their data consistently, completely, or accurately, and because EEOC did not have procedures that ensured the data were reliable. Consequently, the data do not provide a sound basis for decisionmakers, program managers, and EEOC to understand the nature and extent of workplace conflict, develop strategies to deal with conflict, and measure the results of interventions. To help ensure that relevant and reliable data are available to decisionmakers and program managers, we recommend that the Chairwoman, EEOC, take steps to enable EEOC to collect and publish data on complaint bases and issues in a manner that would allow fundamental questions about the number of complainants and the prevalence of bases and issues in the universe of complaints to be answered, and develop procedures to help ensure that agencies report data consistently, completely, and accurately. We received comments on a draft of this report from EEOC and the Postal Service. In its written comments (see app. II), EEOC agreed that the data collected from federal agencies could be more comprehensive and accurate. EEOC said that it would expedite its efforts to revise the instructions for data collection and that it would address the concerns we raised in this report. EEOC further stated that, given the required review and approval processes, including allowing time for federal agencies to comment, it would take about 8 months to issue the changes and an additional 12 months for the agencies to report complaint data to EEOC in accordance with the new instructions. Under EEOC’s timetable, it will be several years before EEOC’s annual federal sector reports reflect the results of the agency’s efforts to revise instructions for data collection and to promote more comprehensive and reliable reporting. EEOC’s revised instructions would be issued in the beginning of fiscal year 2000, and the first complete fiscal year for which the instructions would be applicable would be fiscal year 2001. Agencies’ statistical reports for the fiscal year ending 2001 would not be submitted to EEOC until fiscal year 2002 for later publication in the Federal Sector Report on EEO Complaints Processing and Appeals. EEOC did not indicate, however, when the first federal sector report containing these data would be published. EEOC also said that that it would take action to address our concerns about data consistency, completeness, and accuracy. To deal with problems in the reliability of the data collected from agencies, EEOC said that it would urge agencies to give higher priority to the accuracy of their data. EEOC said it will ask agencies to certify the reliability of the data they provide and to explain how they ensure the quality of their data. In addition, EEOC said that if additional resources it has requested for fiscal year 2000 become available, it would be able to conduct on-site reviews to assess the reliability of agency data, more closely examine the nature of workplace disputes, and work with agencies to improve their EEO programs. We believe that the actions proposed by EEOC are generally responsive to our recommendation and would add some measure of reliability to the data it collects and reports. By urging agencies to give higher priority to data reliability, EEOC would be reiterating its current policy, as stated in Management Directive 110, that “Every effort should be made to ensure accurate recordkeeping and reporting of federal EEO data and that all data submissions are fully responsive and in compliance with information requests.” By proposing that agencies certify the reliability of the their data and explain how they ensure data quality, EEOC will be providing a mechanism for holding agencies more accountable for producing reliable and accurate data and, if followed, would have some basis to assess the extent to which an agency’s processes may ensure the data’s reliability and accuracy. An assessment of agencies’ quality control procedures and consideration of discrepancies contained in previous data submissions, among other factors, would enable EEOC to select agencies for any future on-site reviews based on the estimated risk of agencies submitting unreliable data. On April 9, 1999, the Postal Service’s Manager, EEO Compliance and Appeals, provided oral comments on a draft of this report. He said that the report, in general, accurately describes the data shortcomings and opens the door for dialogue on how data could be collected in a manner that would better serve decisionmakers. He agreed with the recommendation that data be collected on the number of complainants. In addition, he suggested that data be collected on the number of repeat filers. The official said it has been his experience that between 60 and 70 individuals account for every 100 complaints in a fiscal year. He also suggested that EEOC collect data about the race and sex of complainants along basis and issue lines. He further suggested that similar data be collected for individuals seeking counseling. The official said that the Postal Service’s complaint information system is capable of producing this kind of information because it tracks individuals by their Social Security number. For example, he said that his office has been able to provide Postal Service management with complaint data for each of the Service’s 85 districts in order to identify the extent of workplace conflicts at the different locations and the primary issues driving the conflicts. He said, however, that the issues listed on EEOC Form 462 (see app. I) need to be revised to make them more relevant to the agencies reporting to EEOC. He suggested that EEOC convene a working group of federal agency representatives to deal with this and other data issues. We believe the Postal Service official’s suggestion that EEOC develop a working group of federal agency representatives to participate in revising data collection requirements would allow stakeholders to be active partners in the development of data collection requirements that affect them. Although we did not identify all of the data that would be useful to decisionmakers and program managers, a working group would provide a forum for developing a consensus on data needs. It might be appropriate to include congressional stakeholders in any working group because of their oversight and policymaking responsibilities. It should be noted that other agencies that deal with redress and human capital issues—the Office of Personnel Management and the Merit Systems Protection Board—have working groups or panels to assist them in carrying out their missions. The Postal Service official also said it would be helpful if EEOC revised its system of collecting data to facilitate more timely collection and publication of federal sector EEO complaint data. He noted that the federal sector reports are published nearly 2 years after the fiscal year’s end. More timely data, he said, would make data more useful to decisionmakers. We agree that more timely data are more likely to be useful to decisionmakers. Although timeliness is not an issue we reviewed, we did observe what appeared to be lengthy periods before data were made available. For example, EEOC published the fiscal year 1997 Federal Sector Report on EEO Complaints Processing and Appeals on April 27, 1999, 18 months after the end of fiscal year 1997. The working group proposed by the Postal Service official could be a forum for further exploring this issue. As agreed with your offices, we plan no further distribution of this report until 30 days after its issuance, unless you publicly release its contents earlier. We will then send copies of this report to Senators Daniel K. Akaka, Thad Cochran, Joseph I. Lieberman, and Fred Thompson; and Representatives Robert E. Andrews, John A. Boehner, Dan Burton, William L. Clay, Chaka Fattah, William F. Goodling, Steny H. Hoyer, Jim Kolbe, John M. McHugh, David Obey, Harold Rogers, Joe Scarborough, Jose E. Serrano, Henry A. Waxman, and C. W. Bill Young in their capacities as Chair or Ranking Minority Members of Senate and House Committees and Subcommittees. We will also send copies to The Honorable Ida L. Castro, Chairwoman, EEOC; The Honorable William J. Henderson, Postmaster General; The Honorable Janice R. Lachance, Director, Office of Personnel Management; The Honorable Jacob Lew, Director, Office of Management and Budget; and other interested parties. We will make copies of this report available to others on request. Major contributors to this report are listed in appendix III. Please contact me on (202) 512-8676 if you or your staff have any questions concerning this report. Stephen E. Altman, Assistant Director, Federal Management and Workforce Issues Anthony P. Lofaro, Evaluator-in-Charge Gary V. Lawson, Senior Evaluator Sharon T. Hogan, Evaluator The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touch-tone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a congressional request, GAO provided information on the nature and extent of workplace conflicts that underlie the rising number of discrimination cases, focusing on: (1) the statutory bases (e.g., race, sex, or disability discrimination) under which employees filed complaints; (2) the kinds of issues (e.g., nonselection for promotion, harassment) that were cited in these complaints; and (3) why the data collected and reported by the Equal Employment Opportunity Commission (EEOC) were not helpful in answering the questions raised. GAO noted that: (1) relevant and reliable data about the bases for federal employee discrimination complaints and the specific issues giving rise to these complaints would help decisionmakers and program managers understand the nature and extent of conflict in the federal workplace; (2) these data could also be used to help plan corrective actions and measure the results of interventions; (3) however, EEOC does not collect and report data about bases and issues in a way that would help answer some fundamental questions about the nature and extent of workplace conflicts, such as: (a) how many individuals filed complaints; (b) in how many complaints each of the bases for discrimination was alleged; and (c) the most frequently cited issues in employees' discrimination complaints and in how many complaints was each of the issues cited; (4) moreover, the reliability of the data that EEOC collects from agencies and reports is questionable; (5) GAO found that agencies reported basis and issue data to EEOC in an inconsistent manner; (6) GAO also found that agencies did not report to EEOC some of the data it requested and reported some other data incorrectly; and (7) in addition, because EEOC did not have procedures that ensured the reliability of the data it collected from agencies, it published some unreliable data in its annual Federal Sector Report on Equal Employment Opportunity Complaints Processing and Appeals. |
An American man who disappeared in Iran more than six years ago had been working for the CIA in what U.S. intelligence officials describe as a rogue operation that led to a major shake-up in the spy agency.
Robert Levinson, a retired FBI agent, traveled to the Iranian island of Kish in March 2007 to investigate corruption at a time when he was discussing the renewal of a CIA contract he had held for several years. He also inquired about getting reimbursed for the Iran trip by the agency before he departed, according to former and current U.S. intelligence officials.
After he vanished, CIA officials told Congress in closed hearings as well as the FBI that Levinson did not have a current relationship with the agency and played down its ties with him. Agency officials said Levinson did not go to Iran for the CIA.
But months after Levinson’s abduction, e-mails and other documents surfaced that suggested he had gone to Iran at the direction of certain CIA analysts who had no authority to run operations overseas. That revelation prompted a major internal investigation that had wide-ranging repercussions, the officials said, speaking on the condition of anonymity.
The CIA leadership disciplined 10 employees, including three veteran analysts who were forced out of their jobs, the officials said.
This undated handout photo was provided by the family of Robert Levinson. They received it in April of 2011. (Uncredited/AP)
The agency changed the rules outlining how analysts conduct business with contractors, including academics and other subject-matter experts who don’t work at the CIA, making it harder for agency employees to have such relationships.
The CIA ultimately concluded that it was responsible for Levinson while he was in Iran and paid $2.5 million to his wife, Christine, former U.S. intelligence officials said. The agency also paid the family an additional $120,000, the cost of renewing Levinson’s contract.
Levinson’s whereabouts remain unknown. Investigators can’t even say for certain whether he’s still alive. The last proof of life came about three years ago when the Levinson family received a video of him and later pictures of him shackled and dressed in an orange jumpsuit similar to those worn by detainees at the prison at Guantanamo Bay, Cuba.
“I have been held here for 31 / 2 years,” he says in the video. “I am not in good health.”
U.S. intelligence officials concede that if he is alive, Levinson, who would be 65, probably would have told his captors about his work for the CIA, as he was likely subjected to harsh interrogation.
The National Security Council declined to comment on any ties Levinson has to the U.S. government. “The investigation into Mr. Levinson’s disappearance continues, and we all remain committed to finding him and bringing him home safely to his family,” said spokeswoman Caitlin Hayden.
In a statement released Thursday, Levinson’s family said the U.S. government has failed to make saving his life a priority. “It is time for the U.S. government to step up and take care of one of its own. After nearly 7 years, our family should not be struggling to get through each day without this wonderful, caring, man that we love so much,” the statement said.
Levinson joined the FBI’s New York Field Office in 1978 after spending six years with the Drug Enforcement Administration. He was an expert on the New York mob’s five families. Eventually, he moved to the Miami office, where he tracked Russian organized-crime figures and developed a reputation for developing sources.
While in the FBI, Levinson attended a conference where he met a well-respected CIA analyst named Anne Jablonski, one of the agency’s experts on Russia. The two formed a friendship.
When Levinson retired from the FBI in 1998, he went to work as a private investigator.
Jablonski continued at the agency and, among her other duties after the Sept. 11, 2001, attacks on the United States, was to brief FBI Director Robert S. Mueller and Attorney General John D. Ashcroft. By 2005, she was in the Office of Transnational Issues (OTI), the CIA unit that tracks money transfers, weapons smuggling and organized crime.
Jablonski brought Levinson to the CIA for discussions on money laundering with her colleagues. In 2006, Tim Sampson, then the head of the Illicit Finance Group, which was part of OTI, hired Levinson. The unclassified contract was then worth $85,000.
Academic reports
Levinson was supposed to provide academic reports but was operating more like a spy, gathering intelligence for the CIA and producing numerous well-
received reports, officials said. While working for the CIA, he passed on details about the Colombian rebels, then-President Hugo Chávez of Venezuela and Iran’s nuclear program.
Levinson hopscotched the globe. He went to Turkey and Canada, among other countries, to interview potential sources, sometimes using a fake name. But CIA station chiefs in those countries were never notified of Levinson’s activities overseas even though the agency reimbursed him for his travel, a violation of the rules.
On March 8, 2007, Levinson flew from Dubai to the Iranian island of Kish and checked into a hotel. He met with Dawud Salahuddin, a fugitive wanted for the murder of an Iranian dissident and diplomat who was shot at his house in Bethesda, Md. Levinson thought Salahuddin could supply details about the Iranian regime, perhaps ones that could interest the CIA, according to officials who have reconstructed some of his movements.
Levinson spent hours talking to Salahuddin. The next morning, he checked out of his hotel and vanished, officials said. The United States suspected the Iranian security services were behind his abduction, according to a diplomatic cable disclosed by WikiLeaks.
The U.S. government insisted that Levinson was a private citizen making a private trip. The State Department, in a cable to U.S. embassies in May 2007, said much the same thing. “Levinson was not working for the United States government,” Secretary of State Condoleezza Rice wrote.
The CIA told the Senate Intelligence Committee that Levinson had done some minor work for the agency but that his contract had run out and the spy agency had nothing to do with him going to Iran. Agency analysts also spoke with the FBI and said they hadn’t sent him to Iran. The CIA’s involvement seemed to end there. The FBI, which investigates crimes against Americans, did not push the CIA to open its files and take a deeper look at Levinson’s relationship with the agency.
But Levinson’s family and friends refused to accept that he was a lost tourist. A former federal prosecutor in Florida named David McGee, a friend of Levinson’s, and McGee’s paralegal, Sonya Dobbs, thought the government wasn’t being truthful about who employed Levinson.
Dobbs managed to access Levinson’s e-mail accounts. There she found e-mails between Jablonski and Levinson and other material suggesting that he had worked with the CIA in what appeared to be a continuing relationship.
One of the e-mails instructed Levinson not to worry about getting paid for going to Iran shortly before he made the trip. Jablonski said she would take care of it. She advised him not to contact the agency’s contract office. “Keep talk about the additional money among us girls,” she said by e-mail.
The e-mails also suggested that Levinson was operating at Jablonski’s behest, according to officials who have reviewed the communications between the two. Jablonski adamantly denied in an interview that she oversaw what Levinson was doing.
With the newly discovered information, McGee got the attention of Sen. Bill Nelson (D-Fla.), who serves on the intelligence panel and is from Levinson’s home state. At the CIA, agency investigators began to scrutinize Levinson’s relationship with Jablonski and her boss, Sampson, and discovered more problems in the handling of his work.
Instead of mailing reports to the CIA, where they would be properly screened and processed, Jablonski had Levinson send them to her house, according to officials. She said she could review them faster that way.
They used private e-mail accounts to communicate — one reason the CIA was slow to learn of the relationship. The arrangement led CIA investigators to think Jablonski was trying to obscure their ties, according to current and former U.S. officials.
Jablonski never disclosed those details and others to investigators when Levinson disappeared. While the FBI and CIA knew about Levinson’s previous contract, answers she provided “didn’t square with the e-mails,” said a former senior agency official with knowledge of the events.
To CIA officials, it appeared that she was running a source and collecting intelligence, a job for trained operatives in the clandestine service and not analysts. In fact, the CIA’s clandestine arm never knew that Levinson was on the payroll or his activities when he traveled abroad, officials said.
By 2008, the CIA’s deputy director at the time, Stephen Kappes, conceded to Nelson and other senators that there was more to the Levinson story than the agency had acknowledged the previous year. Some on the committee said they had been misled by the CIA.
Jablonski said in an interview that she wasn’t hiding anything from CIA officials and that they knew about the arrangement with Levinson. Jablonksi said she would never put Levinson, a friend, in harm’s way.
Nevertheless, Jablonski and Sampson could face criminal charges, law enforcement officials say. Both veteran analysts resigned from the CIA in 2008 along with a third senior manager. Jablonski now works in the private sector. Sampson took a job with the Department of Homeland Security. He declined to comment for this report.
He told the Associated Press: “I didn’t even know he was working on Iran. As far as I knew he was a Latin America, money-laundering and Russian-organized-crime guy. I would never have directed him to do that.”
A break in 2010
For years, Levinson’s family had no word on the fate of the former FBI agent. A break came in November 2010 when an unknown source sent the family a 54-second video of Levinson, who appeared haggard but otherwise unharmed. They are unsure who sent the video, or why. The FBI is also unsure when the video was made.
“Please help me get home,” he says in the video. “Thirty-three years of service to the United States deserves something. Please help me.”
Levinson spent only 28 years with the Drug Enforcement Administration and the FBI, suggesting that he was including his time on a CIA contract as part of his government service.
A few months later, the family received a series of pictures: Levinson, his hands chained and his hair long and unruly, dressed in an orange jumpsuit. The family received them in April 2011. The FBI determined that they were sent from Afghanistan but was unsure when they were taken.
The photographs and videos turned into a dead end. And a recent FBI media blitz and $1 million reward haven’t revealed his whereabouts. Secret FBI meetings with the Iranians in Europe also have proved fruitless, officials said.
After the video and pictures of Levinson emerged, American officials concocted a story that he was being held in Pakistan or Afghanistan in an effort to provide the Iranians some cover to release him, according to U.S. intelligence officials. Then-Secretary of State Hillary Rodham Clinton put out a statement in March 2011 that Levinson might be in southwest Asia. Officials hoped Levinson would turn up in one of those two countries and give the Iranians plausible deniability, officials said.
The ruse failed.
U.S. intelligence officials say that if there was a moment for his return, it was when they received the video. They can’t explain why Iran has freed other captives, such as a trio of U.S. hikers, but not Levinson. And other U.S. citizens being held by Iran — pastor Saeed Abedini and former Marine Amir Hekmati — are known to be alive, unlike Levinson.
The Iranians have steadfastly denied holding Levinson. Even as the relationship between the United States and Iran has thawed with the recent election of President Hassan Rouhani and a temporary deal that freezes parts of the country’s nuclear program, there has been no progress on securing Levinson or information about his fate.
“We don’t know where he is, who he is,” Rouhani told CNN in September during the United Nations General Assembly. “He is an American who has disappeared. We have no news of him.”
U.S. intelligence officials remain skeptical. They suspect Iran did snatch Levinson, but they can’t prove it. Officials surmise that only a professional intelligence service such as Iran’s Ministry of Intelligence and National Security could have taken Levinson and thwarted American efforts to find him for so many years.
U.S. intelligence officials acknowledge it’s very possible Levinson, who was in poor health, died under questioning at some point. They say there is no upside for the Iranians to admit he died in their custody.
Former officials familiar with the case said releasing the information about his CIA ties won’t make his situation any worse.
Levinson’s family refuses to believe he is dead and remains hopeful he will return home.
In November, Levinson became the longest-held hostage in U.S. history, surpassing the 2,454 days that Terry Anderson spent in captivity in Lebanon in the 1970s.
“No one would have predicted this terrible moment more than 61 / 2 years ago when Bob disappeared,” Christine Levinson said in a statement last month. “Our family will soon gather for our seventh Thanksgiving without Bob, and the pain will be almost impossible to bear. Yet, as we endure this terrible nightmare from which we cannot wake, we know that we must bear it for Bob, the most extraordinary man we have ever known.”
This article was reported beginning in 2010 while Goldman worked at the Associated Press. Goldman, whose byline also appears on an AP story on this subject, is now a Post staff writer. ||||| This undated handout photo provided by the family of Robert Levinson, shows retired-FBI agent Robert Levinson in a photo the family received in April 2011. In March 2007, Levinson flew to Kish Island,... (Associated Press)
In March 2007, retired FBI agent Robert Levinson flew to Kish Island, an Iranian resort awash with tourists, smugglers and organized crime figures. Days later, after an arranged meeting with an admitted killer, he checked out of his hotel, slipped into a taxi and vanished. For years, the U.S. has publicly described him as a private citizen who traveled to the tiny Persian Gulf island on private business.
But that was just a cover story. An Associated Press investigation reveals that Levinson was working for the CIA. In an extraordinary breach of the most basic CIA rules, a team of analysts _ with no authority to run spy operations _ paid Levinson to gather intelligence from some of the world's darkest corners. He vanished while investigating the Iranian government for the U.S.
The CIA was slow to respond to Levinson's disappearance and spent the first several months denying any involvement. When Congress eventually discovered what happened, one of the biggest scandals in recent CIA history erupted.
Behind closed doors, three veteran analysts were forced out of the agency and seven others were disciplined. The CIA paid Levinson's family $2.5 million to pre-empt a revealing lawsuit, and the agency rewrote its rules restricting how analysts can work with outsiders.
But even after the White House, FBI and State Department officials learned of Levinson's CIA ties, the official story remained unchanged.
"He's a private citizen involved in private business in Iran," the State Department said in 2007, shortly after Levinson's disappearance.
"Robert Levinson went missing during a business trip to Kish Island, Iran," the White House said last month.
Details of the unusual disappearance were described in documents obtained or reviewed by the AP, plus interviews over several years with dozens of current and former U.S. and foreign officials close to the search for Levinson. Nearly all spoke on condition of anonymity because they were not authorized to discuss the sensitive case.
The AP first confirmed Levinson's CIA ties in 2010 and continued reporting to uncover more details. It agreed three times to delay publishing the story because the U.S. government said it was pursuing promising leads to get him home.
The AP is reporting the story now because, nearly seven years after his disappearance, those efforts have repeatedly come up empty. The government has not received any sign of life in nearly three years. Top U.S. officials, meanwhile, say his captors almost certainly already know about his CIA association.
There has been no hint of Levinson's whereabouts since his family received proof-of-life photos and a video in late 2010 and early 2011. That prompted a hopeful burst of diplomacy between the United States and Iran, but as time dragged on, promising leads dried up and the trail went cold.
Some in the U.S. government believe he is dead. But in the absence of evidence either way, the government holds out hope that he is alive and the FBI says it remains committed to bringing him home.
If Levinson remains alive at age 65, he has been held captive longer than any American, longer than AP journalist Terry Anderson, who was held more than six years in Beirut. Unlike Anderson, Levinson's whereabouts and captors remain a mystery.
Today, Iran and United States tiptoe toward warmer relations and a deal over Iran's nuclear enrichment. But the U.S. has no new leads about Levinson's whereabouts, officials said. Iranian President Hassan Rouhani publicly says he has no information about Levinson's whereabouts.
Meanwhile, the story of how the married father of seven children became part of the CIA's spy war with Iran has been cloaked in secrecy, with no public accounting for the agency's mistakes.
___
A 28-year veteran of the Drug Enforcement Administration and the FBI, Robert Levinson had a natural ability to cultivate informants. Former colleagues say he was an easy conversationalist who had the patience to draw out people and win their confidence. He'd talk to anyone.
"Bob, in that sense, was fearless," said retired FBI Assistant Director Mark Mershon, who worked with Levinson in Miami in the 1980s. "He wasn't concerned about being turned down or turned away."
As the Soviet Union collapsed, Levinson turned his attention away from Mafia bosses and cocaine cartels and began watching the Russian gangsters who made their homes in Florida. Russian organized crime was a niche then and Levinson made a name as one of the few investigators who understood it.
At a Justice Department organized crime conference in Santa Fe, N.M., in the early 1990s, Levinson listened to a presentation by a CIA analyst named Anne Jablonski and spotted a kindred spirit.
Jablonski was perhaps the government's foremost expert on Russian organized crime. Former colleagues say she had an encyclopedic memory and could, at the mere mention of a crime figure, quickly explain his place in the hierarchy and his method of moving money. When White House officials had questions about Russian organized crime, they often called Jablonski directly.
In the relatively staid world of CIA analysts, Jablonski was also a quirky character, a yoga devotee who made her own cat food, a woman who skipped off to Las Vegas to renew her vows in an Elvis-themed chapel.
After the Santa Fe conference, Levinson left a note for Jablonski at her hotel and the two began exchanging thoughts on organized crime. Jablonski invited Levinson to CIA headquarters in Langley, Va., to speak to her colleagues in the Office of Russian and European Analysis.
By the time Levinson retired from the FBI in 1998, he and Jablonski were close friends. She attended his going-away party in Florida, met his family and harvested his knowledge of organized crime.
In retirement, Levinson worked as a private investigator, traveling the world and gathering information for corporate clients. Jablonski, meanwhile, thrived at the CIA. After the Sept. 11 attacks, former colleagues say, she was assigned to brief Attorney General John Ashcroft and FBI Director Robert Mueller about terrorist threats every morning.
In 2005, Jablonski moved to the Office of Transnational Issues, the CIA team that tracks threats across borders. Right away, she arranged for Levinson to speak to the money-laundering experts in the office's Illicit Finance Group.
In a sixth-floor CIA conference room, Levinson explained how to track dirty money. Unlike the analysts in the audience, Levinson came from the field. He generated his own information.
In June 2006, the head of Illicit Finance, Tim Sampson, hired Levinson on a contract with the CIA, former officials said. Like most CIA contracts, it was not a matter of public record. But it also wasn't classified.
___
At its core, the CIA is made up of two groups: operatives and analysts. Operatives collect intelligence and recruit spies. Analysts receive strands of information and weave them together, making sense of the world for Washington decision-makers.
Their responsibilities don't overlap. Operatives manage spies. Analysts don't.
Levinson was hired to work for a team of analysts. His contract, worth about $85,000, called for him to write reports for the CIA based on his travel and his expertise.
From the onset, however, he was doing something very different. He wasn't writing scholarly dissertations on the intricacies of money laundering. He was gathering intelligence, officials say.
He uncovered sensitive information about Colombian rebels. He dug up dirt on Venezuela's mercurial president. He delivered photos and documents on militant groups. And he met with sources about Iran's nuclear program, according to people who have reviewed the materials.
Levinson's production got noticed. The CIA expected he'd provide one or two items a month from his travels. Some months, former officials said, Levinson would send 20 packages including photos, computer disks and documents _ the work of a man with decades of investigative experience.
Levinson's arrangement with the CIA was odd.
The agency instructed him not to mail his packages to headquarters or email documents to government addresses, former officials said. Instead, he was told to ship his packages to Jablonski's home in Virginia. If he needed to follow up, he was instructed to contact Jablonski's personal email account.
Jablonski said the analysts simply wanted to avoid the CIA's lengthy mail screening process. As an employee, Jablonski could just drive the documents through the front gate each morning.
"I didn't think twice about it," she said in an interview.
But the normal way to speed up the process is to open a post office box or send packages by FedEx, officials say. And if Levinson were producing only unclassified analytical documents, there would have been no reason he couldn't email them to the CIA.
The whole arrangement was so peculiar that CIA investigators conducting an internal probe would later conclude it was an effort to keep top CIA officials from figuring out that the analysts were running a spying operation. Jablonski adamantly denies that.
What's more, the Illicit Finance Group didn't follow the typical routine for international travel. Before someone travels abroad for the agency, the top CIA officer in the country normally clears it. That way, if a CIA employee is arrested or creates a diplomatic incident, the agency isn't caught by surprise.
That didn't happen before Levinson's trips, former officials said. He journeyed to Panama, Turkey and Canada and was paid upon his return, people familiar with his travels said. After each trip, he submitted bills and the CIA paid him for the information and reimbursed him for his travel expenses.
Neither the analysts nor the contract officers or managers who reviewed the contract, ever flagged it as a problem that Levinson's travel might become a problem.
It would prove to be a serious problem.
Levinson was assigned a contract officer inside the agency, a young analyst named Brian O'Toole. But Jablonski was always his primary contact. Sometimes, he told her before he left for a trip. Other times, he didn't. The emails between Jablonski and Levinson, some of which the AP has seen or obtained, are circumspect. But they show that Levinson was taking his cues from her.
The more Levinson did for the agency, the more the analysts ran afoul of the CIA's most basic rules.
Before anyone can meet sources, seasoned CIA intelligence officials must review the plan to make sure the source isn't a double agent. That never happened for Levinson.
Levinson's meetings blurred the lines between his work as a private investigator and his work as a government contractor. Inside the CIA, the analysts reasoned that as long as they didn't specifically assign Levinson to meet someone, they were abiding by the rules.
On Feb. 5, 2007, Levinson emailed Jablonski and said he was gathering intelligence on Iranian corruption. He said he was developing an informant with access to the government and could arrange a meeting in Dubai or on an island nearby.
Problem was, Levinson's contract was out of money and, though the CIA was working to authorize more, it had yet to do so.
"I would like to know if I do, in fact, expend my own funds to conduct this meeting, there will be reimbursement sometime in the near future, or, if I should discontinue this, as well as any and all similar projects until renewal time in May," Levinson wrote.
There's no evidence that Jablonski ever responded to that email. And she says she has no recollection of ever receiving it.
A few days later, Levinson joined Jablonski and her husband for dinner at Harry's Tap Room in the Washington suburbs. Levinson was days away from his trip, and though he was eager to get paid for it, Jablonski says the subject never came up in conversation.
The discussion was more light-hearted, she said. She recalls scolding her overweight friend for not eating right, especially while on the road. At one point she recalls chiding him: "If I were your wife, I'd confiscate your passport."
On Feb. 12, Levinson again emailed Jablonski, saying he hadn't heard anything from the contract office. Jablonski urged him not to get the contract team involved.
"Probably best if we keep talk about the additional money among us girls _ you, me, Tim and Brian _ and not get the contracts folks involved until they've been officially notified through channels," Jablonski said, according to emails read to the AP.
Jablonski signed off: "Be safe."
Levinson said he understood. He said he'd try to make this trip as successful as previous ones. And he promised to "keep a low profile."
"I'll call you upon my return from across the pond," he said.
While Levinson was overseas, the CIA was raving about information Levinson had recent sent about Venezuela and Colombian rebels.
"You hit a home run out of the park with that stuff," she wrote. "We can't, of course, task you on anything, but let's just say it's GREAT material."
Levinson arrived in Dubai on March 3, 2007. Friends and investigators say he was investigating cigarette smuggling and also looking into Russian organized crime there.
On March 8, he boarded a short flight to Kish Island, a tourist destination about 11 miles off Iran's southern coast. Unlike the Dubai trip, this one was solely for the CIA. He was there to meet his source about Iran.
The biggest prize would be gleaning something about Iran's nuclear program, one of the CIA's most important targets.
Levinson's source on Kish was Dawud Salahuddin, an American fugitive wanted for killing a former Iranian diplomat in Maryland in 1980. In interviews with ABC News and the New Yorker, Salahuddin has admitted killing the diplomat
Since fleeing to Iran, Salahuddin had become close to some in the Iranian government, particularly to those seen as reformers and moderates.
To set up the meeting, Levinson worked with a longtime friend, retired NBC investigative reporter Ira Silverman. Silverman had talked at length with Salahuddin and, in a 2002 piece for the New Yorker magazine, portrayed him as a potential intelligence source if the U.S. could coax him out of Iran. The subtitle of the article: "He's an assassin who fled the country. Could he help Washington now?"
"I told them to put off until after the U.S. surge in Iraq was completed," Salahuddin told the National Security News Service, a Washington news site, shortly after Levinson disappeared. "But Silverman and Levinson pushed for the meeting and that's why we met in March."
Silverman's role in helping set up Levinson's meeting with Salahuddin has been previously disclosed. Silverman declined to discuss Levinson's disappearance.
Levinson's flight landed late the morning of March 8, a breezy, cloudy day. He checked into the Hotel Maryam, a few blocks off Kish's eastern beaches. Salahuddin has said he met with Levinson for hours in his hotel room.
The hotel's registry, which Levinson's wife has seen, showed him checking out on March 9, 2007.
___
Jablonski was in the office when news broke that Levinson had gone missing. She went to the bathroom and threw up.
FBI agents began asking about Levinson's disappearance and the CIA started a formal inquiry into whether anyone at the agency had sent Levinson to Iran or whether he was working for the CIA at the time.
The response from the analytical division was that, yes, Levinson had given a few presentations and had done some analytical work. But his contract was out of money. The agency had no current relationship with Levinson and there was no connection to Iran.
That's what the CIA told the FBI and Congress, according to numerous current and former FBI, CIA and congressional officials.
Jablonski never mentioned to internal investigators the many emails she'd traded with Levinson, officials close to the investigation said. When asked, she said she had no idea he was heading to Iran. She didn't tell managers or that Levinson expected to be reimbursed for the trip he was on, or that he was investigating Iranian corruption.
Jablonski says none of this was a secret; Levinson's contract and work product were available to others at the CIA, she said.
Because the emails were exchanged from her personal account, they were not available to investigators searching the CIA's computers. But had anyone at the CIA or FBI conducted even a cursory examination of Levinson's work product, it would have been immediately clear that Levinson was not acting as a mere analyst.
Had anyone read his invoices, people who have seen or been briefed on them said, investigators would have seen handwritten bills mentioning Iran and its Revolutionary Guard.
That didn't happen.
So the official story became that Levinson was in Iran on private business, either to investigate cigarette smuggling or to work on a book about Russian organized crime, which has a presence on Kish.
At the State Department, officials told the world that Levinson was a private businessman.
"At the time of his disappearance Mr. Levinson was not working for the United States government," the State Department said in a May 2007 message sent to embassies worldwide and signed by Secretary of State Condoleezza Rice.
Levinson's family feared the government had forsaken him.
The government's version would have remained the official story if not for Levinson's friends. One of them was David McGee, a former Justice Department prosecutor in Florida who had worked with Levinson when he was at the FBI. McGee, now in private practice at the Florida law firm Beggs and Lane, knew that Levinson was working for the CIA. He just couldn't prove it.
As time dragged on, McGee kept digging. Finally, he and his paralegal, Sonya Dobbs, discovered Levinson's emails with Jablonski.
They were astounded. And they finally had the proof they needed to get the government's attention.
Armed with the emails, McGee wrote to the Senate Intelligence Committee in October 2007. The CIA had indeed been involved in Levinson's trip, the letter proved.
The CIA had been caught telling Congress a story that was flatly untrue. The Intelligence Committee was furious. In particular, Levinson's senator, Bill Nelson, D-Fla., took a personal interest in the case. The committee controls the budget of the CIA, and one angry senator there can mean months of headaches for the agency.
CIA managers said their own employees had lied to them. They blamed the analysts for not coming forward sooner. But the evidence had been hiding in plain sight. The CIA didn't conduct a thorough investigation until the Senate got involved. By then, Levinson had been missing for more than eight months. Precious time had been lost.
Sampson said he was never aware of Levinson's emails with Jablonski or the Iranian trip.
"I didn't even know he was working on Iran," he said. "As far as I knew he was a Latin America, money-laundering and Russian organized crime guy. I would never have directed him to do that."
Finally, the CIA assigned its internal security team to investigate. That inquiry quickly determined that the agency was responsible for Levinson while he was in Iran, according to a former official familiar with the review. That was an important conclusion. It meant that, whatever happened to Levinson overseas, the CIA bore responsibility.
Next, a team of counterintelligence officers began unraveling the case.
The investigation renewed some longtime tensions between the CIA's operatives and analysts. The investigators felt the analysts had been running their own amateur spy operation, with disastrous results. Worse, they said the analysts withheld what they knew, allowing senior managers to testify falsely on Capitol Hill.
That led the Justice Department to investigate possible criminal charges against Jablonski and Sampson. Charges were never pursued, current and former officials said, in part because a criminal case could have revealed the whole story behind Levinson's disappearance. Officially, though, the investigation remains open.
Sampson offered to take a polygraph. Jablonski says she has consistently told the truth. Recently, as the five-year statute of limitations concluded, FBI agents interviewed her again and she told the same story, officials said.
The analysts argued that many people had seen Levinson's contract and his work product. Nobody questioned it until he went missing, they said. The way the analysts saw it, the CIA was looking for scapegoats.
"That she would even by accident put someone in harm's way is laughable," said Margaret Henoch, a former CIA officer and a close friend of Jablonski. "When I worked with Anne, and I worked very closely with her for a very long time, she was always the one who pulled me up short and made me follow procedure."
Jablonski said the CIA's relationship with Levinson was not unusual. But as part of the investigation, the CIA reviewed every analytical contract it had.
Only Levinson was meeting with sources, collecting information, and getting reimbursed for his trips, officials said. Only Levinson was mailing packages of raw information to the home of an analyst.
Despite Jablonski's denials, her emails convinced investigators that she knew Levinson was heading overseas and, with a wink and a nod, made it clear he could expect to be paid.
In May 2008, Jablonski was escorted from the building and put on administrative leave. Sampson was next. At the CIA, when you're shown the door, you leave with nothing. Security officers empty your desk, scrutinize its contents and mail you whatever doesn't belong to the agency.
Both were given the option of resigning or being fired. The next month, they resigned. Their boss was forced into retirement. At least seven others were disciplined, including employees of the contracts office that should have noticed that Levinson's invoices didn't square with his contract.
In secret Senate hearings from late 2007 through early 2008, CIA Deputy Director Stephen Kappes acknowledged that the agency had been involved in Levinson's disappearance and conceded that it hadn't been as forthcoming as it should have been, current and former officials said.
The CIA's top lawyer, John Rizzo, had to explain it all to the White House. Former Bush administration officials recall Rizzo meeting with a stunned Fred Fielding, the White House counsel who asked, since when do CIA analysts get involved in operations?
One of Rizzo's assistants, Joseph Sweeney, a lawyer, flew to Florida to apologize to Levinson's family.
The CIA paid the family about $120,000, the value of the new contract the CIA was preparing for him when he left for Iran. The government also gave the family a $2.5 million annuity, which provides tax-free income, multiple people briefed on the deal said. Neither side wanted a lawsuit that would air the secret details in public.
Jablonski now analyzes risk for companies doing business overseas.
Sampson, the former head of CIA's Illicit Finance group, quickly returned to the government, landing a job at the Department of Homeland Security's intelligence division. O'Toole, the young contracts officer, moved to the Treasury Department. He would not comment.
Inside the CIA, the biggest legacy of the Levinson case might be the strict new rules in place for analysts. Before, analysts were encouraged to build relationships with experts. An analyst could go to dinner with a professor of Middle East affairs or pick up the phone and chat with a foreign affairs expert. The 9/11 Commission encouraged CIA analysts to do even more to solicit outside views.
After the Levinson inquiry, the CIA handed down orders requiring analysts to seek approval for nearly any conversation with outsiders. The rules were intended to prevent another debacle like Levinson's, but former officials say they also chilled efforts to bring outside views into the CIA.
___
The U.S. always suspected, but could never prove, that Levinson had been picked up by Iranian security forces. What was not immediately clear, however, was whether Iran knew that Levinson was working for the CIA.
Now, nearly than seven years later, investigators believe Iranian authorities must know. Levinson wasn't trained to resist interrogation. U.S. officials could not imagine him withholding information from Iranian interrogators, who have been accused of the worst types of mental and physical abuses.
In an October 2010 interview with the AP, Mahmoud Ahmadinejad, the president of Iran at the time, said his country was willing to help find Levinson. But he appeared to suggest he knew or had suspicions that Levinson was working for the U.S. government.
"Of course if it becomes clear what his goal was, or if he was indeed on a mission, then perhaps specific assistance can be given," Ahmadinejad said. "For example, if he had plans to visit with a group or an individual or go to another country, he would be easier to trace in that instance."
As a CIA contractor, Levinson would have been a valuable chip to bargain with on the world stage. So if Iran had captured him, and knew his CIA ties, why the secrecy?
That question became even more confusing in 2009, when three U.S. hikers strayed across border from Iraq into Iran and were arrested. If Iran had captured Levinson, investigators wondered, why would it publicly accuse three hikers of espionage while keeping quiet about an actual CIA contractor?
Occasionally, Iranian defectors would claim to have seen Levinson or to have heard where he was being held, according to his family, former officials and State Department cables published by WikiLeaks.
A French doctor said Levinson was treated at his hospital in Tehran. An Iranian nurse claimed to have attended to him. One defector said he saw Levinson's name scrawled into a prison door frame. Someone sent Levinson's family what appeared to be secret Iranian court documents with his name on them.
But the U.S. could never confirm any of these accounts or corroborate the documents.
Occasionally, the family would hear from someone claiming to be the captor. Once, someone sent an email not only to the family, but also to other addresses that might have been stored on Levinson's phone. But despite efforts to try to start negotiating, the sender went silent.
The State Department continued its calls on Iran to release information about Levinson's whereabouts. Then, in November 2010, Levinson's wife Christine received an email from an unknown address. A file was attached, but it would not open.
Frantic, she sent the email to some computer savvy friends, who opened the file and held the phone to the computer. Christine Levinson immediately recognized her husband's voice.
"My beautiful, my loving, my loyal wife, Christine," he began.
The 54-second video showed Levinson sitting in front of a concrete wall, looking haggard but unharmed. He said he was running dangerously low of diabetes medicine, and he pleaded with the government to bring him home.
"Thirty-three years of service to the United States deserves something," Levinson said. "Please help me."
The video was a startling proof of life and it ignited the first promising round of diplomacy since Levinson's disappearance. U.S. officials met privately with members of the Iranian government to discuss the case. The Iranians still denied any knowledge of Levinson's whereabouts but said they were willing to help, U.S. officials said.
Some details about the video didn't add up, though. The email had been sent from a cyber cafe in Pakistan, officials said, and Pashtun wedding music played faintly in the background. The Pashtun people live primarily in Pakistan and Afghanistan, just across Iran's eastern border.
Further, the video was accompanied by a demand that the U.S. release prisoners. But officials said the United States was not holding anyone matching the names on the list.
In March 2011, after months of trying to negotiate with shadows, Secretary of State Hillary Clinton released a statement saying the U.S. had evidence that Levinson was being held "somewhere in southwest Asia." The implication was that Levinson might be in the hands of terrorist group or criminal organization somewhere in Pakistan or Afghanistan, not necessarily in Iran.
U.S. intelligence officials working the case still believed Iran was behind Levinson's disappearance, but they hoped Clinton's statement would offer a plausible alternative story if Iran wanted to release him without acknowledging it ever held him.
U.S. negotiators didn't care what the story was, as long as it ended with Levinson coming home.
The following month, the family received another email, this time from a new address, one that tracked back to Afghanistan. Photos were attached. Levinson looked far worse. His hair and beard were long and white. He wore an orange Guantanamo Bay-style jumpsuit. A chain around his neck held a sign in front of his face. Each picture bore a different message.
"Why you can not help me," was one.
Though the photos were disturbing, the U.S. government and Levinson's family saw them as a hopeful sign that whoever was holding Levinson was interested in making a deal. Then, a surprising thing happened.
Nothing.
Nobody is sure why the contact stopped. Some believe that, if Iran held him, all the government wanted was for the United States to tell the world that Levinson might not be in Iran after all. Others believe Levinson died.
Iran executes hundreds of prisoners each year, human rights groups say. Many others disappear and are presumed dead. With Levinson's history of diabetes and high blood pressure, it was also possible he died under questioning.
The discussions with Iran ended. A task force of CIA, FBI and State Department officials studied the case anew. Analysts considered alternative theories. Maybe Levinson was captured by Russian organized crime figures, smugglers or terrorists? They investigated connections between Russian and Iranian oil interests.
But each time, they came back to Iran.
For example, during one meeting between the U.S. and Iran, the Iranians said they were searching for Levinson and were conducting raids in Baluchistan, a mountainous region that includes parts of Pakistan, Iran and Afghanistan, U.S. officials said. But the U.S. ultimately concluded that there were no raids, and officials determined that the episode was a ruse by the Iranians to learn how U.S. intelligence agencies work.
Then, U.S. operatives in Afghanistan traced the hostage photos to a cellphone used to transmit them, officials said. They even tracked down the owner, but concluded he had nothing to do with sending them.
Such abrupt dead ends were indicative of a professional intelligence operation, the U.S. concluded. Whoever sent the photos and videos had made no mistakes. Mobsters and terrorists are seldom so careful.
Iran denies any knowledge of Levinson's whereabouts and says it's doing all it can.
This past June, Iran elected Hassan Rouhani as president. He has struck a more moderate tone than his predecessor, sparking hope for warmer relations between Iran and the West. But Rouhani's statements on Levinson were consistent with Ahmadinejad's.
"He is an American who has disappeared," Rouhani told CNN in September. "We have no news of him. We do not know where he is."
___
Back home in Florida, Christine Levinson works to keep her husband's name in the news and pushes the Obama administration to do more. Last year, the FBI offered a reward of $1 million for information leading to the return of her husband. But the money hasn't worked.
In their big, tight-knit family, Bob Levinson has missed many birthdays, weddings, anniversaries and grandchildren.
Levinson was always the breadwinner, the politically savvy investigator who understood national security. Now it is his wife who has traveled to Iran seeking information on her husband, who has meetings on Capitol Hill or with White House officials. They are kind and reassuring.
But nothing changes.
Others held in Iran have returned home. Not her husband.
"There isn't any pressure on Iran to resolve this," she said in January, frustrated with what she said was a lack of attention by Washington. "It's been much too long."
___
Follow Apuzzo at http://twitter.com/mattapuzzo | Robert Levinson of Florida went missing in Iran in 2007, and the Washington Post and the AP are out with stories today that might better explain why: He was working as a sort of rogue operator for the CIA at the time. Or more precisely, the retired FBI agent was working for a small team of CIA analysts who apparently didn't fill in their superiors about what they were doing, which amounted to running unauthorized spy operations overseas, according to the two stories. The AP calls it "an extraordinary breach of the most basic CIA rules." After his disappearance, CIA officials said flatly that Levinson wasn't working for the agency, but Levinson's family uncovered emails between him and a CIA analyst named Anne Jablonksi, with whom he was friends. In one sent before his Iran trip, he asked about getting paid, and she told him to deal with her, not the CIA's contract office. “Keep talk about the additional money among us girls," she wrote. Jablonski has since left the agency and could face criminal charges, says the Post. As for Levinson, now 65, the last proof that he was alive came nearly three years ago. The best guess is that Iran is either holding him or knows where he is. The AP says it has held the story three times in recent years, but is publishing now because efforts to free Levinson have gone nowhere. It adds that his CIA affiliation is surely old news to his captors. |
In 1994, six Members of Congress expressed concern about a White House official’s use of a military helicopter to visit Camp David and a golf course on May 24, 1994. Accordingly, we were asked to determine (1) the frequency of helicopter flights by White House staff from January 21, 1993, to May 24, 1994, and (2) whether applicable White House procedures were followed in requesting and approving the May 24 trip to Camp David and the golf course. Since 1976, the Marine Corps HMX-1 Squadron in Quantico, Virginia, has been responsible for providing helicopter support to the White House. The squadron is specifically tasked to fly the President, Vice President, First Lady, wife of the Vice President, and visiting Heads of State. White House staff may be authorized to use HMX-1 helicopters when they are directly supporting the President, Vice President, First Lady, and wife of the Vice President or conducting immediate White House activities. Manual records of flights taken by, or in support of, the President, Vice President, First Lady, wife of the Vice President, or Heads of State, are maintained at the squadron’s Quantico facilities. According to HMX-1 manual records, approximately 1,200 flights were flown in support of the President, Vice President, First Lady, wife of the Vice President, and Heads of State during the 16 months before May 24, 1994. These records indicated that, as previously disclosed by the White House, staff members flew in military helicopters 14 times without the President, Vice President, First Lady, wife of the Vice President, or Heads of State during this period. We performed several tests, which I will discuss, to verify the completeness and accuracy of the HMX-1 manual records. Our work did not identify any additional White House staff flights. We reviewed approximately 1,200 manual records (HMX-1 after-action reports) of flights by or in support of the President, Vice President, First Lady, wife of the Vice President, and Heads of State. The after-action report, which is filed by the pilot, identifies the passengers, an itinerary, and the flight crew and is retained by the HMX-1 White House Liaison Office in Quantico. Among the after-action reports we examined were the 14 flights previously reported by the White House as the only flights taken by White House staff when the President, Vice President, First Lady, wife of the Vice President, or Heads of State were not on board. According to officials from the White House Military Office and the HMX-1 Squadron and an associate counsel to the President, the after-action reports we reviewed covered all White House-related flights between January 21, 1993, and May 24, 1994. We performed four tests to independently verify the completeness and accuracy of the manual records maintained by the HMX-1 Squadron. As our first test, we compared the President’s itinerary, as reported in the Weekly Compilation of Presidential Documents, with HMX-1 after-action reports. We then listed instances in which the President had traveled, but no after-action reports existed. A White House official then provided us documents from the Presidential Diarist and the Secret Service. These documents verified that the President had used other forms of transportation on the days in question. Next, we compared the records maintained at HMX-1 with the flight records in the Navy’s automated Naval Flight Record Subsystem. This database is part of a larger automated flight record system used to track and manage all naval aircraft flights. The database is maintained by the Navy and the Marine Corps and contains flight information provided by pilots after each flight. The automated data we obtained covered 6,120 flights of HMX-1 aircraft from January 21, 1993, to May 24, 1994. We found the records maintained at HMX-1 to be more complete than those maintained in the database. Third, during our review of the previously reported 14 White House staff flights, we found that 10 had a squadron-specific mission purpose code. According to a Marine Corps official, pilots are to assign this HMX-1 squadron-specific mission purpose code to all flights for logistical support of an executive aircraft, as well as any flight by White House staff that is not directly associated with a flight taken by the President, Vice President, First Lady, wife of the Vice President, or Heads of State. We searched the automated database for all flights with this specific code and found 72 more flights. Of the 72 flights, 34 were included in the records we had reviewed at HMX-1. The remaining 38 flights had no after-action reports. Because it was unclear whether after-action reports should have been completed for the 38 flights, we asked for clarification. We ultimately confirmed why the 38 flights had not been included in the flight records we reviewed at the HMX-1 Squadron. Some flights with no after-action reports included flights to and from contractors for maintenance, flights to test facilities, and support for presidential travel. As one last check that the squadron had not inadvertently omitted a flight from the after-action reports we had reviewed, we interviewed 52 pilots still assigned to the squadron who had flown a White House mission during the 16-month period of our review. In the presence of officials from the White House and the HMX-1 Squadron, we asked the pilots if they had ever flown a White House mission without filing an after-action report. All the pilots said that they always filed after-action reports when they flew missions in support of the White House. At the time of the May 24 trip to Camp David and a golf course, White House policy required that White House Military Office officials approve all HMX-1 helicopter travel by White House staff. The former Deputy Director of the White House Military Office stated that he had approved the use of an HMX-1 helicopter for the May 24 trip. However, no written procedures detailed how such flights were requested or approved. White House Military Office officials told us that the infrequency of helicopter use by the White House staff made written policies and procedures unnecessary; each request had to be considered on an individual basis. The former Deputy Director also told us that the request and approval for helicopter service for the May 24 trip, like most requests for helicopter service, were made orally. Shortly after the May 24 trip, the White House changed the approval authority for staff’s use of military aircraft. According to a May 31, 1994, memorandum, the approval authority was elevated from the level of the Deputy Director of the White House Military Office to the White House Chief of Staff or the Deputy Chief of Staff. For trips that involve the Chief of Staff, the approving authority is now either the White House Counsel or the Deputy White House Counsel. Now let me turn to the issue of senior-level officials traveling on government aircraft. Approximately 500 fixed-wing airplanes and 100 helicopters are used for DOD’s OSA mission, which includes transporting senior-level officials in support of command, installation, or management functions. The Secretary of Defense has designated some DOD senior-level travelers as required use travelers (1) because of their continuous requirement for secure communications, (2) for security, or (3) for responsive transportation to satisfy exceptional scheduling requirements. However, the military department secretaries may apply more stringent restrictions in determining which four-star officers within their respective departments must use these aircraft. DOD policy excludes some aircraft, such as those assigned to the Air Force 89th Military Airlift Wing, from the OSA mission. The 89th Wing provides worldwide airlift support for the President, Vice President, and other high-level officials in the U.S. and foreign governments. The Office of Management and Budget has made the General Services Administration (GSA) responsible for managing civilian agencies’ aircraft programs. DOD, like the civilian agencies, is required to report data to GSA semiannually on senior-level, civilian officials’ travel. DOD’s policy states that the OSA inventory of fixed-wing aircraft should be based solely on wartime requirements. During our review, however, we found that each service had established its own wartime requirements based on differing definitions and methodologies. As of April 1995, the services reported 520 fixed-wing aircraft in DOD’s OSA inventory. Our review showed that only 48 OSA aircraft were used in theater during the Persian Gulf War, which is less than 10 percent of the April 1995 OSA inventory. In 1994, the Air Force determined that its OSA inventory exceeded its wartime requirements, whereas the Army, Navy, and Marine Corps determined that their OSA inventories were slightly less than wartime requirements. However, a February 1993 report on Roles, Missions, and Functions issued by the Chairman of the Joint Chiefs of Staff and the May 1995 report of the Commission on Roles and Missions of the Armed Forces indicated that the existing number of aircraft dedicated to OSA missions had been and continued to be excessive. To correct this problem, we recommended in our June report that the Secretary of Defense (1) provide uniform guidance to the services concerning how to compute OSA wartime requirements, (2) develop the appropriate mechanisms to ensure the availability of each service’s aircraft to help fulfill the OSA needs of the other services, and (3) reassign or otherwise dispose of excess OSA aircraft. Additionally, in our September report on the 1996 DOD operation and maintenance budget, we recommended that Congress direct the Air Force to reduce its OSA inventory to its wartime requirements, which would save $18.1 million in operation and maintenance costs. To address the recommendations in our June report, the Joint Chiefs of Staff studied OSA wartime requirements across DOD, including how the availability of each service’s aircraft could help fill the needs of the other services. The resulting October 1995 report established a joint requirement for 391 OSA aircraft and developed a common methodology for determining OSA requirements. The Chairman submitted the report later in October to the Deputy Secretary of Defense, requesting his approval for the OSA fleet to be sized at 391 aircraft, which would mean a reduction of over 100 aircraft. The disposition of excess OSA aircraft is currently under review. Further, DOD plans to update its policy on OSA to formalize the definition, use, and management of OSA aircraft. Plans are also underway to assign to the Joint Chiefs of Staff responsibility for determining DOD’s annual OSA requirements. Adverse publicity and increased congressional concern about potential abuses resulted in a number of statements during 1994 by the White House and the Secretary of Defense emphasizing the need for senior officials to carefully consider the use of commercial transportation instead of government aircraft. On May 9, 1995, the Deputy Secretary of Defense issued a revised policy memorandum that eliminates an entire category of “required mission use” for justifying individual OSA flights and requires that many more OSA flights be justified based on a cost comparison between DOD’s OSA aircraft and commercial carriers. Our review indicated that from March 1993 to February 1995, the number of senior-level officials’ OSA flights generally declined. During that period, the number of senior officials’ OSA flight segments per month ranged from a high of about 1,800 in March 1993 to a low of about 1,000. We found that 16 of the 20 destinations most frequently traveled to by senior-level DOD officials were also served by commercial airlines with government contracts. For example, 1,619 flight segments from Andrews Air Force Base, Maryland, to Wright-Patterson Air Force Base, Ohio, could have been served by government-contract airlines. It should be recognized, however, that some of the trips we identified were made by those senior-level officials required to use government aircraft and that the contract flights may not have provided the same scheduling flexibility made possible by government-owned aircraft. On October 1, 1995, the Deputy Secretary of Defense issued a new policy on travel that should help decrease the potential for abuse. The new policy (1) requires the services to use the smallest and most cost-effective mission-capable aircraft available; (2) requires the Secretary of Defense’s or the military department secretary’s approval for use of military aircraft by required use officials for permanent change-of-station moves;(3) prohibits the scheduling of training flights strictly to accommodate senior-level officials’ travel; (4) allows the military department secretaries to further restrict the required use designation for four-star officers in their respective departments; and (5) limits the use of helicopters for senior-level officials’ travel. Although senior-level officials’ use of helicopters in the Washington, D.C., area declined substantially between April 1994 and March 1995, these officials continued to use helicopters to travel between nearby locations. For both the Air Force and the Army, the most frequently traveled helicopter route was between Andrews Air Force Base and the Pentagon, a distance of about 15 miles. According to an Army memorandum, flying time for an Army UH-1H from Andrews Air Force Base to the Pentagon is about 24 minutes—at a cost of about $185. The same flight in an Air Force UH-1N would cost approximately $308. However, actual cost to the government would be higher because all trips are round trips. In the case of the Army, the cost to get a helicopter to the Pentagon or Andrews Air Force Base must be included, which would increase the flight time to about 1 hour and the cost to about $460. We estimate that the same trip would cost about $9 by car and about $30 by taxi. Thus, for general comparison purposes, a trip between Andrews Air Force Base and the Pentagon on either an Army or Air Force helicopter would cost over $400 more than the same trip by car. In December 1994, the Secretary of the Army established a new policy prohibiting Army officials’ use of helicopter transportation between the Pentagon and Andrews Air Force Base except in unusual circumstances. The memorandum stated that the existence of unusual circumstances would be determined by the Secretary of the Army or the Chief of Staff of the Army. In our report, we recommended that the Department of Defense adopt this policy. The October 1995 revisions to DOD’s policy on the use of government aircraft and air travel include a section on helicopter travel. The new policy states that “rotary wing aircraft may be used only when cost favorable as compared to ground transportation, or when the use of ground transportation would have a significant adverse impact on the ability of the senior official to effectively accomplish the purpose of the travel.” We believe that this change in policy should result in fewer helicopter trips between the Pentagon and Andrews Air Force Base, as well as other nearby destinations. At the time of our June report, civilian agencies had over 1,500 aircraft that cost about $1 billion a year to operate. The civilian agency inventory includes many different types of aircraft, such as helicopters, special-purpose aircraft for fire-fighting and meteorological research, and specially configured aircraft for research and development and program support. However, only 19 are routinely used for senior-level officials’ travel. These 19 aircraft cost about $24 million a year to operate. The operating costs reflect aircraft that are owned, leased, lease/purchased, and loaned between civilian agencies. For most agencies, the operating costs include those related to technical, mission-critical aircraft that are not used for administrative purposes. We also reviewed the National Aeronautics and Space Administration and Coast Guard senior officials’ use of aircraft and found that, although the use of such aircraft was infrequent, when these aircraft are used, many of the destinations were served by commercial airlines with government contracts. Inspector General reports indicate that agencies were not adequately justifying the need for aircraft acquisitions and that agencies’ cost comparisons with commercial service were not complete or accurate. Mr. Chairman, this concludes my prepared statement. I would be happy to respond to any questions that you or other members of the Subcommittee may have. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | GAO discussed the use of military helicopters and other government aircraft to transport White House staff and senior-level military and civilian officials. GAO noted that: (1) White House staff members had flown in military helicopters 14 times from January 21, 1993 to May 24, 1994 without the accompaniment of the President, Vice President, First Lady, Vice-President's wife, or Heads of State; (2) Department of Defense (DOD) policy states that the military services' operational support airlift (OSA) inventory of fixed-wing aircraft should be based strictly on wartime requirements, but DOD has not provided guidance on how the services should count their OSA aircraft or determine their wartime requirements; (3) the April 1995 OSA inventory of 520 fixed wing aircraft exceeds the Air Force's wartime requirements; (4) the military helicopters located in the Washington, D.C. area are not justified based on OSA wartime requirements; (5) the most frequent flight for DOD senior officials is to or from Andrews Air Force Base, MD; (6) in response to GAO recommendations, the Joint Chiefs of Staff has recommended a reduction in the number of OSA aircraft and DOD has strengthened the policy governing the use of OSA aircraft by senior-level travelers; and (7) only 19 of 1,500 aircraft operated by civilian agencies are used to routinely transport senior-level officials. |
Charlotte Mayor Patrick Cannon was arrested Wednesday on public corruption charges, with the FBI alleging he took tens of thousands of dollars in bribes including $20,000 in cash delivered in a briefcase last month to the mayors office where he also solicited $1 million more.
Cannon resigned Wednesday evening. He was arrested that morning at a SouthPark apartment used by undercover FBI agents after the mayor turned up expecting another payment, sources say.
The case against the former mayor alleges that in return for money, trips, hotel rooms and access to a luxury SouthPark apartment, Cannon promised to help agents posing as potential commercial investors with zoning, parking and other city-related issues.
According to officials, Cannon turned himself in to federal marshals after learning of a warrant for his arrest. He was immediately taken before U.S. Magistrate Judge David Keesler of Charlotte.
Cannon was charged with theft and bribery after the FBI sting operation, said Anne Tompkins, U.S. Attorney for the Western District of North Carolina. He was released on $25,000 unsecured bond, pending indictment, which could come as early as next week. The court file shows Charlotte attorney James Ferguson is representing Cannon. Ferguson did not return a phone call Wednesday afternoon.
If convicted on all charges, the 47-year-old faces up to 50 years in prison and $1.5 million in fines. The case is part of an ongoing investigation, according to the U.S. Attorneys office.
Cannon was the longest-serving elected official in Charlotte, having joined the city council in 1993. He is the regions highest-ranking official to be charged in a corruption case since former N.C. House speaker Jim Black of Matthews, also a Democrat, pleaded guilty in 2007.
Cannons arrest follows a four-year investigation, which stretched from a Las Vegas resort to the mayors office on the 15th floor of the Government Center, which Cannon has occupied for only five months.
Authorities said Cannon took bribes from undercover FBI agents five times the most recent on Feb. 21 when he collected $20,000 in cash in the mayors office.
Tompkins said undercover agents showered Cannon with more than $48,000 in cash, airline tickets, a trip to Las Vegas, and use of a luxury SouthPark apartment in exchange for the use of his official position, Tompkins said.
FBI agents searched the mayors office, his home at Cumnor Lane and his offices at E-Z Parking Inc. at 312 West Trade St. They seized financial records, phones, computers and other electronic devices. They were also searching for a leather briefcase that agents say they stuffed with cash for the February visit to the mayors office.
Cannon made a brief court appearance Wednesday at the federal courthouse in uptown where he was told, among other things, that he could not be in possession of firearms.
Cannon declined to comment when approached by a WCNC-TV reporter as he left the building. At this point, theres nothing to respond to, Cannon said.
Fanning the cash
The federal investigation began in 2010. Originally, the FBI focused on other Charlotte targets but focused on Cannon in 2011, according to an affidavit from Eric Davis, an FBI special agent who specializes in public corruption cases.
At the time the probe began, Cannon was a city council member and mayor pro tem.
An undercover agent passed himself off as a business manager for a venture capital company based in Chicago. According to the affidavit, he met Cannon in November 2010, telling the city council member he and his investors were interested in opening a nightclub and bar in Charlotte.
Ultimately, the agent chose a property in uptown that had parking problems and required zoning changes. In subsequent meetings, Cannon described his relationship and influence over certain city departments and employees, including the zoning board.
On a Dec. 12, 2012, Cannon met an undercover agent at Capitol Grille, an upscale steakhouse on North Tryon Street and the same restaurant where Black was accused of accepting bribes from a group of chiropractors years earlier.
Cannon asked the undercover agent if hed be interested in investing in a business Cannon planned to start called HERS, which would sell a feminine hygiene product nationally. The agent agreed to give Cannon a $12,500 zero-percent return on investment loan in return for his assistance in getting approval for the zoning needed for the nightclub.
But Cannon said he needed $40,000. I can do something for around $12,500. Any ideas how I can close the gap and get me some of that capital to get me started to pull this thing in?
In exchange for the money, the agent asked Cannon to make sure I dont run into any problems, the affidavit said.
Cannon replied: I will definitely help you out. So you just want me to help you out on that front?
At a Jan. 17, 2013, meeting in SouthPark, the undercover agent gave Cannon the $12,500 in cash by putting it on a coffee table in front of him. Cannon, according to the affidavit, looked nervously toward a window and covered the money with a folder.
After the agent closed the blinds, Cannon put the bills to his ear and fanned them.
Thats not how I flow
In a later conversation with the undercover agent, Cannon tried to characterize his acceptance of the money as a business investment unrelated to his public office, the affidavit says.
In laying out his philosophy as a public official, Cannon told the agent that he would have helped him even without the $12,500. Im not one of those Chicago- or Detroit-type folk. Thats not how I flow.
In an ironic aside during that same meeting, Cannon said that he looked good in an orange necktie, but not in an orange suit.
Agents said they gave Cannon ample opportunity to return the money, but he never did.
When Cannon announced his candidacy for mayor on May 21, 2013, he invited the undercover agent to attend, the affidavit says.
That month, the city council approved a streetcar line to west Charlotte. Weeks later, a second undercover agent approached Cannon and said his company was interested in investing along the streetcars path. He told Cannon he needed his help persuading potential investors, and hed fly Cannon to Las Vegas to do it.
Las Vegas: Lies for cash
As part of a trip with the agent, Cannon agreed to create the false impression with the investors that Cannon had had a long relationship with the undercover agents, the affidavit says.
In June, during discussions before the trip, Cannon raised the question of how he would be compensated for his role. When the agent replied, I want to take care of you on this, Cannon immediately suggested a contribution to his ongoing mayoral campaign. But the agent refused to pay Cannon before they took the trip. Cannon, according to affidavit, continued to press for the money up front.
In the end, the agent flew Cannon and his wife to Las Vegas on July 1 and paid for hotel room. He also gave Cannon $1,000 in cash at the hotel.
During the subsequent meeting, four FBI agents posing as businessmen promised to invest up to $25 million each for commercial property along the streetcar line.
Again, Cannon boasted of his ability and willingness to make things happen. Being around for 20 years has helped me a little bit, I think. Ive gone through probably four police chiefs, five city managers, three mayors, something like that.
Asked by one of the investors how long and often Cannon could assist with the project, Cannon replied: As long as Im elected.
A second Vegas payoff
Afterward, the second undercover agent had a private meeting with Cannon. The affidavit says they reached Cannons wife, Trenna, by speakerphone, and she personally thanked the agent for the $1,000 from the day before. After the call, the agent paid Cannon another $5,000 in cash for his presentation to the investors. Cannon put the envelope containing the bills in the breast pocket of his suit.
Then Cannon asked whether he could work with the second agent on some private deals, the affidavit says. Your value to us, obviously, is the position that youre in and that you can pick up the phone and make things happen for us that, from our perspective, is absolutely invaluable Theres no reason why it cant be a win-win relationship for both of us, the agent told him.
After returning to Charlotte, Cannon met with an undercover agent in a SouthPark apartment rented by the FBI for $2,100 a month and equipped with hidden cameras. Agents gave Cannon an additional $10,000 for his work in Las Vegas.
Throughout the investigation, authorities said, Cannon had asked for keys or access to the apartment. The agent told Cannon that he was about to drop the lease on the apartment but would continue to pay rent if Cannon wanted to use it. When Cannon got his own his key, he told the agent excitedly, Aw man!
Payoff in February
On Feb. 21 this year, an undercover agent brought one of the phony Las Vegas investors to Cannons office in the Government Center. During that meeting, the affidavit says, Cannon received a leather Fossil briefcase containing $20,000 in cash. Then, Cannon asked for substantially more.
I told Trenna she has a point, Cannon told the agents.
She has what? the agent responded.
A point, one percent, Cannon replied.
According to the affidavit, Cannon was asking for a 1 percent payoff from the potential $125 million project, or $1.25 million in all.
Then the mayor and the agent grappled for the best way to get the $20,000 out of the office. Since the briefcase had passed through security when the agent arrived, they talked about how it would be best if he took it out, and perhaps meet near the airport for the hand-off. In the end, the briefcase stayed in Cannons office, the affidavit says.
I just got to be conscious about that kind of stuff here, Cannon said.
Cannon had scheduled a meeting about the payments for Wednesday with the agent, according to the affidavit.
Trial likely
On the morning of his arrest Wednesday, Cannon spent about an hour on the phone with Gov. Pat McCrory, himself a former Charlotte mayor, to discuss the citys airport, according to McCrory.
Cannon then drove to SouthPark, where federal agents were waiting, a source confirmed.
If Cannon is indicted next week as expected, prominent Charlotte defense attorney Jim Cooney says he expects the case to go to trial.
If he takes a felony or pleads guilty, its over for him. Everything he has always worked for is lost, Cooney said.
If Cannon alleges entrapment by the FBI, Cooney said his attorneys face a difficult legal task.
Youve got to show that you wouldnt have done it otherwise, Cooney said. Here, the issue is, how did you target him to begin with? Was he having financial problems? Did you know that? Were you playing to a weakness? The defense attorney may argue that he tried to give some of the money back.
In the end, it depends on what the jury feels about what the government has done. Did they catch a felon, Cooney said, or take an otherwise law-abiding person and convince him to commit a crime that he normally wouldnt have committed.
If convicted, Cooney and other Charlotte attorneys expect the former mayor to spend a significant amount of time in prison.
I know very few judges who consider a conviction like this anything else than a very, very serious matter, Cooney said.
April Bethea, Kathleen Purvis, Ames Alexander and Gary Schwab contributed to this report. ||||| The new Charlotte mayor, Patrick Cannon, gave his victory speech Tuesday night with his family by his side.
READ our latest story on the criminal charges against Patrick Cannon.
A major political scandal unraveled in Charlotte Wednesday as Patrick Cannon resigned as Charlotte’s mayor after federal investigators arrested him on bribery and corruption charges.
Documents outline how agents said the mayor abused his power for years.
Cannon submitted his resignation letter to City Manager Ron Carlee and the city's attorney, making his resignation effective immediately.
In it he said, "In light of the charges that have been brought against me, it is my judgment that the pendency of these charges will create too much of a distraction for the business of the city to go forward smoothly and without distraction… I regret that I have to take this action, but I believe that it is in the best interest of the city for me to do so."
DOCUMENT: Patrick Cannon's resignation letter
Cannon began his time in office back in 1993, serving as councilman for District 3.
From 2001 to 2005 and 2010 to 2013 he served on the council as mayor pro tem.
It will now be up to the city council to name an interim mayor, but they have not said how soon that will happen.
It's a process they went through last July when Anthony Foxx resigned to become the U.S. transportation secretary.
The council appointed Patsy Kinsey as interim mayor until Cannon was elected.
WATCH: Patrick Cannon's first 100 days as mayor
The mayor pro tem takes on the mayor's duties in his absence at council meetings, according to state law.
On any given day the city manager and council run the city so Charlotte still has leadership.
Cannon was released from jail on $25,000 bond.
Charlotte Mayor Patrick Cannon was arrested Wednesday by FBI agents for alleged violations of federal public corruption laws, announced Anne M. Tompkins, U.S. attorney for the Western District of North Carolina.
The federal criminal complaint filed in U.S. District Court charged Cannon, 47, with theft and bribery concerning programs receiving federal funds, honest services wire fraud and extortion under color of official right.
WATCH: Charlotte City Council makes statement on Cannon's arrest
According to allegations contained in the charging document and the affidavit filed in support of the criminal complaint, during the course of a separate criminal investigation, the FBI received reliable information that Cannon was potentially involved in illegal activities associated with his position as an elected official, and began an undercover investigation in or about August 2010.
SPECIAL SECTION: Charlotte's Mayor Patrick Cannon
The complaint and affidavit allege that during the course of that investigation, Cannon solicited and accepted money bribes and things of value from undercover FBI agents, posing as commercial real estate developers and investors wishing to do business in Charlotte. As alleged in the filed documents, Cannon solicited and accepted such bribes and things of value in exchange for the use of his official position as Charlotte Mayor, Mayor Pro Tem and/or as a City Council Member.
WATCH: Mayor Cannon speaks during his 2013 campaign
The complaint and law enforcement affidavit allege that Cannon accepted the bribes from the undercover FBI agents on five separate occasions. On the last occasion, on Feb. 21 Cannon allegedly accepted $20,000 in cash in the mayor’s office. According to the complaint and the affidavit, between January 2013 and February 2014, Cannon allegedly accepted from the undercover agents over $48,000 in cash, airline tickets, a hotel room and use of a luxury apartment in exchange for the use of his official position.
READ past coverage of Mayor Cannon
Cannon had his initial appearance in court Wednesday and has been released on bond, pending indictment. The charge of theft and bribery concerning programs receiving federal funds carries a statutory maximum sentence of 10 years in prison and a $250,000 fine; the charge of honest services wire fraud carries a statutory maximum sentence of not more than 20 years in prison and a $1 million fine; and the charge of extortion under color of official right carries a statutory maximum sentence of not more than 20 years in prison and a $250,000 fine.
The charges contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
WATCH: Cannon speaks to Channel 9 during Charlotte's Next Mayor special in October
The case is being prosecuted by Assistant U.S. Attorney Michael E. Savage of the U.S. Attorney’s Office for the Western District of North Carolina. The case is being investigated by the Federal Bureau of Investigation.
Gov. Pat McCrory released the following statement today after learning of the arrest of Cannon:
"I am both saddened and angered because I have known Patrick and his family for over 30 years, but more than anything, my heart is broken for the City of Charlotte," McCrory stated. "This is not the city that I know, served and love. This alleged behavior is inexcusable and cannot be tolerated."
Edwin Peacock III, who ran against Cannon for mayor, released the following statement after learning of Cannon's arrest:
"The people of Charlotte deserve nothing but the highest ethical behavior from our elected officials. The public trust has been shattered and must now be restored."
To read more reaction from local groups and officials, click here.
Legal analyst provides more perspective on Cannon’s arrest
Channel 9 reached out to a legal analyst for more perspective on Cannon’s arrest and case.
The analyst said there’s a possibility that agents used video and audio recordings -- even marked money in an effort to bring these charges against Cannon. Read more by clicking here.
CEO of local organization says it's too soon to sever ties with mayor
Mayor Patrick Cannon has been a mentor for several organizations in the city of Charlotte.
Channel 9 spoke to one organization's CEOs about Wednesday’s developments.
She said she hopes the news doesn't overshadow the good work Big Brothers and Big Sisters does in the community. Read more by clicking here.
Mentoring group former mayor participated in reacts to accusation
Patrick Cannon's rise from public housing to public office was a success story often touted by Men Who Care Global.
The organization works to provide positive role models and mentors to young African-American men and boys. Executive Director Victor Earl said he never imagined Cannon's journey would include the possibility of time in the penitentiary. Read more by clicking here. ||||| CHARLOTTE, N.C. (AP) — Less than six months on the job, the mayor of Charlotte was arrested and accused Wednesday of accepting more than $48,000 in bribes from FBI agents posing as real estate developers who wanted to do business with North Carolina's largest city.
Mayor Patrick Cannon, a 47-year-old Democrat, faces theft and bribery charges, U.S. Attorney Anne Tompkins said. Cannon was accused of soliciting and accepting more than $48,000 in cash, airline tickets, a hotel room and the use of a luxury apartment as bribes.
If convicted on all the charges, he faces 20 years in prison and more than $1 million in fines.
Cannon, a radio host and the owner of a parking management company, was elected mayor in November, replacing Anthony Foxx, who was named Transportation Secretary by President Barack Obama.
Telephone messages left for Cannon were not immediately returned Wednesday afternoon.
FBI agents posing as commercial real estate developers paid Cannon on five separate occasions between January 2013 and February 2014, according to the complaint. Cannon accepted cash in exchange for access to city officials responsible for planning, zoning and permitting.
On the last occasion, Cannon was accused of accepting $20,000 in cash in the mayor's office, the complaint said.
The investigation began in August 2010, when Cannon still held an at-large seat on the Charlotte City Council.
Cannon was first elected to City Council in 1993. He is also longtime radio show host who discusses local and national politics. In November, he defeated Republican challenger Edwin Peacock.
Cannon was also accused of accepting $12,500 from an undercover agent to help him develop a feminine hygiene product called "Hers" to be marketed and sold in the United States. In exchange, Cannon offered to help the undercover agent — posing as a business manager for a venture capital company — get the necessary permits to open a nightclub.
During the meeting, an undercover agent told Cannon: "You know, again whatever you can do to get our application moved up towards the top, uh, business license and things like that, that we need."
According to the complaint, Cannon responded: "Yeah, not a problem."
Cannon later had a discussion with the undercover agent, apparently attempting to clarify to the mayor that the money was strictly seed money for the "Hers" product and not payment for his help in opening the nightclub. Cannon ended the conversation by saying he looked good "in an orange necktie, but not an orange suit," according to the complaint.
When the agent set up two later meetings to discuss the money and give Cannon an opportunity to return it, Cannon failed to show up, the complaint said.
During his campaign, Cannon promoted plans to create jobs in a city of 760,000 people that has become one of the nation's leading banking and energy centers.
Big banks helped drive Charlotte's explosive growth over the past two decades. The city is home to Bank of America Corp., one of the nation's largest banks by assets.
But the city's financial institutions were hurt in the nation's banking meltdown. Since 2008, Charlotte has lost thousands of good-paying financial services jobs. | The FBI thinks the mayor of Charlotte, NC, is a crook. Federal prosecutors today charged Patrick Cannon 47, with taking bribes after a four-year investigation, reports the Charlotte Observer. Cannon allegedly accepted about $50,000 in cash, airline tickets, and use of a luxury apartment from undercover FBI agents posing as real estate developers, reports WSOC-TV. That includes a $20,000 payment made right in the mayor's office last month, say the feds. Cannon has been mayor only five months, but the investigation goes back to his days on the City Council. He is accused of taking five separate payments since January 2013 and using his influence to set up meetings between the "developers" and key city officials. The AP highlights one back-and-forth noted by the FBI, which followed the exchange of $12,500: Undercover agent: "You know, again whatever you can do to get our application moved up towards the top, uh, business license and things like that, that we need." Cannon: "Yeah, not a problem." If convicted on all the corruption charges, Cannon faces 20 years in prison and $1 million in fines. He was released on bond today following a court appearance. |
Yoan Valat / Christophe Karaba / EPA A combo photograph showing a picture taken in Paris, 18 August 2013, of French President Francois Hollande, left, and a picture taken in Cannes, 18 May 2011, of French actress Julie Gayet.
The esteem reserved for the right to privacy in France is perhaps best expressed by an old French proverb: “In order to live happily, live hidden.” For generations, this was more than a cheeky excuse for the French to keep their dirty secrets. It was more like a national philosophy, part of a culture that elevated infidelity to an element of style. But in the Internet age, that philosophy has begun to seem a bit naïve, as national traditions of tact and good taste tend to get steamrolled these days by the universal laws of curiosity. France is no longer an exception.
On Friday, French President Francois Hollande learned that the hard way after a gossip magazine published evidence of his affair with a movie actress named Julie Gayet. The report went viral with all the merciless speed of the Web, making Hollande’s chest-thumping demands for privacy seem about as quaint as a Parisian organ grinder with a monkey on his shoulder.
Technically, though, French law was on his side. Legal restrictions on snooping in France are some of the harshest in the world, imposing major fines and even a possible jail term on newspaper editors who expose the private lives of citizens. As the scandal spread, Hollande invoked those laws on Friday by threatening to sue the French magazine Closer for invading his privacy. “A terrible mistake,” says Yair Cohen, a lawyer whose London-based firm, Cohen Davis Solicitors, specializes in stopping the viral spread of defamatory information.
Even a few years ago, Cohen says, it would have been possible to get a court judgement that would apply pressure on newspapers and other traditional outlets, forcing them to pull stories that were harmful to a politician’s reputation. “Now it is pretty much impossible,” he says. The work of spreading information has shifted mostly to blogs and social networks—“websites that are beyond the jurisdiction of the courts,” says Cohen.
For France, the clearest lesson on this score came in 2012, when Closer published topless photos of Kate Middleton, the Duchess of Cambridge, holidaying at a French château. Using local privacy laws to stem the spread of those photos proved pointless, even counter-productive, as it only drew more attention to them online, says Cohen. “The palace at the time didn’t realize that things have moved on, that there is nothing to be gained from threatening to sue.”
The other milestone for privacy and politics in France was the previous presidency of Nicolas Sarkozy, whose divorce with his second wife and subsequent marriage with a third, the singer and fashion model Carla Bruni, played out like a soap opera in the French media in 2007 and 2008. “That really opened the flood gates,” says Anne-Elisabeth Moutet, a political commentator in Paris and the former editor of a French tabloid. Before Sarkozy, “there was a sort of gentleman’s code most of the time not to publish politician’s private affairs, and then Sarkozy put his own private life on the stage,” says Moutet.
So when Hollande tried to turn back the tide on Friday by claiming the right to privacy, he got little sympathy from the curious public. Not that he had much of it to lose. With the economy in the pits, Hollande’s approval ratings are the lowest of any President in modern French history, sinking in a recent poll to just 15%. But when Closer conducted its own survey on Friday, 78% out of nearly 32,000 respondents said that the news of his affair could only harm his credibility further.
That was a far cry from the France of Jacques Chirac, the former President (1995-2007) whose numerous affairs only seemed to improve his standing among the public; the same was true for François Mitterrand, President of France from 1981-1995. Perhaps if Hollande had some of Chirac’s famous swagger, or indeed his popularity, he may have come out of this affair on top. “But that ship has sailed,” says Moutet. “In the age of Twitter and Facebook, French politicians are going to be like politicians in every Western country now.” So much for living hidden.
(VIDEO: Francois Hollande Threatens To Sue Over Affair Claims) ||||| Image copyright AFP Image caption Mr Hollande's alleged affair with the actress Julie Gayet risks overshadowing a key political announcement
French President Francois Hollande is coming under pressure to clarify his personal situation, after Closer magazine reported on his alleged secret affair with the actress Julie Gayet.
The president is making a key policy announcement on Tuesday amid fears it may be overshadowed by the allegations.
One French paper said the report was "catastrophic" in every way for him.
Mr Hollande said the publication was an "attack on the right to privacy". He said he might sue, but did not deny it.
'Back of a scooter'
The French have a history of presidents with complicated private lives
A major press conference next week was intended to be a platform for the president to launch his economic programme for the year ahead - detailing a much-anticipated new tack in efforts to spur growth and create jobs.
But the BBC's Hugh Schofield, in Paris, says the president may be forced into making some kind of official statement on his personal position in order to clear the ground.
President Hollande might like to think his love life is a private affair but now that it is out in the public domain, he needs to explain how things stand our correspondent says.
Key questions include whether he is indeed in a relationship with the actress Julie Gayet, and if so what of his recognised partner Valerie Trierweiler, who lives with him at the Elysee palace. and who is scheduled to accompany him on an official visit to the US next month.
Closer's article, which describes Mr Hollande riding across Paris on the back of a scooter to see his alleged lover, could ruin the president's year, French papers warned on Saturday.
Image copyright Reuters Image caption The president's official partner is the journalist Valerie Trierweiler who lives with him at the Elysee palace
"Having to explain, a few minutes before sketching out his vision for France, instead, what he has in mind for his relationship [with Trierweiler] promises to be a highly interesting performance," the Sud-Ouest newspaper wrote.
L'Alsace newspaper described the allegations as "catastrophic in every possible way for Francois Hollande".
Meanwhile, L'Est Republicain said in an editorial that Tuesday's announcement was "expected to mark a political resurgence by confirming the social-democratic shift" the president hinted at in a New Year address, but that "all eyes will now be on the president's reaction".
President Hollande, who took office in May 2012, has seen public support slipping recently. One poll in November gave him just 15% support, the lowest for any president in the past 50 years. ||||| PARIS — The photographs show a stout man of middling height striding out of an ordinary-looking Parisian apartment house, a helmet and a dark visor obscuring his face. He gets on a motorized scooter and zooms away into the Eighth Arrondissement.
The face behind the visor, a glossy tabloid magazine called Closer reported on Friday, belongs to President François Hollande of France. The apartment, a short distance from the Élysée Palace, is used for his meetings with an actress 18 years younger than he is, who is not his primary partner, the magazine said.
Revelations of that sort typically do not shock the French people, and this one is no different. But Mr. Hollande, while not denying the report, lashed out at the magazine for violating what he has sought to define as his privacy rights, suggesting that the French president, like any citizen, is entitled to assignations.
Mr. Hollande “profoundly deplores the violations of the respect of private life, to which he has the right, like any citizen,” his office said in a statement. He condemned the magazine, and said he was weighing action, including through the courts, to defend his privacy.
In an era of mass violations of personal privacy, including widespread mining of French phone data revealed by Edward J. Snowden, the former National Security Agency contractor, Mr. Hollande’s appeal for confidentiality appears to have resonated in the country. Moreover, Mr. Hollande, who has abysmally low poll ratings largely because of his handling of the sclerotic French economy, is unlikely to suffer a further backlash from voters over reports of an affair, which rarely generate the sort of public moralizing in France that they do in the United States.
But the relationship, assuming the report is correct, suggests the continuance of a rather complicated love life for Mr. Hollande, 59, one that at times has directly intersected with his public roles and has amounted to a new challenge to the French presumption that the private lives of public figures are no one’s business.
Mr. Hollande, who has never married, was involved for many years with Ségolène Royal, a former presidential candidate for his Socialist Party. The two have four children together. He strongly supported her unsuccessful presidential campaign in 2007, and they appeared together as a couple throughout the race before splitting publicly immediately afterward.
More recently, he has been in a relationship with Valérie Trierweiler, a journalist for the magazine Paris Match who has acted as France’s first lady since Mr. Hollande’s election in 2012. Their relationship began while Ms. Trierweiler was covering Mr. Hollande for the magazine. Ms. Royal and Ms. Trierweiler had engaged in a highly public rivalry that was made particularly plain when, on Twitter, Ms. Trierweiler supported a candidate running in a legislative election against Ms. Royal, who had received the backing of Mr. Hollande. That incident caused a minor political scandal, and Ms. Trierweiler’s Twitter activity has been somewhat less adventuresome since.
Closer, a weekly tabloid that in 2012 drew the ire of the British royal family for publishing topless pictures of the Duchess of Cambridge, the former Kate Middleton, published an article and a collection of photos on Friday that it said documented Mr. Hollande’s meetings with the actress, Julie Gayet, 41.
The photos appear to show Mr. Hollande and his security detail coming and going by motorcycle on several occasions from the apartment. Ms. Gayet can be seen entering the same building. The photos show a man said to be Mr. Hollande — the man was always photographed wearing a helmet with a full visor — arriving at the building. In one photo, a man in an overcoat with his helmet on is shown as he leaves the building. Mr. Hollande and Ms. Gayet are not shown together.
Rumors of a relationship between the two had circulated for months in Paris, and last year Ms. Gayet went so far as to seek a court injunction to make them stop. On Friday, Closer said it would remove the photos from its website in response to a request from Ms. Gayet.
Ms. Trierweiler made no public comment on the report, and the status of her relationship with Mr. Hollande remained unclear.
Ms. Gayet, who has two children and is said to be separated from her husband, an Argentine film director, has mostly acted in independent films and has played mainly secondary roles, as well as producing some of her own movies. She has played a drug addict, a blind woman, a lesbian and a hairdresser, and in articles about her films she has been praised by directors for her professionalism and artistic choices. She was an active supporter of Mr. Hollande during his presidential campaign.
Speaking Friday morning on Europe 1 radio, Laurence Pieau, the top editor at Closer, called Mr. Hollande a “normal president” and “a normal person.”
“He’s a president who’s fallen in love,” Ms. Pieau said. “We really need to undramatize these images.”
The reaction of French people, many of whom said they had already heard the rumor before the magazine’s report, was much the same as Ms. Pieau’s.
Julie Lechevalier, 32, a legal specialist at a technology company, saw it as perhaps not laudable behavior, but hardly something to be condemned.
“This shows our president is a normal man,” she said, adding that even if she did not approve morally, Mr. Hollande has “the right to live his life even if he is president of the republic.”
The love lives of public officials were long considered off limits for French journalists, some of whom, like Ms. Trierweiler, have become involved with politicians. Several recent presidents have been widely rumored to have had affairs that the news media have avoided publicizing.
A century ago, President Félix Faure expired in the presidential palace at age 58 while engaging in some extramarital sport with a young woman. (Newspapers at the time did not make explicit the circumstances of his death, but one suggested with a wink that Mr. Faure had been “sacrificed to Venus,” the Roman goddess of love.)
Now, a combination of factors, including the Internet and the very public soap opera around former President Nicolas Sarkozy’s divorce and subsequent marriage to a model-turned-singer, Carla Bruni, has changed the news media’s appetite for intimate glimpses into the lives of powerful men.
The first significant shift in the news media’s approach came in 1994, when Paris Match published photos of President François Mitterrand with Mazarine Pingeot, his daughter from a long-running affair. Ms. Pingeot’s existence had been kept hidden from the public but was an open secret among French journalists.
The 2011 arrest on sexual assault charges of Dominique Strauss-Kahn, then the head of the International Monetary Fund, exposed the potential dangers of the news media’s silence. The legal case against him and subsequent accounts from other women forced a debate about the French news media’s deference to powerful figures over sex.
However, the debate died down, and the question of how much the news media should say about private lives has not been resolved.
In interviews, several people said they were comfortable having Mr. Hollande keep his romantic liaison out of public view.
A financial officer at an industrial company, Alexandre Pasquier, 33, said: “The split between private life and public life is very important to me,” adding, “This does not involve a political problem.”
Mr. Pasquier said that although he did not approve of infidelity “on a moral plane,” Mr. Hollande’s apparent affair would not affect either the president’s ability to run the country or the French population’s view of him.
“It’s not going to stain his image,” he said. “He has so many other things going badly, this won’t hurt him. It could even maybe give him a boost.” | French President Francoise Hollande gives an important speech on Tuesday in which he's supposed to lay out his economic vision, but he just got a very unwanted distraction. The French magazine Closer revealed yesterday that the 59-year-old was having an affair with 41-year-old actress Julie Gayet, reports the BBC. Hollande didn't deny it, but he said he “profoundly deplores the violations of the respect of private life, to which he has the right, like any citizen," and he hinted at legal action. For the record, Hollande has never married, but France has a de facto first lady in girlfriend Valerie Trierweiler, who is not to be confused with Hollande's previous long-term partner, Segolene Royal. So how is France reacting? Pick your favorite narrative: New York Times: "In an era of mass violations of personal privacy, including widespread mining of French phone data revealed by Edward J. Snowden, the former National Security Agency contractor, Mr. Hollande’s appeal for confidentiality appears to have resonated in the country." Time: "So when Hollande tried to turn back the tide on Friday by claiming the right to privacy, he got little sympathy from the curious public." Hollande makes an official visit to the US next month, and as of now, Trierweiler is scheduled to accompany him. |
USDA relies on telecommunications systems and services to help it administer federal programs and serve millions of constituents. From telephone calls to video conference meetings to providing nationwide customer access to information, USDA reports that it spends about $219 million annually for a wide array of telecommunications technology.Voice and data communications, provided by the federal government’s FTS 2000 program, and hundreds of commercial carrier networks help the department’s 31 departmental offices and agencies and thousands of field offices carry out USDA’s broad missions and serve customer needs. In 1995 and 1996, we reported that USDA was not cost-effectively managing and planning its substantial telecommunications investments and was wasting millions of dollars each year as a result. Specifically, we found that USDA was paying for unnecessary or unused telecommunications equipment and services because of breakdowns in management controls. For example, we found that USDA had been paying tens of thousands of dollars annually for leased telecommunications equipment, such as rotary telephones and outdated computer modems, that it no longer even had. USDA was wasting as much as $5 million to $10 million annually because the department had not acted on opportunities to consolidate and optimize its FTS 2000 telecommunications services. USDA agencies were spending hundreds of millions of dollars developing redundant networks that perpetuate long-standing information sharing problems because the department was not adequately planning departmentwide telecommunications in support of USDA’s information sharing goals. USDA had hundreds of cases of telephone abuse because the department lacked adequate controls over the millions of dollars it spends each year on commercial telephone services. Many of these cases involved inappropriate collect calls made from individuals in 18 correctional institutions, accepted and paid for by USDA, and then possibly transferred to other USDA long-distance lines. We made numerous recommendations in our reports to help USDA correct these problems. Given the seriousness of these management weaknesses and the waste we found, we also recommended in 1995 that the Secretary of Agriculture report the department’s management of telecommunications as a material internal control weakness under the Federal Managers’ Financial Integrity Act (FMFIA). Under federal law, government agencies are required to properly and cost-effectively manage all information technology investments, including telecommunications. To do this, agencies must have processes and practices established that ensure sound planning and information technology decision-making, and cost-effective management and use of information technology investments. To further strengthen executive leadership in the management of information technology, the Congress enacted the Clinger-Cohen Act of 1996, which created a chief information officer (CIO) position in federal agencies and emphasized the need for instituting sound management practices to maximize the return on information technology investments. In August 1996, the Secretary of Agriculture established a CIO position and in August 1997 designated the Deputy Assistant Secretary for Administration as USDA’s first CIO. The CIO, who reports to the Secretary, is responsible for providing the leadership and oversight necessary to ensure the effective design, acquisition, maintenance, use, and disposal of all information technology by USDA agencies, which include telecommunications, and for monitoring the performance of USDA’s information technology programs and activities. To address our objective, we reviewed agency documentation and interviewed USDA officials to identify the department’s actions to address our recommendations to (1) establish sound telecommunications management practices, (2) consolidate and optimize FTS 2000 telecommunications services for savings, (3) plan networks in support of information and resource sharing needs, and (4) correct telephone abuse and fraud. To assess the adequacy of these corrective actions, we reviewed plans, studies, activity reports, and other documentation at USDA headquarters, USDA’s National Finance Center (NFC), and agency offices and discussed the status and progress of actions taken with USDA officials. We also reviewed studies as well as vendor billing information for FTS 2000 and commercial services to evaluate the results of USDA’s corrective actions. Appendix I provides further details on our objective, scope, and methodology. We conducted our review from August 1997 through April 1998 in accordance with generally accepted government auditing standards. We provided a draft copy of this report to USDA for comment. USDA’s comments are discussed in the report and are included in full in appendix II. In 1995, we reported that USDA lacked sound management practices over its large annual telecommunications investments and was not cost-effectively managing these investments. Because of this, the department wasted millions of dollars each year paying for unnecessary or unused telecommunications services and equipment, and services billed but never provided. We therefore recommended that USDA should report its management of telecommunications resources as a material internal control weakness under the Federal Managers’ Financial Integrity Act (FMFIA) and take immediate and necessary steps to ensure that all telecommunications resources are properly managed and costs are effectively controlled. USDA agreed that it has to do a significantly better job managing its telecommunications investments. It reported telecommunications management as a material management control weakness in its fiscal year 1996 and fiscal year 1997 FMFIA reports, and began improvement initiatives to reengineer telecommunications management, audit telephone invoices, establish telecommunications inventories, and strengthen departmentwide policy. By implementing improvements such as reengineering telecommunications management, the department reported in November 1997 that its telecommunications costs could be reduced as much as $30 million annually. However, to date, USDA has not fully implemented the revised and improved management practices. As a result, it has neither achieved significant savings nor substantially strengthened telecommunications management. Under the Federal Managers’ Financial Integrity Act of 1982 (31 U.S.C. 3512), agencies must establish internal controls to reasonably ensure that agency assets are effectively controlled and accounted for. Agencies must also annually report material weaknesses in these controls to the President and the Congress and describe plans and schedules for correcting these weaknesses. Given the lack of sound management practices over telecommunications and the serious management weaknesses we found at USDA, we recommended in our 1995 report that the Secretary of Agriculture report the department’s management of telecommunications as a material internal control weakness under FMFIA. We also recommended that this weakness should remain outstanding until USDA institutes effective management controls. In response to our recommendations, USDA reported its overall management of telecommunications as a material management control weakness in its fiscal year 1996 FMFIA report. Specifically, the report generally discussed corrective actions planned or underway to address (1) inadequate telecommunications management and network planning, (2) opportunities to consolidate and optimize telecommunications services for savings, and (3) telephone abuse. In USDA’s FMFIA report for fiscal year 1997, the department continued to report telecommunications management and network planning and the management of telecommunications services as material weaknesses, stating that estimated completion dates to resolve these weaknesses have been delayed. Specifically, the report states that USDA extended the expected completion date 1 year for resolving its telecommunications management and network planning weaknesses, from fiscal year 1998 to fiscal year 1999, and 2 years for addressing opportunities to consolidate and optimize telecommunications services for savings, from fiscal year 1998 to fiscal year 2000. “The processes of planning, acquiring, ordering, billing, invoicing, inventory control, payments, and management of telecommunications services and equipment chaotic at best and totally out of control at the very least. These processes are disparately performed across agencies and even within agencies. The capability to plan, review, and capitalize on USDA telecommunications investments is far beyond the reach of any USDA manager to make rational decisions based on hard inventory and billing facts. Agency managers who are responsible for telecommunications services have neither the information they need to manage these resources nor the billing/invoice information to ensure that USDA is receiving the services it ordered and for which it is being billed. The systems/processes are outdated and broken.” The task force recommended a series of critical and essential actions to begin to address these problems. It identified business process reengineering of telecommunications management activities across the department as the most critical action for fundamentally improving the processes and systems supporting telecommunications management. The activity included, among other things, redesigning approaches for obtaining and reviewing billing information through electronic data interchange (EDI) and creating management processes that (1) reduce payments made for services not received and equipment not owned, (2) promote increased resource sharing between agencies, and (3) provide accurate and timely reports to agency managers for monitoring the cost-effective use of all telecommunications resources. Later in February 1996, the Deputy Assistant Secretary for Administration and the acting CFO accepted the task force’s recommendation to complete a telecommunications reengineering study within 6 months, and pilot test and implement reengineered telecommunications management processes throughout the department within 24 months. USDA has reported that it expects to correct its most serious management weaknesses through this effort and, at the same time, save up to $30 million annually by streamlining administration of telephone bills and validating agency payments made to telephone companies to eliminate unnecessary charges for services, lines, and features that are not in use. However, USDA did not complete its reengineering study until August 1997 and does not expect to have its reengineered telecommunications management processes fully implemented before September 1999, at the earliest, which is 3-1/2 years after USDA accepted the task force’s recommendations. Much of this delay occurred because USDA’s reengineering effort, although critical, lacked effective direction and oversight. For example, it took USDA nearly 4 months (from February 1996 to June 1996) to form a project team for the reengineering study. Project officials said further delays resulted from the lack of clear direction over project activities. This was because management responsibility for the work on the study was split among the Deputy Assistant Secretary for Administration and acting CFO and an executive review board made up of program and management officials. Concurrent with the reengineering effort, USDA began additional initiatives to address other management improvement and cost-savings recommendations we made. For example, because USDA agencies do not generally review commercial telephone bills to verify charges, we reported that the department was paying tens of thousands of dollars for leased telecommunications equipment and other services it had not used for years. We therefore recommended that USDA review commercial telephone bills for accounts over 3 years old to identify instances where the department may be paying for services that are no longer being used. Following the Secretary’s direction, in May 1996, USDA’s acting CFO and NFC began a one-time audit of all commercial telephone invoices. To do this, copies of all billing invoices paid to telephone companies for a 1-month period in 1996 were sent by NFC to USDA agencies for verification. The audit involved the review of over 25,000 paper invoices. Agencies and offices were asked to identify duplicate services, unnecessary services, and services billed but not received. As of March 1998, the audit was about 90 percent complete and had identified about $470,000 in annual savings. USDA expects to recoup the overall cost of this audit from the savings achieved during the first year. Opportunities to save millions more were also identified when it was disclosed that USDA agencies were paying tens of thousands of dollars each month for thousands of unused FTS 2000 e-mail boxes. As a result, more than half of USDA’s 15,953 FTS 2000 e-mail accounts were disconnected, reducing USDA’s telecommunications costs by about $3.3 million. In one case, for example, we were told that the Secretary’s office found it had been paying monthly storage charges for an FTS 2000 e-mail box for a former Secretary who had left the department in 1993. Efforts to identify and eliminate additional unused e-mail accounts are continuing. In 1995, we reported that USDA and its agencies lacked basic information describing what telecommunications equipment and services USDA uses and what it pays for these resources because telecommunications inventories had not been established by the department. As we pointed out in our report, inventories are fundamental to sound telecommunications management and are necessary, among other things, to identify telecommunications resources that are outdated or no longer used and ensure that agencies pay for only those services that they use. Consequently, we recommended that the department take immediate steps to ensure that departmentwide telecommunications inventories were established and properly maintained. In response to our report, the CIO’s office began work with a contractor to help the department establish telecommunications inventories. As part of this effort, the contractor (1) prepared a plan for conducting inventories departmentwide and (2) initiated a pilot project to conduct a physical inventory of telecommunications equipment at six sites for two USDA agencies in the Washington, D.C., area. At just these six sites, the contractor found the USDA offices were being billed more than $200,000 annually for inactive lines, active lines not in use, and lines that could not be identified. However, the department did not implement the contractor’s plan and did not act to ensure that all unneeded or unused services were eliminated. Although the contractor’s plan was not implemented, USDA has taken other actions to begin collecting inventory information. Specifically, in connection with efforts now underway to test USDA’s reengineered telecommunications management processes and address Year 2000 readiness, the CIO’s office told USDA agencies to have their telecommunications inventories completed by July 1998. Until USDA establishes inventories and fully tests and implements improved telecommunications management processes departmentwide, USDA cannot ensure that unnecessary or unused services have been discontinued. In 1995, we also recommended that USDA establish and implement procedures necessary to ensure that all unneeded telecommunications services are terminated at offices that close or relocate. Since passage of the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994, USDA has closed or relocated about 1,300 field offices and plans to close or relocate hundreds more in the next few years. Effective procedures are essential to precluding payments for services at offices after they have been closed or relocated. While the CIO’s office revised the department’s telecommunications policy in March 1996 to require USDA agencies and offices to ensure the termination of telecommunications services at offices that close or relocate, CIO officials said that they did not monitor agencies’ compliance with this policy. Accordingly, USDA does not know whether the policy had been implemented throughout the department. Telecommunications managers at two USDA agencies we spoke with said that they had not done reviews of billing records to ensure that telecommunications services were terminated for all of their offices that had closed or relocated. In fact, cases have been identified by USDA in which the department continued to incur service charges at agency offices that had closed or relocated. For example, one USDA agency told us that the department continued to pay a total of about $90,000 for vendor-provided services for an office in Florida that had been closed since 1984. After identifying this case, the agency telecommunications manager terminated the service in October 1997 and sought reimbursement from the vendor for some of these charges. In 1995, we also reported that USDA was missing millions of dollars in savings because the department had not consolidated and optimized FTS 2000 telecommunications services where there were opportunities to do so. Such savings opportunities existed because, over the years, hundreds of field office sites across the department had obtained and continued to use separate, and often times redundant, telecommunications services at office sites where multiple USDA agencies are located within the same building or geographic area. Therefore, we recommended that USDA identify and act on opportunities to consolidate and optimize FTS 2000 telecommunications services and preclude departmental agencies and offices from obtaining and using redundant services. USDA agreed with our recommendation and began a departmentwide initiative, called Initiative 6, that used a network analysis tool to identify instances in which USDA agencies and offices located in the same building could consolidate and optimize FTS 2000 telecommunications services for savings. By November 1995, USDA agencies and offices had been provided with 775 specific opportunities to eliminate FTS 2000 redundant services. USDA eliminated about $3.2 million in redundant FTS 2000 services under this effort but took no action on nearly half of the Initiative 6 cost-savings opportunities and terminated the initiative. The CIO’s office later reactivated Initiative 6 after we began our review and, once again, identified additional opportunities for savings. However, CIO officials told us that they were not actively following up on these because new priorities, such as the need for USDA agencies to ensure Year 2000 compliance, were consuming most of the agencies’ information technology staff resources. USDA also began tracking agency purchases of FTS 2000 services. As part of the department’s moratorium on information technology investments, established by the Deputy Secretary in November 1996, the CIO’s office began reviewing individual agency requests for new telecommunications services and equipment to help ensure that opportunities to share resources among agencies and offices are considered before telecommunications services are acquired. The CIO’s office also created a new centralized management structure for ordering FTS 2000 telecommunications services to help eliminate agency purchases of redundant services. Under these new procedures, which are still being implemented, USDA has reduced the number of individuals throughout the department who are authorized to purchase new telecommunications services and equipment by about 77 percent from 332 to 75 and has required agencies to forecast their planned telecommunications purchases in advance to identify opportunities for savings. In September 1995, we reported that USDA had hundreds of stovepipe networks and systems, built by its agencies, that hinder information sharing. This situation evolved over time because USDA allowed its agencies to build their own separate stovepipe networks. Even though the department had often acknowledged that it had a pressing need to overcome this problem, we found that USDA agencies continued to spend hundreds of millions of dollars to develop redundant networks that could not interoperate and could not share information. We recommended in 1995 that USDA determine the interagency information sharing requirements necessary to effectively carry out the department’s crosscutting programs and plan networks in support of information and resource sharing needs. Despite some initial efforts to develop a draft information systems technology architecture, USDA has not yet identified business data needs and information sharing requirements for the department. The Clinger-Cohen Act of 1996 requires agency CIOs to develop, maintain, and facilitate integrated information systems architectures for evolving or maintaining existing information technology and acquiring new information technology to achieve the agency’s strategic goals and information resources management goals. An effective systems architecture should be derived by systematically and thoroughly analyzing and defining agencies’ target operating environments, including business functions, information needs and flows across functions, and system characteristics required to support these information needs and flows. However, according to a contractor’s January 1998 assessment, USDA’s initial architecture does not identify many of the kinds and/or types of data used in the department and does not provide a clear foundation for a seamless flow of information and interoperability among all agency systems that produce, use, and exchange information. According to the CIO’s office, work is still underway to capture data on information flows and needs and this work will not be completed until September 1999. Concurrent with this ongoing work to identify data requirements, the CIO’s office has begun evaluating USDA’s current network structure. As a first step, the CIO’s office used a contractor’s network design tool to identify or map, for the first time, the department’s existing data networks so that redundancies may be eliminated and economies may be gained. When this work is complete in June 1998, project officials said the CIO will begin considering design alternatives for migrating to a departmentwide enterprise network that is intended to satisfy the connectivity needs of USDA information technology systems, processes, and users. However, USDA does not plan to have completed its work identifying business data and information sharing requirements by that time. USDA officials stated that while the department does not now and may never fully understand its business requirements, it can nonetheless design its new departmentwide enterprise network. By moving forward on an enterprise network without completing an architecture that defines USDA’s business data and information sharing requirements, USDA runs the risk of investing in a network that may not fully support its strategic business/program and operational needs. As we have reported in the past, agencies have experienced significant problems and cost increases by trying to design and build information and network systems without a systems architecture that defines business needs. For example, we found that incompatibilities among air traffic control systems cost the Federal Aviation Administration (FAA) $38 million to fix because it began building these systems without completing a systems architecture that defined requirements and standards governing information and data structures and communications. In another case, after the Internal Revenue Service (IRS) spent $3 billion attempting to modernize its tax systems without adequately defining its business needs in a systems architecture, it was unable to demonstrate benefits commensurate with these costs and had to restructure its modernization effort. In April 1996, we reported that USDA lacked adequate controls for ensuring that its telephones were properly used. As a result, the department, which spends tens of millions of dollars each year on commercial telecommunications services, had experienced hundreds of cases of telephone abuse in the Washington, D.C., area and was at risk of further abuse and fraud. We recommended that USDA determine its risk of and vulnerability to telephone fraud, waste, and abuse departmentwide and develop and expeditiously implement an appropriate plan with cost-effective controls to mitigate these risks. In the interim, we recommended that the department identify and implement cost-effective actions to minimize USDA’s exposure to telephone abuse. Following our report, USDA identified telephone abuse at the department as a material management control weakness in its fiscal year 1996 FMFIA report, and took a number of positive steps to reduce telephone abuse in USDA’s Washington, D.C., headquarters offices. For example, in October 1996, USDA began blocking collect calls in all of its Washington, D.C., area offices, and the hundreds of inappropriate collect calls from individuals in correctional institutions have been significantly reduced. Also, the CIO’s office implemented procedures for obtaining and reviewing the local carrier’s monthly telephone bill for the Washington, D.C., area to identify questionable long distance calls as well as other potentially inappropriate charges. After taking these actions, USDA reported in its fiscal year 1997 FMFIA report that corrective actions on telephone abuse were completed. However, the department has not determined the risk of and vulnerability to telephone fraud, waste, and abuse departmentwide as we recommended, nor has it developed and implemented an appropriate plan with cost-effective controls to mitigate these risks. The CIO official responsible for telecommunications operations told us no further action was taken on our recommendation because USDA believed that the risks of departmentwide telephone abuse and fraud would be better addressed by implementation of the department’s reengineered telecommunications management processes, which will allow agencies and offices to review and verify telephone billing information. However, as discussed earlier, work on this project is not complete and full implementation of the reengineered processes is not expected before September 1999. Therefore, until that time, USDA agencies and offices outside of the Washington, D.C., area remain at risk for telephone abuse and fraud. Although USDA agreed with our 1995 report on the need to resolve its telecommunications management weaknesses and has identified millions in potential savings, it lacks an effective action plan for implementing these necessary improvements. Specifically, USDA has not established a plan that (1) assigns clear responsibility and accountability for initiatives intended to correct the department’s telecommunications management weaknesses, (2) coordinates and integrates these initiatives, (3) sets priorities, time frames, and milestones for their completion, (4) establishes procedures for monitoring activities to ensure they are carried out, and (5) allocates necessary resources. In December 1997, the CIO issued a plan of action for resolving the department’s long-standing problems managing information technology. This plan, which was prepared in response to the Secretary’s May 1997 request, discusses telecommunications as one of five major areas and provides a general description of the goals and objectives of ongoing initiatives to reengineer and improve departmentwide telecommunications management and lists tasks associated with these efforts. However, the plan does not adequately describe how needed corrective actions will be implemented, nor does it specify clear time frames, milestones, and resources associated with all these efforts. Specifically, while the plan lists tasks associated with the telecommunications improvement initiatives, it does not describe how USDA intends to carry out all these tasks. For example, the plan lists a project to consolidate and optimize telecommunications services in the Washington, D.C., area to provide more effective and economical telecommunications systems. But the plan provides no information describing the project’s activities and how these activities will need to be integrated with numerous other planned or ongoing efforts to consolidate and optimize services, nor does it discuss milestones, time frames, and resources necessary for carrying them out. In addition, the CIO’s action plan also does not designate a specific senior-level official with overall, day-to-day responsibility, authority, and accountability for managing and coordinating all of the department’s separate telecommunications initiatives. Instead, the plan generally assigns responsibility for tasks to the CIO’s office and other USDA agencies and offices, but does not identify responsible individuals, provide them requisite authority, and make them accountable for ensuring that these tasks are fully carried out. For example, while the CIO’s Associate Director for Telecommunications Services and Operations acknowledged having responsibility within the CIO’s office for many corrective actions, this official said she did not have the overall authority necessary to direct and coordinate departmentwide action on all telecommunications improvements and cost-savings efforts. Instead, she could only attempt to get agencies and offices to act on such efforts through a process of consensus-building. Without an action plan that establishes clear lines of responsibility, authority, and accountability for directing and implementing departmentwide telecommunications improvements, many of USDA’s corrective actions will likely not be fully implemented. After more than 2 years, USDA has not fully implemented our recommendations. It continues to miss identified opportunities to achieve the total estimated $70 million in annual savings and cannot ensure that telecommunications resources are cost-effectively managed across the department. It has undertaken some initiatives that have saved several million dollars, but these initiatives are uncoordinated, poorly managed, and do not address all of USDA’s telecommunications weaknesses. Further, USDA has not established an overall plan or strategy for directing and integrating these separate improvement efforts and for ensuring that critical corrective actions are cost-effectively and promptly implemented throughout the department. A major factor contributing to this situation is that no one at USDA has been given overall responsibility, authority, and accountability for doing so. We recommend that the Secretary of Agriculture direct that the CIO complete and implement a departmentwide corrective action plan that fully addresses all of our recommendations for resolving the department’s telecommunications management weaknesses and achieving savings wherever possible. In addition, we recommend that the Secretary, in consultation with the CIO, assign a senior-level official with day-to-day responsibility and requisite authority for planning, managing, and overseeing implementation of this plan and for ensuring that all telecommunications management improvements and cost-savings activities are effectively and fully carried out. We further recommend that the Secretary of Agriculture direct the CIO to periodically report to the Secretary on the department’s progress (1) implementing this corrective action plan and (2) achieving the estimated $70 million in annual savings identified by the department. USDA’s CIO provided written comments on June 15, 1998, on a draft of this report. USDA’s comments are summarized below and reproduced in appendix II. USDA generally agreed with our findings, conclusions and recommendations. Specifically, USDA agreed that it has not fully implemented recommendations in our previous reports aimed at resolving the department’s telecommunications management weaknesses and agreed that the department can improve by placing greater emphasis on planning and coordination of its telecommunications program. USDA also stated that the department has made real progress in telecommunications management and has achieved significant savings, but did not disagree that USDA continues to miss savings opportunities and cannot ensure that telecommunications resources are cost-effectively managed across the department. In its comments, USDA provided details on actions it is taking to address telecommunications problems we identified, but did not specifically state whether or how the department plans to implement our recommendations. In subsequent discussions with USDA, the Deputy CIO stated that the department plans to fully address and implement all our recommendations. USDA also raised several additional matters, none of which affect our conclusions and recommendations and thus are not discussed here. These matters and our responses are discussed in appendix II. As agreed with your office, unless you publicly announce the contents of this report earlier, we will not distribute it until 30 days from the date of this letter. At that time we will send copies to the Secretary of Agriculture; the Chairmen and Ranking Minority Members of the Senate Committee on Governmental Affairs, the Senate and House Committees on Appropriations, and the House Committee on Government Reform and Oversight; the Director of the Office of Management and Budget; and other interested parties. Copies will also be made available to others upon request. Please contact me at (202) 512-6408 if you or your staff have any questions concerning this report. I can also be reached by e-mail at [email protected]. Major contributors to this report are listed in appendix III. Our objective was to determine what actions USDA has taken to address the telecommunications management problems we identified in 1995 and 1996 and to what extent these problems have been resolved. To address our objective, we reviewed studies, reports, plans, and other documentation describing USDA’s actions to address our recommendations for (1) correcting telecommunications management weaknesses, (2) identifying and acting on opportunities to consolidate and optimize FTS 2000 telecommunications services, (3) planning networks in support of information and resource sharing needs, and (4) resolving telephone abuse and fraud. We also interviewed CIO, CFO, and agency officials to confirm our understanding of actions taken by the department and to identify whether the actions were complete, underway, or planned. We did not independently verify the accuracy of USDA’s overall telecommunications costs or projected cost savings. To identify USDA’s efforts to improve telecommunications management, we examined departmental responses to our report recommendations, USDA FMFIA and interagency task force reports, and reengineering and other studies. We also reviewed project plans, status reports, and other documentation pertaining to telecommunications management improvement initiatives to identify the status of these actions, and we discussed plans for completing them with CIO, agency, and project team officials who are responsible for carrying them out. We also reviewed other actions taken by USDA to address our recommendations on specific telecommunications management problem areas. To assess the effectiveness of USDA efforts to disconnect telecommunications services at closed offices, we discussed the implementation of revised policy in this area with CIO officials and reviewed procedures followed at two agencies that recently closed offices. In addition, we met with CIO, agency, and contractor officials involved with USDA’s 1996 inventory pilot and reviewed project reports and other documentation to determine the results and savings achieved. We also discussed USDA’s ongoing one-time audit and procedures used for selecting and auditing billing invoices with officials at USDA’s National Finance Center. To test the thoroughness of the audit, we randomly selected several invoices and discussed actions taken to verify billing data on these invoices with the appropriate agency officials. We also reviewed reports and billing data associated with other cost-savings efforts to eliminate unused FTS 2000 e-mail boxes and met with CIO and agency officials to discuss current and future plans for establishing telecommunications inventories. To assess efforts by USDA to consolidate and optimize FTS 2000 telecommunications services, we reviewed reports and examined billing data showing the results of USDA’s Initiative 6 project. We also discussed the overall results of this initiative with CIO and agency officials. We examined documentation and billing data associated with USDA’s recent effort to reactivate Initiative 6 and discussed the status of efforts to achieve savings with CIO and agency officials. To assess departmental requirements to preclude agencies from purchasing redundant FTS 2000 telecommunications services, we reviewed procedures established by the department under the November 1996 moratorium and new centralized management structure for ordering FTS 2000 services and discussed their impact on purchases of redundant service with CIO officials. To assess USDA’s efforts to plan integrated networks that address the department’s information and resource sharing needs, we reviewed reports showing agency network purchases. We also reviewed USDA’s information systems technology architecture and discussed it with CIO officials to determine the extent to which the architecture defines information sharing needs. Finally, we reviewed the department’s plans for implementing an enterprise network, including the interim results of a contractor’s network design evaluation of telecommunications traffic and performance, and discussed the extent to which USDA’s enterprise network plans address departmental information and resource sharing needs. To assess USDA’s efforts to address telephone abuse and fraud in the Washington, D.C., area, we reviewed status reports, internal memos, and other documentation describing actions implementing collect call blocking and establishing billing review procedures. We also discussed these actions with CIO officials who monitor telephone abuse in Washington, D.C., and reviewed documentation on the results of these monitoring efforts to determine whether USDA actions were effective in reducing improper collect calls from correctional institutions and other forms of telephone abuse. In addition, we discussed the extent to which USDA had addressed the risks of telephone abuse and fraud departmentwide with the CIO official responsible for telecommunications operations. To confirm our understanding of USDA actions to address our recommendations and resolve telecommunications management weaknesses, we discussed the results of our work with USDA’s CIO, as well as with representatives from the CIO and CFO offices. We performed our audit work from August 1997 through April 1998, in accordance with generally accepted government auditing standards. Our work was done at USDA headquarters in Washington, D.C.; USDA’s National Finance Center in New Orleans, Louisiana; and USDA Telecommunications Services and Operations offices in Fort Collins, Colorado. We also met with contractor representatives who conducted the inventory pilot in Annapolis, Maryland and we interviewed telecommunications officials at two agency offices where telecommunications and network planning activities are administered, which included the Animal and Plant Health Inspection Service headquarters in Riverdale, Maryland, and the Agricultural Research Service in Greenbelt, Maryland. The following are GAO’s comments on the Department of Agriculture’s letter dated June 15, 1998. 1. We modified the report as appropriate to more accurately reflect the agency official’s title. 2. Regarding the inventory pilot, USDA stated that the report does not mention that one agency completed a more thorough analysis of the lines and found that many of the lines identified by the contractor as not in use or inactive were in fact needed for various agency mission requirements. Therefore, USDA stated that the $200,000 in annual overbillings identified by the contractor may have been overstated. While we agree that there may have been cases where the contractor’s findings were overstated, USDA did not investigate many of the overbillings identified by the contractor to determine the total actual savings possible, nor did it act to ensure that all unneeded or unused services were eliminated. 3. Our statement is accurate. The department explains that it gained valuable experience through Initiative 6, but does not dispute the facts that USDA took no action on nearly half of the cost savings opportunities identified under Initiative 6 and that the initiative was terminated. 4. USDA agreed that it is desirable to develop an enterprise network based on a comprehensive business architecture and contends that it currently has a high-level business architecture in place that is based on USDA’s strategic plan and forms the basis for the definition of requirements for an enterprise network. USDA also strongly believes that further development of the department’s business architecture and development of the enterprise network must continue as a coordinated and integrated effort and, given that the current telecommunications infrastructure is fragmented and expensive to maintain, it does not make business sense to slow the pace of developing an enterprise network. Therefore, as the department moves forward on its enterprise network, USDA stated that it intends to update the architecture to include additional information on business data needs and information sharing requirements and to reassess telecommunications requirements as a matter of ongoing business practice. USDA’s position is inaccurate and misses the point of our recommendation. The department’s current architecture is incomplete. For example, it does not identify many of the kinds and/or types of data used in the department and does not provide a clear foundation for a seamless flow of information and interoperability among all agency systems that produce, use, and exchange information. As a result, it cannot provide an adequate basis for defining requirements for an enterprise network. By moving forward on an enterprise network without completing the architecture, USDA risks repeating past mistakes, i.e., investing in telecommunications that do not effectively support the department’s strategic business/program and operational needs. Troy G. Hottovy, Senior Information Systems Analyst The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a congressional request, GAO reviewed the Department of Agriculture's (USDA) efforts to improve its management of telecommunications resources and act on opportunities to achieve savings. GAO noted that: (1) USDA has taken positive steps to begin correcting its telecommunications management weaknesses--improvements that the department says could reduce its $200 million-plus reported annual investment in telecommunications by as much as $70 million each year; (2) for example, USDA conducted a departmentwide reengineering study and is beginning to test a redesigned approach for managing telecommunications resources; (3) USDA has also taken action to eliminate some redundant services and reduce costs; (4) however, USDA has not achieved significant cost savings or management improvements because many of the department's corrective actions are incomplete or inadequate; (5) specifically, USDA has not: (a) established the sound management practices necessary for ensuring that telecommunications resources are cost-effectively managed and payments for unused, unnecessary, or uneconomical services are stopped; (b) consolidated and optimized telecommunications to achieve savings where opportunities exist to do so; (c) adequately planned integrated networks in support of information sharing needs; and (d) determined the extent to which the department is at risk for telephone abuse and fraud and acted to mitigate those risks nationwide; (6) further, it is unclear how and when these needed corrective actions will be implemented because the department has not established an effective action plan or strategy for addressing GAO's recommendations with timeframes, milestones, and resources for making improvements; and (7) a major factor contributing to this situation is that no one at USDA has been given overall responsibility, authority, and accountability for fixing USDA's long-standing telecommunications management problems. |
SEOUL/WASHINGTON (Reuters) - North Korea displayed trademark defiance on Wednesday over new United Nations sanctions imposed after its sixth and largest-ever nuclear test, vowing to redouble efforts to fight off what it said was the threat of a U.S. invasion.
U.S. President Donald Trump said the sanctions, unanimously agreed on Monday by the 15-member U.N. Security Council, were just a small step toward what is ultimately needed to rein in Pyongyang over its nuclear and missile programs.
North Korea’s Foreign Ministry said the resolutions were an infringement on its legitimate right to self-defense and aimed at “completely suffocating its state and people through full-scale economic blockade”.
“The DPRK will redouble the efforts to increase its strength to safeguard the country’s sovereignty and right to existence and to preserve peace and security of the region by establishing the practical equilibrium with the U.S.,” it said in a statement carried by the official KCNA news agency.
The Democratic People’s Republic of Korea (DPRK) is North Korea’s official name.
The statement echoed comments on Tuesday by DPRK’s Ambassador to the United Nations in Geneva, Han Tae Song, who said Pyongyang was “ready to use a form of ultimate means”.
“The forthcoming measures ... will make the U.S. suffer the greatest pain it ever experienced in its history,” Han said.
The North’s Rodong Sinmun newspaper also accused South Korea of being Washington’s “puppet”, criticizing Seoul’s agreement with the United States to amend an existing bilateral guideline that will now allow the South to use unlimited warhead payloads on its missiles.
The U.N. Security Council agreed to tighten sanctions on North Korea, banning its textile exports and capping fuel supplies, and making it illegal for foreign firms to form commercial joint ventures with North Korean entities.
The U.N. resolution was triggered by North Korea’s test of what it said was a hydrogen bomb.
Damage to mountainous terrain at the North’s nuclear test site in Punggye-ri seen in satellite imagery taken after the latest test was more extensive than anything seen after the five previous tests, said 38 North, a Washington-based project which monitors North Korea.
There was also activity at another location in the Mount Mantap site involving large vehicles and mining equipment that suggests “onsite work could now be changing focus to further prepare those other portals for future underground nuclear testing”, 38 North said.
The North accuses the United States, which has 28,500 troops in South Korea, a legacy of the 1950-53 Korean War, of continual plans for invasion.
North Korea has also tested a missile capable of reaching the United States, but experts say it is likely to be at least a year before it can field an operational nuclear missile that could threaten the U.S. mainland.
A U.S. official, speaking on the condition of anonymity, said intelligence agencies had observed North Korea moving a mobile missile launcher in the past 48 hours which could potentially indicate a possible missile launch by the North in the coming days.
The official did not comment on the location or the type of missile, but emphasized that while a launch was possible, North Korea could simply be moving the launcher.
ANOTHER SMALL STEP
Trump has vowed not to allow that to happen.
North Korean leader Kim Jong Un meets supporters in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang September 12, 2017. REUTERS/KCNA
A tougher initial U.S. draft resolution was weakened to win the support of China and Russia, both of which hold veto power on the U.N. Security Council. Significantly, it stopped short of imposing a full embargo on oil exports to North Korea, most of which come from China.
“We think it’s just another very small step, not a big deal,” Trump told reporters at the start of a Tuesday meeting with Malaysian Prime Minister Najib Razak.
“I don’t know if it has any impact, but certainly it was nice to get a 15-to-nothing vote, but those sanctions are nothing compared to what ultimately will have to happen.”
U.S. Treasury Secretary Steven Mnuchin also warned China, North Korea’s main ally and trading partner, that Washington would “put additional sanctions on them and prevent them from accessing the U.S. and international dollar system” if it did not follow through on the new measures.
Another senior administration official told Reuters that any such “secondary sanctions” on Chinese banks and other companies were on hold for now to give Beijing time to show it was prepared to fully enforce the latest and previous rounds of sanctions.
Washington has so far mostly held off on new sanctions against Chinese banks and other companies doing business with North Korea, given fears of retaliation by Beijing and possibly far-reaching effects on the world economy.
Russia and China both say they respect U.N. sanctions and have called on the United States to return to negotiations with North Korea. They have also said they could kick-start talks with North Korea if the United States halts joint military drills with South Korea, which Washington has rejected.
An article carried on the front page of the People’s Daily, the official paper of China’s ruling Communist Party, said the Korean Peninsula had reached the “moment of choice” where the United States and North Korea must break from the cycle of nuclear tests and sanctions.
“All parties involved in the peninsula have their own strategic considerations, but not being able to see beyond this vicious cycle is not in anyone’s interest,” the article said.
Asked about the North Korean and U.S. rhetoric, China’s Foreign Ministry reiterated a call for restraint and a return to dialogue.
Slideshow (13 Images)
“We hope all relevant parties can be rational and maintain restraint and not take actions that could further increase tensions on the peninsula”, ministry spokesman Geng Shuang said at a regular briefing.
In another show of force, South Korea’s Air Force conducted its first live-fire exercise of Taurus long-range, air-to-surface missiles on Tuesday, the Defence Ministry said, as practice for precision bombing North Korean facilities.
U.S. Ambassador to the United Nations Nikki Haley said the new sanctions could eventually starve North Korea of an additional $500 million or more in annual revenue.
The United States has said that a previous round of sanctions agreed in August was aimed at cutting North Korea’s $3 billion in exports by a third. ||||| (CNN) North Korea has warned the United States that it will pay a "due price" if harsh sanctions against the country are agreed at a United Nations Security Council meeting on Monday.
North Korea's Foreign Ministry said in a statement published on state media that if the US "does rig up the illegal and unlawful 'resolution'" it would respond in kind.
The Security Council is due to vote in New York on a US-drafted resolution to impose new restrictions on the rogue state following its sixth and largest nuclear test, carried out just over a week ago.
"The DPRK is ready and willing to use any form of ultimate means," the statement said, referring to the country by its acronym.
"The forthcoming measures to be taken by the DPRK will cause the US the greatest pain and suffering it had ever gone through in its entire history."
US puts forward another draft resolution
The US put forward another draft resolution Monday that made considerable changes to a previous version of the proposal.
The latest draft removes a call for a full oil embargo on the country and omits the freezing of assets and a call for a travel ban for North Korean leader, Kim Jong Un. The new draft also softens its language on foreign workers and other issues.
A previously circulated version of the US resolution called for a full ban on exports of oil to North Korea and an asset freeze on Kim, the Worker's Party and government of North Korea.
The Security Council vote is expected on Monday early evening ET.
The Reuters news agency reported Monday that the initial US proposals had been watered down, citing a new version of the draft resolution. The report also said that the sanctions had been softened to appease China and Russia, citing diplomats.
Russia and China both have veto power in the vote as permanent members of the Security Council. Both had expressed skepticism over the strict sanctions.
China -- North Korea's most powerful ally -- said Monday that it supported the Security Council's plan for a "further response" to North Korea and to take "necessary actions."
"We hope UNSC members will come to a consensus through full consultations and will send out the voice of unity and solidarity," Chinese Foreign Ministry spokesperson Geng Shuang said at regular press conference Monday.
"The UNSC's response and actions should be helpful to the denuclearization of the Korean Peninsula and to maintaining the stability of the region. And also helpful to solve the North Korea issue peacefully," Geng said.
The US and its allies have been calling for stern measures against North Korea since the September 3 nuclear test.
The test sent powerful tremors across the region, suggesting the device used was the most powerful the nation has ever tested. Pyongyang claims it tested a hydrogen bomb capable of sitting atop a ballistic missile.
JUST WATCHED The weapon that makes N. Korea more dangerous Replay More Videos ... MUST WATCH The weapon that makes N. Korea more dangerous 01:12
Pyongyang celebrates
Despite the impending vote on potentially painful economic sanctions, the atmosphere in Pyongyang over the weekend was one of celebration.
North Korea commemorated the 69th anniversary of its founding on Saturday, holding large patriotic displays of dancing and devotion to the Kim family.
Speaking to CNN reporters, North Koreans on the street appeared unconcerned about further sanctions and threats of military action from the United States.
Participation in mass celebrations is mandatory for privileged citizens allowed to live in the capital #InsideNorthKorea A post shared by Will Ripley (@willripleycnn) on Sep 9, 2017 at 1:42am PDT
"We know the Americans may come back with many more sanctions but in response we Koreans will continue shooting up many more missiles and conducting many more H-bomb tests," North Korean shop assistant Han Myong Sim told CNN's Will Ripley.
"We don't worry very much," said another shop worker, Ri Jong Ok. "As long as we have Kim Jong Un, we'll survive."
NEW: North Korean leader Kim Jong Un hosts glitzy gala for nuclear scientists, shows first video of purported H-bomb test A post shared by Will Ripley (@willripleycnn) on Sep 10, 2017 at 4:20am PDT
Among the celebrations was a gala event in honor of North Korea's nuclear scientists, who successfully conducted the country's sixth nuclear test
North Korean leader Kim attended the glitzy event himself, where footage purportedly showing the explosion was played, accompanied by a full string orchestra.
Merkel calls for Iran-like deal
Speaking on Monday, South Korea's Foreign Minister Kang Kyung-wha said North Korea's nuclear arsenal was "the biggest challenge to our foreign affairs and security front and will continue to be so for many years to come."
But Kang added both the US and South Korea believed in following a policy of "responding firmly (to) provocations through tough sanctions while leaving the door open for dialogue."
Over the weekend, leaders in Germany and France waded into the escalating crisis.
German Chancellor Angela Merkel said in an interview with a German newspaper she would "immediately say yes" if Germany was asked to help end the crisis.
She said an agreement similar to the Iranian nuclear deal struck under the Obama administration could be the solution. Under the deal, Iran agreed to scale back its nuclear program in exchange for sanctions relief.
"I could imagine such a format being used to end the North Korea conflict. Europe and especially Germany should be prepared to play a very active part in that," Merkel told Frankfurter Allgemeine Sonntagszeitung in an interview published Sunday.
French President Emmanuel Macron spoke on the phone with US President Donald Trump and Japanese Prime Minister Shinzo Abe on Saturday to discuss the possibility of new sanctions.
"(They discussed) a firm and united reaction towards North Korea's repeated provocations as it is a threat to world peace and security," the Elysee Palace told CNN. ||||| Follow @bpolitics for all the latest news, and sign up for our daily Balance of Power newsletter.
The U.S. has watered down a proposal to punish North Korea for its sixth and most powerful nuclear test, omitting an oil embargo and a freeze of Kim Jong Un’s assets that may have hindered passage by the United Nations Security Council.
The U.S., U.K. and France are united on the latest proposal, but it’s unclear whether Russia and China -- the other veto-holding members of the United Nations Security Council -- will back the text as it stands, according to a European diplomat who asked not to be identified because the discussions are private. A vote was scheduled for 6 p.m. New York time on Monday, according to a UN official.
Barring oil exports was always a long-shot. Still, the revised draft resolution would cap shipments of refined petroleum products at 2 million barrels a year while limiting crude oil exports to North Korea to current levels, the diplomat said. It would retain a proposed ban on textile exports, while diluting a ban on the use of guest workers from the isolated country and dropping proposals to freeze the assets of Kim and national airline Air Koryo, the diplomat said.
The latest draft also would step up an inspections program for cargo ships heading to or from North Korea, but wouldn’t authorize the use of force to board ships on the high seas, as an earlier draft would. The resolution does say vessels that refuse to be inspected, either in the ocean or at port, may be subject to an asset freeze.
Six-Party Talks
“The DPRK’s ongoing nuclear- and ballistic missile-related activities have destabilized the region and beyond,” according to the draft, using initials of North Korea’s formal name. The proposal says the Security Council is committed to restarting six-party talks aimed at negotiating a complete denuclearization of the Korean peninsula. Those talks -- which included North Korea, South Korea, China, Russia, Japan and the U.S. -- broke off in 2009.
More changes could still take place before a final draft is ready for a vote. The negotiations reflect differences among world powers over the best way to halt Kim’s push for a nuclear weapon that can target the U.S. homeland. President Donald Trump wants China and Russia to use their economic leverage to rein in Kim, but both countries are skeptical that sanctions will work and have called for peace talks.
North Korea warned Monday of retaliation if the UN approves the U.S. proposal for harsher sanctions.
North Korean leader Kim Jong-Un in this undated image released on Sept. 10. Photographer: KCNA/AFP via Getty Images
“In case the U.S. eventually does rig up the illegal and unlawful ‘resolution’ on harsher sanctions, the DPRK shall make absolutely sure that the U.S. pays a due price,” its state-run Korean Central News Agency said, citing a statement by the Ministry of Foreign Affairs. “The forthcoming measures to be taken by the DPRK will cause the U.S. the greatest pain and suffering it had ever gone through in its entire history.”
Despite the rhetoric, there was a sign both sides are looking for a diplomatic solution. North Korean foreign ministry officials are likely to hold informal talks with former U.S. officials in Switzerland on Monday, Japan’s Nippon Television reported, without saying where it got the information. Some Chinese banks have already starting banning new North Korean accounts or blocking new deposits from existing accounts, the Financial Times reported.
Read More: Haley’s UN Brinkmanship Shaped by Advice From Pollster
Oil Sales
China supplies most of North Korea’s crude oil, according to the U.S. Energy Information Administration, but it’s hard to know exactly how much: China hasn’t reported any volumes in its published customs data since 2013. The agency estimates North Korea crude imports at about 10,000 barrels a day.
China also reported sending 6,000 barrels a day of oil products to North Korea last year, according to the EIA, citing UN customs data. While that’s about 10 percent more than the maximum amount allowed in the draft resolution, the exact volume of products is hard to determine and the cap is near estimated levels reported elsewhere.
As many as 60,000 North Koreans are working in more than 50 countries, according to estimates from South Korea’s foreign ministry. U.S. Secretary of State Rex Tillerson has called on the international community to suspend the flow of North Korean guest workers, who earn an estimated $1.5 billion to $2.3 billion a year -- much of which is sent back to the regime.
Vladimir Putin at a joint press statement with Korea’s Moon Jae-in on Sept. 6. Photographer: Michael Klimentyev/AFP via Getty Images
Russian President Vladimir Putin has said North Koreans would “eat grass” rather than give up nuclear weapons, while China is wary about cutting off Kim’s economic lifeline to the point it risks collapsing his regime. China is North Korea’s main ally and by far its biggest trading partner, including for oil shipments.
China supports action by the Security Council in response to North Korea’s nuclear test, Chinese Foreign Ministry spokesman Geng Shuang said in a daily briefing on Monday.
“We hope that the members of the council will reach a consensus on the basis of full consultation and make a voice of solidarity,” he said.
— With assistance by Flavia Krause-Jackson, Jun Luo, Ting Shi, Keith Zhai, and Ramsey Al-Rikabi | As the UN prepares to impose yet more sanctions on North Korea, Pyongyang is leveling new threats against the US. If the UN goes through with the penalties, Pyongyong warned that America will pay a "due price," reports CNN. "The forthcoming measures to be taken by the DPRK will cause the US the greatest pain and suffering it had ever gone through in its entire history," says North Korea's foreign ministry, using the North's acronym. The threat comes as the UN Security Council considers sanctions after the North's latest—and biggest—nuclear test, but how tough those penalties will be remained very much up in the air. The US originally sought an extremely tough series of penalties, including an oil embargo and a financial and travel ban on Kim Jong Un, but the latest draft in circulation removes those items, reports Reuters. Even so, it remained unclear whether Russia and China would back even the watered-down version. The vote was tentatively scheduled for Monday. Bloomberg, meanwhile, cites a report in Japanese media suggesting that back-door diplomacy was in the works. Officials from the North's foreign ministry were expected to meet informally with former US officials in Switzerland on Monday. Another positive sign: Pyongyang did not conduct another test as feared during celebrations on Sunday. |
Murdock loves to collect things: animals, orchids, Chippendale mirrors, Czechoslovakian chandeliers. He keeps yet another black Welsh flock at one of his two homes in Southern California , a 2,200-acre ranch whose zoological bounty extends to a herd of longhorn cattle, about 800 koi in a manmade lake and 16 horses — down from a population of more than 550, most of them Arabians, 35 years ago — with their own exercise pool. He has five homes in all, one on the small Hawaiian island of Lanai , which he owns almost in its entirety. He shuttles among them in a private jet. Forbes magazine’s most recent list of the 400 richest Americans put him at No. 130, with an estimated net worth of $2.7 billion, thanks to real estate development and majority stakes in an array of companies, most notably Dole. Five years earlier the estimate was $4.2 billion, but the recession took its toll.
His affluence has enabled him to turn his private fixation on diet and longevity into a public one. I went to see him first in North Carolina in late January. It is there, outside of Charlotte , in a city named Kannapolis near his lodge, that he has spent some $500 million of his fortune in recent years to construct the North Carolina Research Campus, a scientific center dedicated to his conviction that plants, eaten in copious quantities and the right variety, hold the promise of optimal health and maximal life span. The campus is a grand and grandiose sight, a cluster of mammoth Georgian-style buildings that dwarf everything around them. They call to mind an august, aged university, but the brick is without blemish, and there is no ivy.
Inside are world-class laboratories with cutting-edge equipment and emblems of the ostentation with which Murdock approaches much of what he does. He made two separate trips to the mountaintop quarries in Carrara, Italy , to select the 125 tons of off-white marble that cover the floor and even the walls of the central atrium of the main building, called the David H. Murdock Core Laboratory. He also commissioned, for the atrium’s dome, an enormous painted mural with outsize, hypervivid representations of about two dozen foods at the center of his diet, including grapes as large as Frisbees, radishes bigger than beach balls and a pineapple the size of a schooner. This kaleidoscopic orgy of antioxidants is presented as a wreath around a soaring eagle, whose wingspan was lengthened at the last minute, to about 18 feet from 12, at his request. The bird symbolizes him.
There are health nuts, and then there is Murdock: health paragon, patron and proselytizer, with a biography as colorful as that mural, a determination to write a few more chapters of it still and a paradox of sorts at the center of it all. What set him on this quest was a loss that no amplitude of wellness can restore, and even if he teased out his days into eternity, he would be hard pressed to fill them with the contentment they once had.
Murdock stands only 5-foot-8, and while he perhaps doesn’t look each and every one of his many years, his skin is deeply wrinkled, and his hair is entirely white. His hearing has dulled, so that he frequently misunderstands the questions he is asked, though it’s possible in some instances that he simply decides not to answer them and to talk about something else instead. He thrums with willfulness.
“I never had a boss in my whole life,” he says, owning up to what he labels a “dictatorial” streak. “I’ve totally destroyed anybody’s ability to tell me what to do.”
His energy, more than his appearance, makes him seem younger than he is. At his lodge he leapt from his chair every 20 minutes to grab unwieldy four-foot-long logs and hurl them into a stone fireplace two stories tall. The gesture was not only irresistible metaphor — he didn’t want the flame to die — but also showy proof of his strength. He tries to fit in weight lifting several times a week, and that, combined with brisk walks on a treadmill and his diet, helps keep his weight at about 140 pounds, though he has always been naturally slender, even when he ate what he pleased. He doesn’t count calories or believe in extreme caloric restriction as a way to extend life. But he does believe that excess weight is a sure way to abbreviate it, and reprimands friends, acquaintances and even strangers who are heavy.
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In 2006, when he first met with D. H. Griffin, whose demolition company was to prepare the site for the research campus, he took note of Griffin’s size. At 5-foot-11, he weighed about 285 pounds.
“You’re probably going to die before this job’s done, because you’re so fat and unhealthy,” Murdock told Griffin, as Griffin recalls, adding that Griffin’s family would wind up paying extra money for an extra-large coffin. Later he did something more constructive: he offered Griffin a bonus if he lost 30 pounds. Griffin did and collected $100,000. He has since regained 22 of them.
In restaurants Murdock will push the butter dish toward the server and say, “Take the death off the table.” He will ask employees or friends who are putting sugar in coffee or milk in tea why they want to kill themselves and will upbraid people leaving healthful food unfinished about the vitamins they’re squandering.
I experienced this during a visit in early February to his California ranch, where I joined him for lunch: a six-fruit smoothie; a mixed-leaf salad with toasted walnuts, fennel and blood orange; a soup with more than eight vegetables and beans; a sliver of grilled Dover sole on a bed of baby carrots, broccoli and brown rice.
“How did you like your soup?” he asked me after one of his household staff members removed it. I said it was just fine.
“Did you eat all your juice?” he added, referring to the broth. I said I had left perhaps an inch of it.
He shot me a stern look. “You got a little bit of it,” he said. “I get a lot — every bit I can.” He shrugged his shoulders. “That’s O.K. You’ll go before me.”
Photo
There was dessert, too: flourless cookies made with dark chocolate and walnuts, both rich in antioxidants, and sweetened not with sugar but with honey. He quickly polished one off and then called out to the kitchen to say that he wanted the cookies to make an encore appearance after dinner, so he could have another then. Five minutes later, still cookie-struck, he walked into the kitchen to ask that a few be packed up for him to have handy through the afternoon.
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Murdock grew up in the tiny town of Wayne, Ohio , the middle child of three and the only son. He didn’t see much of his father, a traveling salesman with an inconsistent income, but was close to his mother, who took in laundry and scrubbed floors to help make ends meet. He softens when he recalls sitting in her lap while she read to him, a memory that he says hasn’t been dimmed by the length of her absence. She died, from cancer , when she was just 42 and he 17.
By then he was living on his own, having dropped out of school at 14. He has dyslexia , though no one initially realized it, and never managed grades better than D’s. “Everybody laughed at me,” he says. “They thought I was an imbecile.” He traded classwork for changing oil and pumping gas; he lived in a room above the service station.
When he talks about his childhood, his lack of formal education is one of two themes he brings up again and again, usually to cast it as an inadvertent gift. He says that because he felt the need to compensate for it, he read prodigiously and, he stresses, without the narrowness of focus he notices in many conventionally learned people. Biographies of Andrew Carnegie , Socratic dialogues, Shakespearean sonnets, “ The Prince ”— he devoured it all over time. He also studied something called brain acceleration, which he says taught him to think about three things at once. “I’ll match wits with anybody,” he says. “I don’t care if they have the top degree in the world.” He notes that everyone on his research campus’s board is a Ph.D. or an M.D. But he, the high-school dropout, presides over the meetings.
The other theme is how low the point from which he rose to riches was. After finishing several years of service in the U.S. Army at age 22, he was not only penniless but also homeless, and slept for a while under a bush in a Detroit park. He would cadge free coffee from a friend employed at a greasy spoon. A man who worked for a loan company met Murdock there, learned that he was a veteran and offered to help.
With the man’s assistance, he rounded up $1,200 in loans and bought that diner, which he whipped into freshly scrubbed, newly painted shape. He sold it a year and a half later for $1,900, spent $75 of the profit on a car, set out for California and stopped along the way in Phoenix , where the opportunity to make money was too good to pass up. He stayed for 17 years, buying cheap land and constructing affordable houses for all the people moving South and West after World War II. “I was building as fast as I could break ground,” he says. “Bang, bang, bang: I could hardly get a house finished before it was sold.”
Houses and small office buildings were followed by larger office buildings, in Arizona and California and eventually the Midwest. To invest all the money pouring in, he bought stock, then more stock, then whole companies. He acquired control of International Mining in 1978 and in the early 1980s became the largest shareholder in Occidental Petroleum by selling the company his 18 percent interest in Iowa Beef. (That was back when he and filet were on friendly terms.) He took over Dole, part of a larger company, Castle & Cooke, which he acquired control of in 1985.
It was a heady ride, and his partner for the headiest stretch of it was a raven-haired, German-born beauty who became his wife in 1967, when he was in his mid-40s and she was in her late 20s. Her name was Gabriele. Although he was married twice before, he hadn’t fathered any children. With Gabriele he had two boys, who joined a son of hers whom he adopted. He moved his base of operations from Arizona to California and, for his new family, bought the legendary Conrad Hilton estate in Beverly Hills. Soon afterward, for weekend getaways, he also bought the ranch, in Ventura County, about a 30-minute drive away. For the three boys, he got all those animals, and for Gabriele, jewels, gowns, fresh flowers — whatever she wanted.
“He adored her,” says E. Rolland Dickson, Murdock’s personal physician at the Mayo Clinic and a longtime close friend, adding that even 15 years into the marriage, “he had that look of a young guy on his honeymoon.”
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He and Gabriele traveled the world; he chose one trip, she the next. Murdock says: “She always wanted to do what I wanted to do, and I always wanted to do what she wanted to do. It’s very hard to find somebody that way.”
And harder still to lose her. In 1983 she was given a diagnosis of advanced ovarian cancer . There was no effective treatment, though he looked wide and far. The couple took a suite at a hotel adjacent to the Mayo Clinic in Rochester , Minn. Determined to heal her somehow, he wondered about nutrition and began to do extensive research into what she — and he, in support of her — should eat. The answer was more or less the kind of diet he has stuck to ever since.
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Because many cancers have environmental links and the one she got didn’t run in her family, he suspects that lifestyle was a culprit, and is convinced that if the two of them had eaten better sooner, she would have been spared the surgery, the radiation, the chemotherapy , the wheelchair, the year and a half of hope and fear and pain. “If I had known what I know today,” he says, “I could have saved my wife’s life. And I think I could have saved my mother’s life too.” Gabriele Murdock died 18 years into their marriage, in 1985. She was 43.
Less than a year later, the oldest of the couple’s three sons, Eugene, drowned in the estate’s pool, apparently after accidentally hitting his head. He was 23. Even then death wasn’t done with the family Murdock and Gabriele created. About seven years ago, the second of the three boys, David II, had a fatal car crash as he sped down the Santa Monica Freeway. He was 36. The family is down to just Murdock and his youngest son, Justin, now 38, who helps run NovaRx, a biotechnology firm in which Murdock owns a controlling share. Murdock did marry a fourth time, and then a fifth, but neither union lasted long. He has been single for more than a decade now, though he frequently makes passing references to “my wife,” meaning Gabriele and only Gabriele, photographs of whom dominate his homes. The other wives don’t show up.
“I had a lot of tragedy,” he told me one of the few times he engaged the topic of his family’s steady, cruel erosion. The room wasn’t ringing, and he turned his face away.
For a few years after losing Gabriele and Eugene, he couldn’t find the energy for much of anything and delegated many business dealings to subordinates. When his zest finally returned, he was consumed by the subject of what and how he and Gabriele should have eaten. He pored over medical journals, befriended and debriefed experts, gave speeches. Bit by bit his entire world became one of well-being. Out behind the orchid conservatory on his California ranch, he constructed tens of thousands of square feet of additional greenhouse space, where a small posse of gardeners tend an encyclopedic array of produce. If he can’t find something at the grocery store, he can probably just pluck it from here. When I walked through the greenhouses recently, I spotted Swiss chard, cabbage, celery, onions, spinach, beets, radishes, eggplant, artichokes, red peppers, rhubarb, baby bananas, strawberries, grapefruit, kumquats, clementines, lemons, star fruit and a whole lot else I couldn’t immediately identify. Where Willy Wonka had rivers of chocolate, Murdock has thickets of cruciferous vegetables.
At Dole’s headquarters in Westlake Village, Calif., just a 15-minute drive from the ranch, employees eat in a subsidized cafeteria where salad is plentiful and chicken nuggets unthinkable, and they have free access to a company gym where personal training, also subsidized, is $30 an hour. The exhortation to eat right is so pervasive that if you call Dole and are put on hold, you don’t hear Muzak but, instead, sunny dietary bromides and nutrition news bulletins.
Across the street is a hotel, completed in 2006 and operated by the Four Seasons, that Murdock built to house the California Health and Longevity Institute, a combination medical suite, spa and demonstration kitchen. Clients can be screened for various cancers, have their body fat measured inside a special pod and get an earful about quinoa, along with a cooking tutorial. On the hotel’s room-service menus, in place of heart-shaped symbols designating low- cholesterol selections, there are L-shaped symbols designating dishes that might, by dint of fiber or antioxidants or omega-3 fatty acids, promote longevity. The hummus wears such a tag; so does the multigrain penne with a meatless tomato sauce.
The institute and hotel are meant to turn a profit — and do, a small one — and they underscore how interconnected Murdock’s evangelism and business interests have become. As does the research campus. Dole is the world’s largest producer of fruits and vegetables, so studies into their health benefits have a huge potential upside for the company. Many of the foods under the microscope are foods Dole sells.
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Blueberries, for example. Murdock lured Mary Ann Lila, a world-renowned blueberry authority, to the research campus from the University of Illinois , where, she says, she simply didn’t have anything like the instant access to specialized equipment that Murdock has made possible. The campus has a particularly impressive lineup of high-powered nuclear magnetic-resonance machines, which analyze compounds on a molecular level. Lila — technically affiliated now with North Carolina State University — and colleagues are using the fastest of these to look for the unknown natural compounds in blueberries that will speed their efforts to maximize the fruit’s medicinal properties. They believe blueberries could help combat several diseases, including obesity .
Other researchers on campus are investigating such matters as the extent to which quercetin, found in the skins of apples, can have an anti-inflammatory effect; whether Chia seeds are as useful a source of omega-3 fatty acids as, say, halibut; and how significantly and reliably a certain type of fermented Chinese tea can lower bad cholesterol. But while they’re working in a setting created by Murdock, they’re for the most part from the faculties of leading North Carolina universities that aren’t formally affiliated with Dole, and they might well be doing this work anywhere. Besides which, Murdock’s own fortunes aren’t tethered to how well Dole does, with or without the boost of campus research. Over the decades he has collected companies the way he has collected sheep, and owns the one, for example, that provided all the red brick for the campus.
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Murdock checks in with researchers regularly and impatiently, asking them why science is so stubbornly sluggish. He moves fast. Little more than two years elapsed between the demolition of six million square feet of shuttered textile mills and the opening of the campus in October 2008. He chose this location because he owned those mills in the early 1980s, long before the textile industry tanked, and still had land and investments all around them. He has had the lodge nearby for almost three decades.
The luxury with which the campus is furnished is almost as remarkable as the speed with which it materialized. There are tables carved from rare Hawaiian palm trees; desks from India whose black marble surfaces have lapis lazuli and jade inlays; marble statuettes. Lila cracks: “Normally, when you have a lab and someone’s wheeling in liquid nitrogen, you don’t have to worry about them hitting a Ming vase. But we have a different paradigm here.”
This lavishness is just one clue that the campus reflects a passion as much as it does a business strategy. Another is the millions Murdock is spending on the Murdock Study, with the goal of enrolling 50,000 Kannapolis-area residents, taking full blood work from them, storing it in a refrigerated warehouse with backup generators for the backup generators and annually monitoring the residents’ health. The hope is that the study will help determine what biological markers today can tell doctors about the onset of disease decades later. The results won’t be proprietary to Dole.
Murdock says that he wants to slay such killers as diabetes , heart disease and, of course, cancer, and the scientists around him say that in some epically optimistic corner of his mind, he quite possibly believes he can. Unable to save Gabriele or the boys, he’s out to save the world. It’s certainly not his own health that stands to benefit most from the campus, because the nutrients studied there are ones he’s already consuming in abundance, to cover his bases. What the research is more likely to do, at least during his lifetime, is validate that he knows better than anybody else.
Dreamers have pursued longevity — and, in some cases, immortality — in all sorts of wacky and exacting ways, from hyperbaric chambers to cryogenics. And they have sought to fine-tune their bodies with all manner of rigorously proscribed diets: only raw foods; only plants; only the flesh, fruit and nuts that prehistoric humans, not yet wise to agriculture, would have hunted and foraged.
Murdock’s methods are, in that context, utterly mainstream, an example of extraordinary discipline rather than frontier science. Sure, the rinds and peels — which he explains by saying that the parts of fruits most directly sun-kissed are bound to harbor the most energy — may be a little strange. But they’re not dangerous-strange, and a plant-based diet that’s low in animal fat while still allowing for protein sources beyond legumes has emerged as the consensus recommendation of most medical professionals. Murdock never neglects protein: the breakfast he ate just hours before our lunch included not only a smoothie and 10-grain cereal in almond milk but also a bevy of sardines.
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He is careful to get a little bit of daily sun, which is crucial for proper absorption of vitamin D , but not too much, lest he court skin cancer . He tries to go to bed no later than 11 p.m. and to get more than six hours of sleep every night. Perhaps the only real eyebrow raiser in his regimen is his rejection of any medicine that isn’t truly necessary. When he had that sore throat, he didn’t suck on a lozenge or swallow aspirin. When he has had precancerous growths removed from his face, he has passed on anesthetics.
“I just turned my brain on and said, ‘Cut!’ ” he said. “Of course it hurt. But I controlled that.”
The doctors who work with Murdock say that he has ideal blood pressure , clear arteries, good muscle tone. But they doubt that these will carry him to 125. They point out that he didn’t adopt his healthful ways until his 60s, and they note that genes often trump behavior. Although Murdock’s father lived well into his 90s, his mother died young, and his sisters are both dead.
The life expectancy for an American man born today is only 75½, and demographic data suggest that an American man who has made it to 87 can expect, on average, another 5¼ years. The longest life span on record is 122½, and that belonged to a woman — French, of course — who died in 1997. Her closest male competitors reached only 115½.
As for beating those statistics, “There’s been no documented intervention that has been shown to radically extend duration of life — ever,” says S. Jay Olshansky, an expert on aging who teaches at the School of Public Health at the University of Illinois-Chicago. Told of Murdock’s health-minded habits, Olshansky said that just about all of them were prudent ways of probably “letting his body live out to its genetic potential,” but added, “He’ll be disappointed when he doesn’t reach 125.”
Robert Califf, a Duke University cardiologist who sits on the research campus board, says that even Murdock’s laudable diet isn’t a provable longevity booster. “You can do short-term studies that give you a lot of information about biology,” Califf says. “But knowing whether eating a food actually causes you to live longer than not eating that food: the answer to that will only come with a study of an entire generation.”
If he could live to 125, why he would want to? More than his hearing will ebb. He may never find the right companion for the long fade-out. Although he says that he’d ideally like to marry again, he acknowledges that few women are suited to his degree of autonomy and wanderlust.
I got the feeling that part of what pushes him toward 125 is the sheer challenge. Years are yet another thing to collect, and he likes racking up accomplishments others haven’t. He bragged to me several times about once transplanting a centuries-old tree larger than any ever successfully moved. And he drew my attention to scores of massive, oddly shaped boulders from Thailand ’s River Kwai that decorate the grounds of the ranch, the residence where he spends most of his time (he sold the former Hilton estate 10 years ago). Each weighs several tons; he brought over six shiploads. “These are the only boulders that ever left Thailand,” he says. “You can’t take them out now.”
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He says that he still gets pleasure from them, and from much of the rest of his gilded life, and that he doesn’t know what, if anything, comes after. “There have been billions of people born and billions of people died, and people think God’s going to be standing at the gate ready to shake hands with everybody who’s coming through?” he says. Although he is a churchgoing Christian, death, he concedes, could simply be blackness, nullity.
During my last visit with him, Murdock took me out to see the koi. He enjoys tossing them their pellets of food from the red wood bridge that arches over the lake, and in particular delights in the way he merely has to stamp his feet to make them come swimming toward the bridge in a frenzy, eager for sustenance from on high.
“You want to know what I like and what makes me happy?” he said as we stood on the bridge. “Just having these fish makes me happy. Every one is alive because of me.” He pointed out that some were ordinary and some magnificent — just like people, he said — and told me that after a female releases her eggs, she tries to ward off lesser males, so stronger ones fertilize them. “It’s the survival of the fittest in all aspects of the world.”
We began tossing out pellets by the handful. He told me that I wasn’t using enough muscle and showed me how it was done.
Then he frowned. The koi, he said, weren’t lunging and thrashing. Had someone fed them too recently? Was someone feeding them too often? He vowed to look into it, declaiming the same fault in the fish that he finds in so many of the planet’s inhabitants.
“They’re not eating the way I like them to,” he said. ||||| The seed for this crawl was a list of every host in the Wayback Machine
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The WARC files associated with this crawl are not currently available to the general public. ||||| David Murdock, at age 90, has the look and energy of a man many years younger. The chairman of Dole Foods, the world's largest marketer of fruits and vegetables, has stated that he expects to live to 125, thanks to his lifestyle, diet and exercise regimen.In the early 1980s, about the same time Murdock bought a controlling interest in the conglomerate of which Dole was a part, his wife, Gabriele, was ill with advanced-stage ovarian cancer. The couple spent nearly two years traveling the world seeking information about potential cures. After Gabriele died in 1985, at age 43, Murdock stuck with many of the healthy lifestyle habits the couple discovered during their quest. (Murdock also lost his mother to cancer, when he was 17 and she was 42.) Murdock , whose net worth is estimated by Forbes to be $2.4 billion, has also committed more than $500 million toward the creation of the North Carolina Research Campus and David H. Murdock Research Institute in Kannapolis, N.C. There, researchers from government, industry, non-profit groups and eight universities can take advantage of advanced technology and agricultural resources to collaborate on studies that explore the potential health benefits of plants in boosting longevity and warding off what the institute calls "lifestyle-related disorders," like diabetes, obesity, Alzheimer’s disease and cancer. The campus also supports public campaigns to promote healthy choices.Murdock, who has stuck to a mostly vegetarian diet since he was in his 60s, believes it's never too late for any of us to reap the benefits of adopting healthy nutritional habits. He eats approximately 20 servings of fruits and vegetables every day, mostly blended into smoothies , which he's quick to note are made with the foods' outer skin intact. Nothing the sun touches, he says, including banana peels and orange rinds, should be tossed, but blended into our meals for full nutritional value.The mogul says he avoids vitamins and nutritional supplements, deriving an adequate balance of protein and carbohydrates from such foods as fish, beans, legumes and egg whites. Above all, he rejects fatty, empty calories. During one interview with The New York Times, he pushed away the butter dish delivered by a waiter, telling him, "Please take death off the table."I recently met with Murdock at the California Health and Longevity Institute in the Southern California town of Westlake Village, a state-of-the-art spa, medical clinic and demonstration kitchen he opened in 2006. As he later told me, "We take care of our vehicles – we're careful to put the proper kind of gasoline in the tank, put air in the tires, change the windshield wiper blades and brakes. But how many of us pay that much attention to what we put into our own bodies?"We have developed a culture in which we eat with our taste buds, not our brains," he told me. "It is never too late to change the way you eat — once you do, your body will thank you with a longer and healthier life."When I first heard Murdock speak, at a UCLA Longevity Institute conference, I was intrigued by his prescription that society needs to embrace fun to engage people in consistent exercise. He cited the example of the Volkswagen Fun Theory initiative's " Piano Staircase ." In 2009, the stairs to a metro station in Sweden were transformed overnight into piano keys, with each step wired to make the sound of its corresponding note. The day before the switch, video cameras revealed, the vast majority of commuters used the escalator beside the stairway to enter and exit the station. The day after, nearly all took the new, more fun stairs.Murdock's goal is for all Americans to begin perceiving exercise not as an option or chore, but a pleasant part of their daily life . One way to get there, he says, is by mixing up our routines. Some days, Murdock rides his horses – admittedly not an option for everyone – but he makes sure to alternate riding days with others spent in yoga class or in weight training at his gym. He also believes time outdoors naturally encourages activity and exercise, citing research that revealed many people fail to stick to an exercise regimen because they believe exercise is something that only happens inside a gym.Caregiving is one of society's great equalizers. The stress of looking after a loved one who is declining or dying takes a physical, emotional and mental toll no matter the resources you can bring to bear. Murdock knows this from experience, his wife's final years, and he captivates audiences when he speaks at conferences about the time he spent caring for her. But Murdock is also convinced, as are so many experts in family caregiving, that caregivers must never let their own health decline if they want to effectively help their loved ones and remain as strong as possible for themselves."Don't give up," he says. "Exercising and eating properly will build your physical and mental strength to endure the stressful situation." | David Murdock is 90 years old, but if he gets his way, it will be awfully hard for anyone to force him into retirement. The Dole Food CEO is offering to buy the company he works for outright for $12 a share, in a deal that values the company at $1.5 billion, the Wall Street Journal reports. Dole has been reviewing its business since last year amidst a profit slump. This year, it complained that volatility in the strawberry business was costing it dearly. Murdock already owns 40% of the company, and despite his advanced age, he thinks he'll be sticking around for a while. He has famously said that he expects to live to 125, reports Next Avenue, thanks to his healthy lifestyle and vegetarian diet, which he's been on since he was in his 60s. He eats 20 servings of fruits and vegetables a day, all with the outer skin on—he believes even the peels of bananas should be consumed (he takes his in smoothie form). |
Medicare covers up to 100 days of care in a SNF after a beneficiary has been hospitalized for at least 3 days. To qualify for the benefit, the patient must need skilled nursing or therapy on a daily basis. For the first 20 days of SNF care, Medicare pays all the costs, and for the 21st through the 100th day, the beneficiary is responsible for daily coinsurance of $95 in 1997. physician; and have the services furnished under a plan of care prescribed and periodically reviewed by a physician. If these conditions are met, Medicare will pay for skilled nursing; physical, occupational, and speech therapy; medical social services; and home health aide visits. Beneficiaries are not liable for any coinsurance or deductibles for these home health services, and there is no limit on the number of visits for which Medicare will pay. Medicare covers care in rehabilitation hospitals that specialize in such care and units within acute-care hospitals that also specialize. To qualify, beneficiaries must have one or more conditions requiring intensive and multidisciplinary rehabilitation services on an inpatient basis. In addition, to qualify as a rehabilitation facility, hospitals and units in acute-care hospitals must demonstrate their status by such factors as furnishing primarily intensive rehabilitation services to an inpatient population, at least 75 percent of whom require treatment of 1 or more of 10 specified conditions (for example, stroke or hip fracture). Rehabilitation facilities must also use a treatment plan for each patient that is established, reviewed, and revised as needed by a physician in consultation with other professional personnel. Inpatient rehabilitation is treated like any other hospitalization for beneficiary cost-sharing purposes. agencies, and exceptions to the limits are available to those that can show that their costs are above the limits for reasons not under their control. Inpatient rehabilitation care, provided at both rehabilitation hospitals and units of acute-care hospitals, is exempt from Medicare’s hospital prospective payment system (PPS), but is subject to the payment limitations and incentives established by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). Under this law, Medicare pays these facilities the lower of the facility’s average Medicare allowable inpatient operating costs per discharge or its target amount. The target amount is based on the provider’s allowable costs per discharge in a base year,trended to the current year through an annual update factor. A TEFRA facility with inpatient operating costs below its ceiling receives its costs plus 50 percent of the difference between these costs and the ceiling or 5 percent of the ceiling, whichever is less. Rehabilitation facilities receive cost-based payments without regard to the TEFRA limits until they complete a full cost-reporting year, and that year is then used as their base year. Long-term care hospitals are another category exempted from the hospital PPS. To qualify as long term, hospitals must have an average length of stay of a least 25 days for their Medicare patients. Medicare pays these hospitals on the basis of their costs, subject to TEFRA limits, just like rehabilitation hospitals. The number of long-term care hospitals has grown from 94 in 1986 to 146 in 1994, and Medicare payments to them have increased considerably from about $200 million in 1989 to about $800 million in 1994. However, these hospitals remain a small part of the Medicare program, representing less than 0.5 percent of expenditures, and little research or analysis has been done on them. As a result, little is known about the reasons for the growth that has occurred in the long-term care hospital area. rehabilitation facilities but is not included in the administration’s fiscal year 1998 budget proposals. The Medicare SNF, home health, and inpatient rehabilitation benefits are three of the fastest growing components of Medicare spending. From 1989 to 1996, Medicare part A SNF expenditures increased over 300 percent, from $2.8 billion to $11.3 billion. During the same period, part A expenditures for home health increased from $2.4 billion to $17.7 billion—an increase of over 600 percent. Rehabilitation facility payments increased from $1.4 billion in 1989 to $3.9 billion in 1994, the latest year for which complete data were available. SNF payments currently represent 8.6 percent of part A Medicare expenditures; home health, 13.5 percent; and rehabilitation facilities, 3.4 percent. At Medicare’s inception in 1966, the home health benefit under part A provided limited posthospital care of up to 100 visits per year after a hospitalization of at least 3 days. In addition, the services could only be provided within 1 year after the patient’s discharge and had to be for the same illness. Part B coverage of home health also was limited to 100 visits per year. These restrictions under part A and part B were eliminated by the Omnibus Reconciliation Act of 1980 (ORA) (P.L. 96-499), but little immediate effect on Medicare costs occurred. With the implementation of the Medicare inpatient PPS in 1983, use of the SNF and home health benefits was expected to grow as patients were discharged from the hospital earlier in their recovery periods. But HCFA’s relatively stringent interpretation of coverage and eligibility criteria held growth in check for the next few years. As a result of court decisions in the late 1980s, HCFA issued guideline changes for the SNF and home health benefits that had the effect of liberalizing coverage criteria, thereby making it easier for beneficiaries to obtain SNF and home health coverage. Additionally, the changes prevent HCFA’s claims processing contractors from denying physician-ordered SNF or home health services unless the contractors can supply specific clinical evidence that indicates which particular services should not be covered. changes.) For example, ORA 1980 and HCFA’s 1989 home health guideline changes have essentially transformed the home health benefit from one focused on patients needing short-term posthospital care to one that serves chronic, long-term care patients as well. The number of beneficiaries receiving home health care more than doubled in the last few years, from 1.7 million in 1989 to about 3.9 million in 1996. During the same period, the average number of visits to home health beneficiaries also more than doubled, from 27 to 72. In a recent review of home health care, we found that from 1989 to 1993, the proportion of home health users receiving more than 30 visits increased from 24 to 43 percent and those receiving more than 90 visits tripled, from 6 to 18 percent, indicating that the program is serving a larger proportion of longer-term patients. Moreover, about a third of beneficiaries receiving home health care did not have a prior hospitalization, another possible indication that care for chronic conditions is being provided. Similarly, the number of people receiving care from SNFs has also almost doubled, from 636,000 in 1989 to 1.1 million in 1996. While the average length of a Medicare-covered SNF stay has not changed much during that time, the average Medicare payment per day has almost tripled—from $98 in 1990 to $292 in 1996. Use of ancillary services, such as physical and occupational therapy, has increased dramatically and accounts for most of the growth in per-day cost. For example, our analysis of 1992 through 1995 SNF cost reports shows that reported ancillary costs per day have increased 67 percent, from $75 per day to $125 per day, while reported routine costs per day have increased only 20 percent, from $123 to $148. Unlike routine costs, which are subject to limits, ancillary services are only subject to medical necessity criteria, and Medicare does relatively little review of their use. Moreover, SNFs can cite high ancillary service use to justify an exception to routine service cost limits, thereby increasing payments for routine services. 1994, patients with any of 12 DRGs commonly associated with posthospital SNF use had 4- to 21-percent shorter stays in hospitals with SNF units than patients with the same DRGs in hospitals without SNF units. Additionally, by owning a SNF, hospitals can increase their Medicare revenues through receipt of the full DRG payment for patients with shorter lengths of stay and a cost-based payment after the patients are transferred to the SNF. The availability of inpatient rehabilitation beds has also increased dramatically. Between 1986 and 1994, the number of Medicare-certified rehabilitation facilities grew from 545 to 1,019, an 87-percent increase. A major portion of this growth represents the increase in rehabilitation units located in PPS hospitals, which went from 470 to 824 over the same period. Inpatient rehabilitation admissions for Medicare beneficiaries increased from 2.9 per 1,000 in 1986 to 7.2 per 1,000 in 1993, or 148 percent. Some of this increase in beneficiary use was due to increases in the number of acute-care admissions that often lead to use of rehabilitation facilities. For example, the DRG that includes hip replacement grew from 218,000 discharges during fiscal year 1989 to 344,000 in fiscal year 1995. For the same DRG, average length of stay in acute-care hospitals decreased from 12 to 6.7 days over that period. As was the case with SNFs, beneficiaries admitted to rehabilitation units in 1994 following a stay in an acute-care hospital had shorter average lengths of stay than beneficiaries admitted to rehabilitation hospitals. They also had shorter stays in the acute-care hospital. Moreover, the same scenario that applies to hospital-based SNFs applies to rehabilitation units. The quicker that hospitals discharge a patient to the rehabilitation unit, the lower that patient’s acute-care costs are. By having a rehabilitation unit, hospitals can increase their Medicare revenues through receipt of the full DRG payment for patients with shorter lengths of stay and a cost-based payment after the patients are admitted to rehabilitation. Rapid growth in SNF and home health expenditures has been accompanied by decreased, rather than increased, funding for program safeguard activities. For example, our March 1996 report found that part A contractor funding for medical review had decreased by almost 50 percent between 1989 and 1995. As a result, while contractors had reviewed over 60 percent of home health claims in fiscal year 1987, their review target had been lowered by 1995 to 3.2 percent of all claims (or sometimes, depending on available resources, to a required minimum of 1 percent). We found that a lack of adequate controls over the home health program, such as little intermediary medical review and limited physician involvement, makes it nearly impossible to know whether the beneficiary receiving home health care qualifies for the benefit, needs the care being delivered, or even receives the services being billed to Medicare. Also, because of the small percentage of claims now selected for review, home health agencies that bill for noncovered services are less likely to be identified than they were 10 years ago. Similarly, the low level of review of SNF services makes it difficult to know whether the recent increase in ancillary service use is legitimate (for example, because patient mix has shifted toward those who need more services) or is simply a way for SNFs to get more revenues. Medicare’s peer review organization (PRO) contractors have responsibility for oversight of Medicare inpatient rehabilitation hospitals and units from both utilization and quality-of-care perspectives. However, the PROs’ emphasis has changed in recent years, with a greater focus on quality reviews and less emphasis on case review. In fact, the current range of work for PROs requires no specific review for the appropriateness of inpatient rehabilitation use. Finally, because relatively few resources have been available for auditing end-of-year provider cost reports, HCFA has little ability to identify whether home health agencies, SNFs, and rehabilitation facilities are charging Medicare for costs unrelated to patient care or other unallowable costs. Because of the lack of adequate program controls, it is quite possible that some of the recent increase in home health, SNF, and rehabilitation facility expenditures stems from abusive practices. The Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191), also known as the Kassebaum-Kennedy Act, has increased funding for program safeguards. However, per-claim expenditures will remain below the level they were in 1989, after adjusting for inflation. We project that, in 2003, payment safeguard spending as authorized by Kassebaum-Kennedy will be just over one-half of the 1989 per-claim level, after adjusting for inflation. The goal in designing a PPS is to ensure that providers have incentives to control costs and that, at the same time, payments are adequate for efficient providers to furnish needed services and at least recover their costs. If payments are set too high, Medicare will not save money and cost-control incentives can be weak. If payments are set too low, access to and quality of care can suffer. In designing a PPS, selection of the unit of service for payment purposes is important because the unit used has a strong effect on the incentives providers have for the quantity and quality of services they provide. Taking into account the varying needs of patients for different types of services—routine, ancillary, or all—is also important. A third important factor is the reliability of the cost and utilization data used to compute rates. Good choices for unit of service and cost coverage can be overwhelmed by bad data. We understand that the administration will propose a SNF PPS that would pay per diem rates covering all facility cost types and that payments would be adjusted for differences in patient case mix. Such a system is expected to be similar to HCFA’s ongoing SNF PPS demonstration project that is testing the use of per diem rates adjusted for resource need differences using the Resource Utilization Group, version III (RUG-III) patient classification system. This project was recently expanded to include coverage of ancillary costs in the prospective payment rates. An alternative to the proposal’s choice of a day of care as the unit of service is an episode of care—the entire period of SNF care covered by Medicare. While substantial variation exists in the amount of resources needed to treat beneficiaries with the same conditions when viewed from the day-of-care perspective, even more variation exists at the episode-of-care level. Resource needs are less predictable for episodes of care. Moreover, payment on an episode basis may result in some SNFs inappropriately reducing the number of covered days. Both factors make a day of care the better candidate for a PPS unit of service. Furthermore, the likely patient classification system, RUG-III, is designed for and being tested in a per diem PPS. On the other hand, a day-of-care unit gives few, if any, incentives to control length of stay, so a review process for this purpose would still be needed. The states and HCFA have a lot of experience with per diem payment methods for nursing homes under the Medicaid program, primarily for routine costs but also, in some cases, for total costs. This experience should prove useful in designing a per diem Medicare PPS. services, particularly therapy services. This, in turn, means that it is important to give SNFs incentives to control ancillary costs, and including them under PPS is a way to do so. However, adding ancillary costs does increase the variability of costs across patients and places additional importance on the case-mix adjuster to ensure reasonable and adequate rates. Turning to the adequacy of HCFA’s databases for SNF PPS rate-setting purposes, our work, and that of the Department of Health and Human Services’ (HHS) Inspector General, has found examples of questionable costs in SNF cost reports. For example, we found extremely high charges for occupational and speech therapy with no assurance that cost reports reflected only allowable costs. Cost-report audits are the primary means available to ensure that SNF cost reports reflect only allowable costs. However, the resources expended on auditing cost reports have been declining in relation to the number of SNFs and SNF costs for a number of years. The percentage of SNFs subjected to field audits has decreased as has the extent of auditing done at the facilities that are audited. Under these circumstances, we think it would be prudent for HCFA to do thorough audits of a projectable sample of SNF cost reports. The results could then be used to adjust cost-report databases to remove the influence of unallowable costs, which would help ensure that inflated costs are not used as the base for PPS rate setting. The summary of the administration’s proposal for a home health PPS is very general, saying only that a PPS for an appropriate unit of service would be established in 1999 using budget neutral rates calculated after reducing expenditures by 15 percent. HCFA estimates that this reduction will result in savings of $4.7 billion over fiscal years 1999 through 2002. period of time such as 30 or 100 days as the unit of service has a greater potential for controlling costs. However, agencies could gain by reducing the number of visits during that period, potentially lowering quality of care. If an episode of care is chosen as the unit of service, HCFA would need a method to ensure that beneficiaries receive adequate services and that any reduction in services that can be accounted for by past overprovision of care does not result in windfall profits for agencies. In addition, HCFA would need to be vigilant to ensure that patients meet coverage requirements, because agencies would be rewarded for increasing their caseloads. HCFA is currently testing various PPS methods and patient classification systems for possible use with home health care, and the results of these efforts may shed light on how to best design a home health PPS. We have the same concerns about the quality of HCFA’s home health care cost-report databases for PPS rate-setting purposes that we do for the SNF database. Again, we believe that adjusting the home health databases, using the results of thorough cost-report audits of a projectable sample of agencies, would be wise. We are also concerned about the appropriateness of using current Medicare data on visit rates to determine payments under a PPS for episodes of care. As we reported in March 1996, controls over the use of home health care are virtually nonexistent. Operation Restore Trust, a joint effort by federal and state agencies in several states to identify fraud and abuse in Medicare and Medicaid, found very high rates of noncompliance with Medicare’s coverage conditions in targeted agencies. For example, in a sample of 740 beneficiaries drawn from 43 home health agencies in Texas and 31 in Louisiana that were selected because of potential problems, some or all of the services received by 39 percent of the beneficiaries were denied. About 70 percent of the denials were because the beneficiary did not meet the homebound definition. Although these are results from agencies suspected of having problems, they illustrate that substantial amounts of noncovered care are likely to be reflected in HCFA’s home health care utilization data. For these reasons, it would also be prudent for HCFA to conduct thorough on-site medical reviews of a projectable sample of agencies to give it a basis to adjust utilization rates for purposes of establishing a PPS. detailing a model for a PPS is currently undergoing review. The research was directed at designing a per-episode payment system adjusted for case mix, using a measure of patient functional status—for example, the patient’s mobility—as the adjuster. In general, this and other research has shown that patients in the rehabilitation facilities are more homogeneous than those in SNFs or home health care. Because the goals for the care are also more homogeneous and defined, an episode may be a reasonable choice for a unit of service. Again, the per-episode payment should be structured to reduce the incentives for premature discharge, and adequate review mechanisms to prevent such discharges and other quality problems would be needed. As with SNFs and home health care, we have concerns about the reliability of HCFA’s databases for rate-setting purposes for rehabilitation hospitals because of the low levels of utilization review and cost-report auditing. As we stated earlier, HCFA should do enough audits and medical review to enable it to adjust its databases to remove the effects of any problems. HCFA would also need an adequate review system under a PPS because rehabilitation facilities would probably have incentives to increase their caseloads, cut corners on quality, or both. HCFA is not currently studying a PPS for long-term care hospitals. Rather, the administration is proposing that any hospitals that newly qualify for long-term care status be paid under the regular inpatient hospital PPS. Also, HCFA officials told us that the agency plans to recommend in the future a coordinated payment system for post-acute care and that long-term care hospitals are being considered for inclusion under such a payment system. I will discuss the coordinated payment concept later in this statement. The administration has also announced that it will propose requiring SNFs to bill Medicare directly for all services provided to their beneficiary residents except for physician and some practitioner services. We support this proposal as we did in a September 1995 letter to the House Ways and Means Committee. We and the HHS Inspector General have reported on problems, such as overutilization of supplies, that can arise when suppliers bill separately for services for SNF residents. help prevent duplicate billings for supplies and services and billings for services not actually furnished by suppliers. In effect, outside suppliers would have to make arrangements with SNFs under such a provision so that nursing homes would bill for suppliers’ services and would be financially liable and medically responsible for the care. There can be considerable overlap in the types of services provided and the types of beneficiaries that are treated in each of the three post-acute care settings. For example, physical therapy and other rehabilitation services can be provided by a SNF, a home health agency, or a rehabilitation facility. Both HCFA and the prospective payment assessment commission (ProPAC) have noted that the ability to substitute care among post-acute settings may contribute to inappropriate spending growth, even after payment policies are improved for individual provider types.Although prospective payment encourages providers to deliver care more efficiently, facility-specific payments may encourage them to lower their costs by shifting services to other settings. The administration has therefore announced that it will in the future recommend a coordinated payment system for post-acute care services. Such a system will be designed to help ensure that beneficiaries receive quality care in the appropriate settings, and that any patient transfers among settings occur only when medically appropriate rather than in efforts to generate additional revenues. While no details are available about how a coordinated post-acute payment system would operate, presumably it will entail consolidated (bundled) payments to one entity for the different types of providers. In fact, ProPAC has suggested a system that bundles acute and post-acute payments. One of the most important design issues in a bundled payment approach is deciding which provider would receive the payment. Because this provider would have to organize and oversee the continuum of services for beneficiaries, it would bear the risk that payments would not cover costs. Options for this role include an acute-care hospital, a post-acute care provider, or a provider service network. care utilization needs to be accurately predicted to ensure that prospective rates are adequate to cover costs but also give an incentive to provide cost-effective care. Bundling acute and post-acute care would have a number of potential advantages and disadvantages. Optimally, bundling of payments would encourage continuity of care. If, for example, the inpatient hospital has a greater stake in the results, bundling could lead to both better discharge planning as well as improved transfer of information from the hospital to the post-acute provider. Bundling payments to the hospital could also eliminate a PPS hospital’s financial incentive to discharge Medicare patients before they are ready, because patients discharged prematurely may require extensive post-acute services for which the hospital is liable. Furthermore, bundling with an appropriate payment rate would give providers more incentive to furnish the mix of inpatient and posthospital services that yield the least costly treatment of an entire episode of care and thus help control growth in the volume of post-acute services. Finally, to the extent that the bundling arrangement promotes joint accountability, combining responsibility for hospital and post-acute providers could lead to better outcomes. There are a number of potential disadvantages as well. Because bundled payments would represent some level of financial risk, whoever received the bundled payment would need to have the resources to accept the risk. Moreover, bearing risk often gives incentive to shift the risk to others and raises concerns about quality. A key to the success of any bundling system is coordinating care and continuously monitoring a patient during the entire episode. However, some providers might not have the capabilities to do this. For example, if, as ProPAC has suggested, both acute- and post-acute care were bundled and if hospitals received the bundled payment, some hospitals might not have the resources, information, or expertise to properly manage patients’ post-acute care. The same could be said for SNFs and home health agencies. An additional concern is that whoever received the bundled payment could have dominance over the other providers and make choices about acute- and post-acute care settings that are driven primarily by concerns about cost. For example, hospitals might try to maximize their profit by limiting post-acute services or be tempted to screen admissions to avoid patients with high risks of heavy posthospital care. fall into this category. A bundled payment system would not affect home health agency incentives for such patients. Finally, beneficiary advocacy groups have expressed concern about potential harmful effects of this system on patients’ freedom of choice and how the quality and appropriateness of care could be ensured. In conclusion, it is clear from the dramatic cost growth for SNF, home health, and rehabilitation facility care that the current Medicare payment mechanisms for the providers need to be revised. As more details concerning the administration’s or others’ proposals for revising those systems become available, we would be glad to work with the Committee and others to help sort out the potential implications of suggested revisions. This concludes my prepared remarks, and I will be happy to answer any questions. For more information on this testimony, please call William Scanlon on (202) 512-7114 or Thomas Dowdal, Senior Assistant Director, on (202) 512-6588. Other major contributors include Patricia Davis, Roger Hultgren, and Sally Kaplan. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | GAO discussed Medicare's skilled nursing facility (SNF), home health care, and inpatient rehabilitation benefits and the administration's forthcoming legislative proposals related to them. GAO noted that: (1) Medicare's SNF costs have grown primarily because a larger portion of beneficiaries use SNFs than in the past and because of a large increase in the provision of ancillary services; (2) for home health care costs, both the number of beneficiaries and the number of services used by each beneficiary have more than doubled; (3) although the average length of stay has decreased for inpatient rehabilitation facilities, a larger portion of Medicare beneficiaries use them now, which results in cost growth; (4) the administration's major proposals for both SNFs and home health care are designed to to give the providers of these services increased incentives to operate efficiently by moving them from a cost reimbursement to a prospective payment system; (5) what remains unclear about these proposals is whether an appropriate unit of service can be defined for calculating prospective payments and whether the Health Care Financing Administration's data bases are adequate for it to set reasonable rates; (6) administration officials also have discussed their intention to propose in the future a coordinated payment system for post-acute care as methods to give providers efficiency incentives; (7) these concepts have appeal, but GAO has concerns about them similar to those it has for SNF and home health prospective payments; (8) finally, the administration is proposing that SNFs be required to bill for all services provided to their Medicare residents rather than allowing outside suppliers to bill; and (9) this latter proposal has merit because it would make control over the use of ancillary services significantly easier. |
The life of a sex worker may not be glamorous, but Boston’s prostitutes are raking in the dough, comparatively.
According to The Economist, Boston’s female escorts earn an average of $370 an hour—more than any other city listed.
That’s more than San Francisco ($360), Seattle ($350), Atlanta ($320), New York, and Los Angeles (both about $315). And much more than Chicago’s $270, the lowest US. city listed. The lowest city overall, at just under $160 an hour, was Tokyo. Boston’s average was also better than the worldwide average of about $260 an hour.
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The Economist based its data on an analysis of almost 200,000 profiles on an “international review site.” The magazine wouldn’t disclose the site’s name, saying it was “not willing to be identified” and that while the site said its listings were fictional, the Economist was operating under “the assumption that they are informative all the same.” So it’s not the best data source ever, but it’s not like there’s a verified worldwide database for prostitute prices the Economist could have used.
Before you take your $370 and look for some adult fun, bear in mind that prostitution is illegal—and that police in this city are actively looking for Johns to arrest. Last month, the Boston Police Department took part in the “National Day of Johns Arrests,” a nationwide program that targets the people who solicit prostitutes rather than the prostitutes themselves. Sgt. Michael McCarthy told Boston.com that the BPD made “several arrests,” and focused on “street level, on-line and hotel prostitution.”
In June, the BPD announced it was partnering with a Cambridge-based advocacy group to try to reduce the demand for prostitutes by 20 percent, in the hopes that this will also reduce the supply. A 2011 human trafficking law increased penalties for those convicted of soliciting prostitutes to up to 2 1/2 years in jail and a fine between $1,000 and $5,000 (though, as The Boston Globe points out, this law was not being enforced as of December 2013).
If you think $370 an hour is pricey, try a few months in jail. ||||| THE ECONOMIST analysed 190,000 profiles of female sex workers on websites where customers post reviews. The data cover 84 cities in 12 countries, with the biggest number of workers in America and most of the rest in big cities in rich countries. According to the analysis, the price of an hour of sex with a female prostitute has been dropping fairly steadily in recent years. In 2006 the average cost was around $340. By 2014 it had dropped to about $260.
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A prostitute’s hourly rate depends on a variety of factors, including the services she provides and her reported physical characteristics. Those who conform most closely to the stereotypical version of Western beauty—slim, with long blonde hair and full breasts—earn the most. Those who provide niche services—for example, sex workers who will accept two male clients at once—also command a premium. Location matters too. Prostitutes in San Francisco, where the cost of living is high, charge more than those in cheaper cities such as Prague.
The fall in prices can be attributed in part to the 2007–08 financial crisis. Even places that have escaped its worst effects, such as London, have been hit. In cities such as Cleveland, Ohio, where unemployment peaked at 12.5% in 2010, prices have plummeted. Migration is also driving down prices. Big, rich cities, such as London, attract a steady inward flow of poorer migrants, who are prepared to do all kinds of work for lower wages than locals. In places such as Norway, where local prostitutes had tried to standardise prices, growing numbers of migrant sex workers have made such unofficial price controls harder to sustain. The increase in people selling sex online—where it is easier to be anonymous—has probably boosted local supply. Meanwhile broader social changes may have reduced demand. Casual and adulterous sex is easier to find than in the past. Pre-marital sex is more acceptable and divorce easier, with the result that fewer frustrated single and married men turn to prostitutes. That drives prices down, too.
Sex workers complain that they are earning less than in the past. But their incomes may not have fallen as steeply as the decline in prices would suggest. The shift towards advertising and co-ordinating the sale of sex online means that prostitutes now rely less on intermediaries, such as brothels and agencies, pimps and madams. As a result, they may be able to keep a greater proportion of their income. But selling sex online brings new demands. Clients contact sex workers via their websites, by e-mail, through Facebook and Twitter. Some websites allow prostitutes to tell clients whether they are currently available; but that means going online frequently to update their status. Such work is time-consuming, so some prostitutes may end up paying someone to do it for them. For sex workers, as much as anyone, time really is money.
Dig deeper:
Why governments should stop trying to ban prostitution (August 2014)
How the internet is shaking up the oldest business (August 2014)
A sex worker explains why criminalisation is bad for her industry (August 2014)
Update: This blog post has been amended to remove the news peg. ||||| WARNING: We rarely feel the need to alert readers to explicit content. But our discussion of the online sex trade requires frank language, and some may find the topic distasteful.
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FOR those seeking commercial sex in Berlin, Peppr, a new app, makes life easy. Type in a location and up pops a list of the nearest prostitutes, along with pictures, prices and physical particulars. Results can be filtered, and users can arrange a session for a €5-10 ($6.50-13) booking fee. It plans to expand to more cities.
Peppr can operate openly since prostitution, and the advertising of prostitution, are both legal in Germany. But even where they are not, the internet is transforming the sex trade. Prostitutes and punters have always struggled to find each other, and to find out what they want to know before pairing off. Phone-box “tart cards” for blonde bombshells and leggy señoritas could only catch so many eyes. Customers knew little about the nature and quality of the services on offer. Personal recommendations, though helpful, were awkward to come by. Sex workers did not know what risks they were taking on with clients.
Now specialist websites and apps are allowing information to flow between buyer and seller, making it easier to strike mutually satisfactory deals. The sex trade is becoming easier to enter and safer to work in: prostitutes can warn each other about violent clients, and do background and health checks before taking a booking. Personal web pages allow them to advertise and arrange meetings online; their clients’ feedback on review sites helps others to proceed with confidence.
Even in places such as America, where prostitution and its facilitation are illegal everywhere except Nevada, the marketing and arrangement of commercial sex is moving online. To get round the laws, web servers are placed abroad; site-owners and users hide behind pseudonyms; and prominently placed legalese frames the purpose of sites as “entertainment” and their content as “fiction”.
The shift online is casting light on parts of the sex industry that have long lurked in the shadows. Streetwalkers have always attracted the lion’s share of attention from policymakers and researchers because they ply their trade in public places. They are more bothersome for everyone else—and, because they are the most vulnerable, more likely to come to the attention of the police and of social or health workers. But in many rich countries they are a minority of all sex workers; just 10-20% in America, estimates Ronald Weitzer, a sociologist at George Washington University.
The wealth of data available online means it is now possible to analyse this larger and less examined part of the commercial-sex market: prostitution that happens indoors. It turns out to be surprisingly similar to other service industries. Prostitutes’ personal characteristics and the services they offer influence the prices they charge; niche services attract a premium; and the internet is making it easier to work flexible hours and to forgo a middleman.
Websites such as AdultWork allow prostitutes, both those working independently and those who work through agencies and brothels, to create profiles through which customers can contact them. They can upload detailed information about themselves, the range of services they provide, and the rates they charge. Clients can browse by age, bust or dress size, ethnicity, sexual orientation or location.
Other websites garner information from clients, who upload reviews of the prostitutes they have visited with details of the services offered, prices paid and descriptions of the encounters. On PunterNet, a British site, clients describe the premises, the encounter and the sex worker, and choose whether to recommend her. Such write-ups have enabled her to build a personal brand, says one English escort, Michelle (like many names in this article, a pseudonym), and to attract the clients most likely to appreciate what she offers.
TrickAdvisor
We have analysed 190,000 profiles of sex workers on an international review site. (Since it is active in America, it was not willing to be identified for this article. A disclaimer on the site says the contents are fictional; we make the assumption that they are informative all the same.) Each profile includes customers’ reviews of the worker’s physical characteristics, the services they offer and the price they charge.
The data go back as far as 1999. For each individual we have used the most recent information available, with prices corrected for inflation. Some of those featured may appear under more than one name, or also work through agencies. The data cover 84 cities in 12 countries, with the biggest number of workers being in America and most of the rest in big cities in other rich countries. As this site features only women, our analysis excludes male prostitutes (perhaps a fifth of the commercial-sex workforce). Almost all of those leaving reviews are men.
The most striking trend our analysis reveals is a drop in the average hourly rate of a prostitute in recent years (see chart 1). One reason is surely the downturn that followed the 2007-08 financial crisis. Even prostitutes working in places that escaped the worst effects have been hit. Vanessa, a part-time escort in southern England, finds that weeks can go by without her phone ringing. Men see buying sex as a luxury, she says, and with the price of necessities rising it is one they are cutting back on. Even when she offers discounts to whip up interest, clients are scarcer than they were. In places where the job market slumped, the effect is more marked (whether prostitution is legal may affect prices, too, but the wide variation between American cities shows that this is not the only factor). The cost of an hour with an escort in Cleveland, Ohio, where unemployment peaked at 12.5% in 2010, has tumbled.
Large-scale migration is another reason prices are falling. Big, rich cities are magnets for immigrants of all professions, including sex workers. Nick Mai of London Metropolitan University has studied foreign sex workers in Britain. He has found that as they integrate and get used to the local cost-of-living, their rates tend to rise. But where the inward flow is unceasing, or where the market was previously very closed, immigrants can push prices down.
Since the European Union enlarged to include poorer eastern European countries, workers of every sort have poured into their richer neighbours. By all accounts prices have been dropping in Germany as a result of the arrival of new, poor migrants, says Rebecca Pates of the University of Leipzig. Sally, a semi-retired British escort who runs a flat in the west of England where a few “mature” women sell sex, says English girls are struggling to find work: there are too many eastern European ones willing to accept less.
Twenty years ago most prostitutes in Norway were locals who all aimed to charge about the same, says May-Len Skilbrei, a sociologist at Oslo University. Today, with growing numbers of sex workers from the Baltic states and central Europe, as well as Nigerians and Thais, such unofficial price controls are harder to sustain.
Inexperience is another reason newcomers to prostitution may underprice themselves, at least at first. Maxine Doogan, an American prostitute and founder of the Erotic Service Providers Union, a lobby group, learnt her trade from a woman who worked for years in a brothel in Nevada, the only American state where prostitution is legal. The older woman taught her what to regard as standard or extra, and how much to charge. When Ms Doogan started out, in 1988, standard services (vaginal sex and fellatio) cost $200 an hour, the equivalent of $395 today. But some of those starting out now still charge $200, she says, or offer extra services, including risky ones such as oral sex without a condom, without charging an appropriate premium.
The shift online has probably boosted supply by drawing more locals into the sex trade, too. More attractive and better-educated women, whose marital and job prospects are therefore better, are more likely to consider sex work if it is arranged online. Indoor sex work is safer than streetwalking, and the risk of arrest is lower. Rented flats or hotel rooms are more discreet than brothels, so family and friends are less likely to identify the new source of income. Anonymity becomes a possibility, which lessens the fear of stigma. Creating an online profile separates the decision to take up the work from parading for punters.
Meanwhile, broader social change may be reducing demand—and thus, prices. Free, no-strings-attached sex is far easier to find than in the past. Apps such as Tinder facilitate speedy hookups; websites such as Ashley Madison and Illicit Encounters, adulterous ones. Greater acceptance of premarital intercourse and easier divorce mean fewer frustrated single and married men turning to prostitutes.
Dearer for johns
Our analysis shows how a prostitute’s hourly rate varies according to the nature of the services she provides and her reported physical characteristics. As in other bits of the economy, clients who seek niche services must pay more. Sex workers who offer anal sex or spanking earn on average $25 or $50 more per hour, respectively (see chart 2). Those who will accept two male clients at once or do threesomes with another woman command a larger premium.
Appearance matters a great deal. The customers who reported encounters to the website we analysed clearly value the stereotypical features of Western beauty: women they describe as slim but not scrawny, or as having long blonde hair or full breasts, can charge the highest hourly rates (see chart 3). Hair that is bleached too unconvincingly to be described as blonde attracts a lower premium, but is still more marketable than any other colour. For those not naturally well endowed, breast implants may make economic sense: going from flat-chested to a D-cup increases hourly rates by approximately $40, meaning that at a typical price of $3,700, surgery could pay for itself after around 90 hours. The 12% share of women featured on the site who are described both as athletic, slim or thin, and as being at least a D-cup, suggests that quite a few have already taken this route.
A prostitute’s rates also vary according to her ethnicity and nationality. What attracts a premium in one place can attract a penalty in another. According to our analysis, in four big American cities and London, black women earn less than white ones (see chart 4).
We had too few data from other cities for a reliable breakdown by ethnicity. But Christine Chin of the American University in Washington, DC, has studied high-end transnational prostitutes in several countries. In Kuala Lumpur, she found, black women command very high rates and in Singapore, Vietnamese ones do. In Dubai, European women earn the most. What counts as exotic and therefore desirable varies from place to place, and depends on many factors, such as population flows.
Local markets have other quirks. According to the site we analysed, an hour with an escort in Tokyo is a bargain compared with one in London or New York. Yet a cost-of-living index compiled by the Economist Intelligence Unit, our sister organisation, suggests that Tokyo is the most expensive city overall of the three. The apparent anomaly may be because escorts who appear on an English-language review site mostly cater to foreigners, who are not offered the more unusual—and expensive—services Japanese prostitutes provide for locals. These include the bubble baths and highly technical massages of Sopurando (“Soapland”), a red-light district in Tokyo, which can cost ¥60,000 ($600) for a session and involve intercourse (although that is not advertised).
A degree appears to raise earnings in the sex industry just as it does in the wider labour market. A study by Scott Cunningham of Baylor University and Todd Kendall of Compass Lexecon, a consultancy, shows that among prostitutes who worked during a given week, graduates earned on average 31% more than non-graduates. More lucrative working patterns rather than higher hourly rates explained the difference. Although sex workers with degrees are less likely to work than others in any given week (suggesting that they are more likely to regard prostitution as a sideline), when they do work they see more clients and for longer. Their clients tend to be older men who seek longer sessions and intimacy, rather than a brief encounter.
How much brothels and massage parlours use the internet depends on local laws. America’s legal restrictions mean that they keep a low profile, both offline and online. In Britain, where brothels are illegal though prostitution is not, massage parlours advertise the rotas and prices of their workers online but are coy about the services rendered. By contrast Paradise, a mega-brothel in Germany, boasts a frank and informative website.
But it is independent sex workers for whom the internet makes the biggest difference. Mr Cunningham has tracked the number of sex workers in American cities on one review site. In the decade to 2008, during which online advertising for commercial sex took off, the share describing themselves as independent grew.
For prostitutes, the internet fulfils many of the functions of a workplace. It is a “break-room and hiring hall”, says Melissa Gira Grant, the author of “Playing the Whore: The Work of Sex Work”. Online forums replace the office water-cooler. Women exchange tips on dealing with the everyday challenges of sex work; a busy thread on one forum concerns which sheets stand up best to frequent washing.
A mother in Scotland asks how other prostitutes juggle child care and selling sex, given that bookings are often made at short notice so babysitters are hard to arrange. Another contributor who is thinking of having children asks how much other women saved before taking time off to have a baby, and whether the new calls on their time meant they earned less after giving birth. One reply points out that prostitution is easier than many other jobs to combine with motherhood: it pays well enough to cover child-care costs, and can be fitted around school holidays, plays and sports days, and children’s illnesses.
Women who are considering entering the industry often seek advice online from those already in it before making up their minds. Melanie, who earns £65,000 ($109,000) a year, says that she is considering selling sex on the side for a few months to pay off debts. She asks which agency to use and how to get the highest rate. But she also worries that a stint selling sex would harm her future career. Experienced sex workers respond that anonymity will be easier to preserve if she works independently, rather than through an agency, and warn her that she is entering a crowded market. The stress of living a double life should not be underestimated, they caution, and it will not be easy money.
Many of those contributing to such discussions hold other jobs, often part-time, and tout the merits of a steady source of additional income and something innocuous to put on a CV. Sarah says her escort work means she can pay for her daughter’s dance and music lessons, which would be unaffordable on just her “civvy job”. Some husbands and boyfriends know about their wives’ and girlfriends’ work, or even act as managers, drivers and security. Other women keep what they do a secret from those closest to them.
Advertising and booking clients online give prostitutes flexibility about where to work. They can “tour”, using their own home pages or profiles on specialist websites to advertise where they will be and when. In densely populated Britain, where prostitutes work in most places, tours allow those who normally serve small towns to visit cities crammed with potential customers. In Norway, says Ms Skilbrei, prostitutes are concentrated in the main cities, so a tour is a chance to satisfy pent-up demand in small towns.
The freelancers, part-timers and temps the internet is bringing to the sex trade are likely to help it absorb demand shocks. In 2008 the Republican and Democratic national conventions were held in Minneapolis and Denver respectively. Around 50,000 visitors flocked to each city. Another study by Mr Cunningham and Mr Kendall found that the numbers of advertisements for sex on the now-defunct “erotic services” section of Craigslist, a classified-advertising site, were 41% higher in Minneapolis and 74% higher in Denver around the conventions than expected for those days of the week and times of year.
Health and safety
Sex work exposes those who do it to serious risks: of rape and other violence, and of sexually transmitted infections. But in this industry, like many others, the internet is making life easier.
Online forums allow prostitutes to share tips about how to stay safe and avoid tangling with the law. Some sites let them vouch for clients they have seen, improving other women’s risk assessments. Others use services such as Roomservice 2000, another American site, where customers can pay for a background check to present to sex workers. Both sides benefit since the client can demonstrate trustworthiness without giving credit-card details or phone numbers to the prostitute.
Sites that are active in restrictive jurisdictions must be careful not to fall foul of the law. In June the FBI shut down MyRedBook, an advertising-and-review site with a chat section for sex workers. Its owners face charges of money laundering and facilitating prostitution. American police sometimes use such sites to entrap prostitutes. As they wise up to this, sex workers are using sites that allow them to verify clients’ identities to help them avoid stings. But that adds unnecessary hassle and distracts from what should be most important: staying safe. “Screening for cops [is now] the priority over screening for rapists, thieves, kidnappers,” says Ms Doogan.
In Britain, Ugly Mugs runs an online database that prostitutes can use to check punters’ names and telephone numbers. In America the National Blacklist, a “deadbeat registry”, allows them to report men who are abusive or fail to pay. Other women can check potential clients by names, telephone numbers, e-mail addresses and online aliases. Though not specifically aimed at sex workers, apps such as Healthvana make it easy for buyer and seller to share verified results in sexual-health tests.
Moving online means prostitutes need no longer rely on the usual intermediaries—brothels and agencies; pimps and madams—to drum up business or provide a venue. Some will decide to go it alone. That means more independence, says Ana, a Spanish-American erotic masseuse who works in America and Britain. It also means more time, effort and expertise put into marketing. “You need a good website, lots of great pictures, you need to learn search-engine optimisation…it’s exhausting at times,” she says.
Leaving the streets behind
Others will still prefer to have a manager or assistant to take care of bookings and social media. “[Nowadays] you have people hitting you up on Twitter, Facebook, your website, and e-mail,” says Ms Doogan. Eros.com, an international listings site, allows prostitutes to tell clients whether they are currently available. But it means going online every hour or two, which is a chore. And online advertising is not cheap. Ms Doogan used to spend 10% of her income on print adverts; she spends far more on online ones because with so many people advertising, returns are lower. Checking customers’ bona fides also takes time.
Meanwhile some traditional forms of prostitution are struggling. In the decade to 2010 the number of licensed sex clubs in the Netherlands fell by more than half, according to a study for Platform31, a Dutch research network. Much of the decline will have been offset by the growth of sex work advertised online, it reckons. Many prostitutes would rather work from private premises than in a club or for an agency, says Sietske Altink, one of the authors. Dutch municipalities often bar such work—but the option of finding clients online makes such rules harder to enforce.
That shift will make the sex industry harder for all governments to control or regulate, whether they seek to do so for pragmatic or moralistic reasons, or out of concern that not all those in the industry are there by their own free will. Buyers and sellers of sex who strike deals online are better hidden and more mobile than those who work in brothels, or from clubs or bars, points out Professor Weitzer of George Washington University. Ireland has banned the advertising of sexual services since 1994. The prohibition has achieved almost nothing, says Graham Ellison, a sociologist at Queen’s University in Belfast. Websites simply moved to other jurisdictions. The closure of those such as MyRedBook may prompt American ones to do the same; as they grow more specialised, the excuse that they merely host classified advertisements is wearing thin.
In the long term there will always be people who, for whatever reason, want to hire a prostitute rather than do without sex or pick up a partner in a bar. As paid-for sex becomes more readily and discreetly available online, more people will buy it. A greater awareness may develop that not all sex workers are the victims of exploitation. The very discretion—and the hidden nature of such prostitution—may also mean that the stigma persists. But, overall, sex workers will profit. The internet has disrupted many industries. The oldest one is no exception. | Female sex workers' prices seem to be dropping, the Economist finds: A 12-country study of prostitute-review websites shows that an hour of sex today costs a customer about $260, whereas in 2006 it was $340. Why is that? First off, there's the financial crisis; cities affected the most, like Cleveland, have seen a particular drop in prices. Then there's migration, the magazine notes: When a city has an influx of migrant sex workers, prices drop. Supply has also probably increased as a result of the Internet, where prostitutes can advertise without revealing their identities. What's more, with premarital sex more accepted and casual meetings more common these days, there may be fewer men seeking out prostitutes. Despite the drop in prices, however, prostitutes may not be taking such a big hit, the Economist notes. The Internet has meant less need for brothels and pimps, allowing the workers themselves to take a higher percentage of the price. What's more, some cities are still seeing 2006-level prices: Boston prostitutes, for instance, charge some $370 an hour, Boston.com notes, via the Economist, while San Francisco prostitutes charge $360 and Seattle $350. (In Hawaii, cops were only recently banned from having sex with prostitutes.) |
Paramount Pictures Fiona, Shrek and their children in 'Shrek Forever After.'
At one point in "Shrek Forever After," the amiable hero sees his face on a poster nailed to a tree and says, "Sure is great to be wanted again." Wanted, yes, but needed? Not on the strength of this fourth and presumably last installment, which is enhanced, within reason, by 3-D. Having run its course in the third installment, the franchise jogs and lurches but mostly meanders through a story that tests the limits of true love (Shrek's, and ours).
The starting point is domesticity, which isn't sitting well with Shrek at all. He has a loving wife in Fiona, and three cute kidlets (plus, of course, the benefit of Mike Myers's endearing voice), but he's undone by doing diapers and has fallen victim to the kind of toothless fame that overtook Buffalo Bill. To reclaim his inner ogre, Shrek signs a contract with Rumpelstiltskin that makes him an Ogre for a Day. But the contract dramatizes, if nothing else, the importance of reading the fine print. Before you can say "It's a Wonderful Life," Shrek is plunged into an alternate universe where he and Fiona have never met, old friends like Eddie Murphy's Donkey and Antonio Banderas's Puss in Boots don't know him and Fiona, voiced appealingly as before by Cameron Diaz, has left her castle to assume command of a guerrilla army that's resisting Rumpelstiltskin's ruthless rule.
The film, which was directed by Mike Mitchell, has its intermittent pleasures: toy-like landscapes rendered in enchanting colors; the mysterious charm of Mr. Banderas's delivery, which gets laughs from every one of his lines; a spell woven by the Pied Piper's flute in a scene reminiscent of the "Man Piaba" sequence in "Beetlejuice"; a witches' ball, followed by the witches' vertiginous pursuit of Shrek through the 3-D spaces of a palace. (It's all too easy to take computer animation for granted until a set piece like that one leaves you absolutely dazzled.)
But it's important to read the fine print in screenplays too. This one, by Josh Klausner and Darren Lemke, turns out to be a recycling machine that recalls the high points of previous installments without demonstrating the need for a new one. While there's some suspense in whether Shrek will be able to break Rumpelstilstskin's contract with an out clause that posits the power of a loving kiss, there's also a sense of filmmakers searching for whatever will help fill the running time. Ninety-three minutes isn't a long time, but some of it passes very, very slowly.
'Looking for Eric'
A string of reservations may not be the best start for an admiring review, but I want to get them out of the way so I can concentrate on what I love about Ken Loach's "Looking for Eric," which is a lot.
The first caveat comes attached to almost every Ken Loach film that plays to American audiences. The accents—mostly Lancashire in this case—demand, and sometimes defy, concentration. (This film, I should note, can be seen via video on demand through cable providers, as well as in a few big-city theaters.) The second involves a basic plot device you either do or don't buy: I bought into it quickly and happily. The third relates to an elaborate climax that's amusing, in a strenuously whimsical way, but tears the film's dramatic fabric to tatters.
Enlarge Image Close IFC Films Steve Evets as Eric Bishop and Eric Cantona as himself in 'Looking for Eric.'
There you are, then. Now let me tell you how stirring the film can be.
Its title cuts two ways, since Paul Laverty's screenplay involves two Erics. Eric Bishop, played with phenomenal intensity by Steve Evets, is a postman, and soccer fanatic, who lost his way three decades ago when he left Lily, the young woman he loved; now he's losing it again after crossing paths with her unexpectedly. Eric Cantona, played by his suave self, is a French-born footballer turned actor, though not just any footballer; in real life he achieved mythic status as the star of Manchester United. When the postman's co-workers see how desperate his state is, they conspire to cheer him up. Eric seeks more serious guidance, or inspiration, from the life-size poster of Eric Cantona that occupies a place of honor on his wall, and the other Eric responds by appearing magically, in the flesh, and dispensing life lessons couched in football terms.
That's the basic device, and it cuts at least two ways, as a witty parody of psychotherapy—"In Treatment" for the soccer set—and a strangely touching expression of the bond between a worshiper and a benign deity. Quick wit is one quality that makes the film special; another is a tenderness that grows out of the postman's grief—one of his stepsons is helping to make his life a living hell—and the depth of his love for Lily, who is played beautifully in the present by Stephanie Bishop. "Looking for Eric" is a daring and unstable mélange of styles—working-class realism, deadpan fantasy, shameless buffoonery. At times it falls flat, or fails to rise. More often than not, though, it's a heartbreaker.
In Brief
Enlarge Image Close Anchor Bay Films Michael Douglas and Susan Sarandon in 'Solitary Man.'
"Solitary Man" stars Michael Douglas as a vulgar womanizer—a girlizer, really—and a serial lecher who uses sex to avoid the twin terrors of mortality (his heart could be a lot healthier) and personal failure (he sabotaged his career as a supersuccessful car dealer). The movie, which was written by Brian Koppelman and directed by Mr. Koppelman and David Levien, seems to view its antihero, Ben Kalmen, as a kind of upscale Willy Loman. Yet he's so dislikable, and Mr. Douglas's performance is so devoid of any saving nuance, that you may wonder why the young women Ben hits on, and the passive young man he befriends (played by Jesse Eisenberg), don't tell the aging creep to buzz off the moment he opens his mouth. "Solitary Man" intends to be shocking, and has been rewarded with some respectful reviews. But ticket buyer beware—the film's real shocker is its unpleasantness.
"Holy Rollers" is a debut feature directed by Kevin Asch. This time Jesse Eisenberg stars as Shmuel, a.k.a. Sam, a young Hasidic Jew who, thanks to restless ambition and boundless naiveté, becomes a drug courier smuggling ecstasy from Europe into the U.S. The film is said to have been inspired by a true story, but the inspiration was insufficient, even though Mr. Asch has a strong sense of place and displays a confident touch with some of the action sequences. The screenplay, by Antonio Macia, is earnest and unsurprising—not a good combination—and neither the director nor the star quite knows what to make of the quirky character inside the traditional garments that signal otherworldly innocence to customs agents.
DVD Focus 'Wallace & Gromit: The Curse of the Were-Rabbit' (2005) The first Wallace & Gromit full-length feature, a charming film from the British production team at Aardman, never caught on in this country to the extent that it deserved. This time the Claymation buddies are humane pest-control experts; their company, "Anti-Pesto," deals with a plague of rabbits by vacuuming up the little hoppers and giving them room and board. The plot, such as it is, confronts two problems: where to keep all the rabbits, and how to keep more rabbits from ravaging the produce in a Giant Vegetable Competition hosted by Lady Tottington, who is voiced by Helena Bonham Carter. 'The Wind That Shakes the Barley' (2006) Cillian Murphy is Damien, a young physician turned guerrilla fighter after being radicalized by the brutality of British troops in the thatched-roof Ireland of 1920. The director, Ken Loach, and his writer, Paul Laverty, are unsparing in their portrait of the Black and Tans, and the ruthless violence that the Republicans visit on Britain's forces. Most painful of all is the spectacle of Irish revolutionists fighting Irish turncoats. "I studied anatomy for five years, and now I'm going to shoot this guy in the head," Damien says in horror and anguish. Then the physician turned guerrilla turns executioner. 'Maria Full of Grace' (2004) A debut feature by Joshua Marston, this harrowing film centers on Maria, a young woman in Colombia who becomes a drug mule and flies to New York, at mortal risk, with heroin-filled pellets in her stomach. She's played by Catalina Sandino Moreno, a young actress, trained in her native Colombia, who brings flawless, though mainly invisible, technique to her first movie role. The drama is detailed and suspenseful, though the process through which Maria learns to swallow those deadly pellets is almost too awful to watch. Mr. Marston is a natural dramatist, and, better still, an adventurous one. Joe Morgenstern
Write to Joe Morgenstern at [email protected] ||||| Shrek Forever After ANIMATED: United States, 2010 U.S. Release Date: 2010-05-21 Running Length: 1:33 MPAA Classification: PG Theatrical Aspect Ratio: 2.35:1 Cast: (voices) Mike Myers, Eddie Murphy, Cameron Diaz, Antonio Banderas, Walt Dohrn, Jon Hamm, Craig Robinson Director: Mike Mitchell Screenplay: Josh Klausner, Darren Lemke Cinematography: Yong Duk Jhun Music: Harry Gregson-Williams U.S. Distributor: Dreamworks Animation Subtitles: none
Seen in standard (non-IMAX) 3-D.
When the first Shrek made its theatrical debut in 2001, it came accompanied by expectations normally reserved for sequels with impressive pedigrees. Unlike any previous animated endeavor, it was a magically irreverent experience whose appeal crossed age and gender barriers. Unfortunately, as is often the case with family-friendly blockbusters, it became the flagship of a merchandising fleet. Sequels followed. Shrek 2 was enjoyable but unspectacular and Shrek 3 seemed to be going through the motions. The fourth Shrek, called Shrek Forever After, is being touted as "the final chapter," and that's unsurprising. The goose's eggs have gone from gold to silver to clad. There's so little buzz about this movie that even those with bee-sting allergies need not be concerned. Still, even though Shrek Forever After is obligatory and unnecessary, it's better than Shrek 3 and it's likely that most who attend as a way of saying goodbye to the Jolly Green Ogre will not find themselves wishing they had sought out a more profitable way of spending 90-odd minutes.
It has been said that if you're going to steal, steal from the best, and the filmmakers responsible for Shrek Forever After have taken this advice to heart. The core storyline has been lifted from It's a Wonderful Life, albeit with the character of Clarence turned nastier than Mr. Potter. Shrek (voice of Mike Myers) is provided with a chance to see life flash before his eyes as it might have been had he never been born. He gets into the situation because he's upset with the mundane day-to-day routine of being an ogre who doesn't scare anyone. For one day, he wants the world to go back to a time when everything makes sense. The impish Rumplestiltskin (Walt Dohn) overhears Shrek's wish and offers to grant it. Shrek doesn't read the small print in the contract he signs and soon discovers that his existence is in danger. Fortune unites him with Donkey (Eddie Murphy), who is more than a little skeptical of Shrek's hard-to-swallow tale. To get his old life back, Shrek has to fulfill an escape clause in the contract, which requires him to find his wife Fiona (Cameron Diaz) and share a kiss of true love with her. There are a few problems. First, in this reality, Fiona is a warrior queen who has long since stopped believing in things like "true love." Second, Shrek fails to make a positive impression during their initial encounter. Finally, Rumplestiltskin also knows about the escape clause and is determined not to let Shrek and Fiona lock lips.
As It's a Wonderful Life knock-offs go, this one isn't half-bad. There's always a fascination with seeing a familiar world with recognizable characters tweaked in unexpected ways. That's one reason the 2009 Star Trek worked so well. Unfortunately, for those hoping the final Shrek would find its way back to the wellspring of pure entertainment that marked the original, it doesn't happen. In fact, the whole reason Shrek Forever After has to play the alternate reality card is because there is no place for the story to go in the "real" world. Shrek is comfortably married with children and he's leading a depressingly ordinary life.
The animation is eye catching and rich in detail but it hasn't advanced much from what graced screens in 2001. The original Shrek was widely praised for its look and apparently the goal with the sequels was not to deviate much. Despite the passage of ten years, Shrek Forever After doesn't boast a radically different style or appearance than that of Shrek, Shrek 2 or Shrek 3. It is available in 3-D, but this is one of the most uninspired and perfunctory applications of 3-D I can remember. There's nothing glaringly wrong with the 3-D version. but there's nothing right with it, either; the value added is minimal. The moments were few and far between when something other than the sensation of wearing uncomfortable glasses emphasized the 3-D aspect. So why pay the surcharge?
Although Shrek Forever After is not as funny or as impudent is its great-grandparent, some of its comedic jabs land solid blows to the funny bone. The best humor relates to Puss and Boots (Antonio Banderas), the flamboyant cat with the big, sad eyes. In the alternate reality, Puss has grown fat and flabby, and the screenplay gets plenty of mileage from this situation. Sadly, the two villains (Rumplestiltskin and his hired henchman, The Pied Piper) are lacking when it comes to generating guffaws. Rumplestiltskin is a diluted Lord Farquaad.
Even though this is officially the last Shrek movie, there's no guarantee the character is retiring. In fact, a spin-off focused on Puss in Boots is already in the work, ensuring a continuation of the incredibly profitable franchise in at least some form. Is Puss a more interesting character than Shrek? At this point, yes, but who knows in another three years? One could successfully argue that Shrek Forever After is three Shreks too many. At least the filmmakers have allowed Shrek to depart on a strong note rather than slinking away into his swamp. There might not be much reason for excitement concerning Shrek Forever After, but neither is there anything to dread. It's a perfectly acceptable family-friendly summer sequel, which is likely all the filmmakers hoped for.
Discuss this topic in the ReelViews Forums. ||||| "Feels like it's been phoned in."
Any movie franchise that reaches its fourth entry runs the risk of becoming too familiar, no longer a special event but merely another episode in a never-ending series. That's how Shrek Forever After feels. If there were a Shrek TV show, this could be the two-part finale of, say, season 3. It isn't bad. It just doesn't belong on a movie screen.
Like a long-running TV series, Shrek Forever After assumes that we're comfortable with the characters and will appreciate some twists. (In other words, if you're not a regular viewer of the Shrek sitcom, now's not the time to jump in.) Shrek (voice of Mike Myers) and Fiona (Cameron Diaz) are happily married with baby ogre triplets. Donkey (Eddie Murphy) and his family come to visit regularly. Life is pleasant.
And, it turns out, a little boring. You may recall that when Shrek learned Fiona was pregnant, in the last movie, he worried about the drudgery and stress of fatherhood. Now he is indeed fully domesticated, stuck in a rut. He's a local celebrity, beloved throughout the land. Life is good, but ... well, one can't help occasionally getting wistful for the old days, when one was a terrifying ogre with no responsibilities.
Along comes Rumpelstiltskin (Walt Dohrn), a nerdy, hyperactive little troll who grants magical wishes. He blames Shrek for ruining his chances at becoming king of Far Far Away (this is explained in a flashback) and offers him a sneaky deal. The result is that suddenly, Shrek was never born. And without him, the world is vastly different. Now old man Potter owns everything!
No, not really. I don't know how they did this without making a single It's a Wonderful Life reference, but they did. Rumpelstiltskin is king of Far Far Away, ruling with an iron fist and aided by an army of witches. Fiona and the other ogres comprise an underground resistance movement. Her pet cat, Puss in Boots (Antonio Banderas), is fat and lazy. Donkey pulls a cart for the royal palace. In this alternate universe, poor Gingerbread Man (Conrad Vernon) is a gladiator slave. Shrek must find the escape clause in his deal with Rumpelstiltskin, convince Fiona -- who doesn't like him in this reality!!! -- that she's supposed to be in love with him, and so forth.
The first animated film by director Mike Mitchell (he also made Sky High, Surviving Christmas, and TV's Greg the Bunny), Shrek Forever After moves along jauntily enough; a chase sequence on flying broomsticks is rather exciting; the pace is suitable. The screenplay, by Joshua Klausner (Date Night) and Darren Lemke, offers a handful of laugh-out-loud gags and scattered chuckles. Puss in Boots continues to steal the show. (This bodes well for his spin-off sitcom -- er, movie -- scheduled for 2011.)
But where's the edge? What's the point in telling THIS story? Shrek was a no-holds-barred parody of Disney-fied fairy tales. Shrek 2 expanded the heart and humanity of the characters. Even Shrek the Third, which wasn't great, was packed with inspired jokes. Shrek Forever After feels like it's been phoned in. Everyone's having a good time, but no one's really motivated to do anything special. It's how I imagine the producers of a sitcom would feel midway through the third season: Eh, not every episode's gonna be great, but they're all at least OK. The difference, of course, is that a so-so episode of a TV show doesn't cost 10 bucks to watch.
Grade: C+
* * * *
Eric D. Snider (website) wonders what the world would be like if Chex Mix had never been invented. ||||| Midlife crises cause some men to buy Stratocasters or dump old spouses. In the case of the fat green alpha male in Shrek Forever After, the chafe of marriage and fatherhood has led the celebrity ogre to romanticize the bad old days when he was a bachelor swamp thing who scared the populace witless. So when the devious magic-broker Rumpelstiltskin (voiced by Walt Dohrn) offers a deal that includes a day of freedom, Shrek (Mike Myers) accepts. Bad move. Rumpel is the evil twin of Clarence the good angel in It's a Wonderful Life. He effectively turns Shrek into Jimmy Stewart's George Bailey, horrified into action and repentance by the vision of what the kingdom of Far Far Away would have become had he never been born and Rumpel ruled the world.
There's a soft, middle-aged complacency to the well-oiled mechanics of Shrek Forever After, the fourth and (possibly but never say never) last episode of the now classic spoofy animated fairy tale based on William Steig's beloved 1990 children's book. The plump green princess bride Fiona (Cameron Diaz) is back, as are Shrek's motormouthed buddy Donkey (Eddie Murphy) and the suave feline Puss in Boots (Antonio Banderas). But what was once a fresh, self-referential twist on the vulturish consumption of pop culture when the first Shrek debuted in 2001 has become a lazy corporate tic. Talking over the heads of kids, the enterprise counts on adult audiences to forgive the unoriginal storytelling and, one more time, settle for the game of spot-the-reference, never mind that the references crib from the works, songs, catchphrases, and punchlines of others for their charms. (The hip-by-proxy syndrome includes a pile-on of current pop culture darlings to voice secondary characters, including Mad Men's Jon Hamm, Glee's Jane Lynch, and Craig Robinson from The Office.) Everyone involved fulfills his or her job requirements adequately. But the magic is gone, and Shrek Forever After is no longer an ogre phenomenon to reckon with. Instead, it's a Hot Swamp Time Machine. B-
See all of this week's reviews | Shrek Forever After, the supposed last film in the green ogre franchise, isn't terrible, critics unanimously agree. But neither is it remotely necessary. Here's what they're saying: “There's a soft, middle-aged complacency to the well-oiled mechanics of Shrek Forever After,” writes Lisa Schwarzbaum of EW. “What was once a fresh, self-referential twist on the vulturish consumption of pop culture when the first Shrek debuted in 2001 has become a lazy corporate tic.” “ If there were a Shrek TV show, this could be the two-part finale of, say, Season 3,” writes Eric Snider of Film.com. “The difference, of course, is that a so-so episode of a TV show doesn't cost ten bucks to watch.” It's just “a recycling machine that recalls the high points of previous installments without demonstrating the need for a new one,” complains Joe Morgenstern of the Wall Street Journal. “There's also a sense of filmmakers searching for whatever will help fill the running time." But James Bardinelli disagrees. “Even though Shrek Forever After is obligatory and unnecessary, it's better than Shrek 3” and you won't regret seeing it, he writes in ReelViews. "As It's a Wonderful Life knock-offs go, this one isn't half-bad.” |
Concern over the state of America’s infrastructure—highways, mass transit, rail, aviation, water transportation, water resources, water supply, and wastewater treatment facilities—has become widespread. The nation’s interstate highway system has nearly been completed, but highway, air traffic, and other transportation and environmental problems are mounting. However, the federal budget deficit has made it increasingly difficult to fund infrastructure improvements either directly through federal grants or indirectly through tax exemptions. Consequently, the Congress and the administration have explored additional financing methods—including some that involve America’s pension plans, which were estimated to have over $4 trillion in assets in 1994—to expand federal, state, and local financing of infrastructure projects. Substantial grant funding for infrastructure projects, including highways, wastewater treatment facilities, and mass transit began between 1956 and 1964. Spending on these programs as a share of total federal spending peaked in the 1970s. But by the late 1970s, the growth of federal infrastructure spending had slowed and continued to slow into the 1990s. According to CBO, the share of all federal spending that was devoted to infrastructure declined from over 5.4 percent in 1977 to less than 3 percent in 1992. For example, in the area of environmental infrastructure, the Congress began to reduce funding for constructing wastewater treatment facilities in the late 1970s and decided in 1987 to phase out federal capitalization grants by 1995. The decline in infrastructure investment as a share of federal spending—coupled with a growing backlog of infrastructure development and repair projects, and federal, state, and local budget deficits—led to a widespread perception of an infrastructure crisis in the 1980s and 1990s. Estimates of how much investment was needed to resolve the crisis varied widely. A 1991 Office of Technology Assessment study estimated that federal, state, and local governments spent about $140 billion annually on building, operating, and maintaining infrastructure facilities, but others estimated that $40 billion to $80 billion more was needed each year. However, some experts and economists believe that the infrastructure problem has been overstated. They argue, for example, that the U.S. stock of “public capital” (that is, infrastructure) rose steadily between 1949 and 1991. Some also contend that past spending on infrastructure means less can be spent now; the interstate highway system is about 98-percent complete, for instance, and Americans have the highest quality drinking water in the world. The debate over infrastructure investment has been extensively explored in the economic literature. Although there is no consensus on the magnitude of any infrastructure gap, federal, state, and local officials have begun seeking new and innovative ways to finance development for the 1990s and beyond. For example, the Congress included the “toll provisions” in section 1012(a) of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) to allow tolls to be charged on new, reconstructed, or renovated federal highways other than interstates. The revenue streams from the tolls make participating in financing highway projects more attractive to private investors. Another provision of ISTEA, section 1081, established the Commission to Promote Investment in America’s Infrastructure (the Infrastructure Commission) “to conduct a study on the feasibility and desirability of creating a type of infrastructure security” that would attract pension plan investors. Creating securities that would encourage pension plans to invest in public facilities was a novel idea because private pension plans do not generally invest in public projects within the United States. Public projects at the state and local levels are commonly financed through bonds for which the interest income is exempt from federal taxation. Tax-exempt bonds pay lower interest rates and, thus, hold down the cost of borrowing for state and local governments while providing a return to investors comparable with the after-tax return of taxable securities. At the same time, to encourage the development and growth of private pensions, the federal government exempts pension plans’ earnings from taxation. However, since plans are subject to fiduciary rules under the Employee Retirement Income Security Act of 1974 (ERISA), which obligate them to seek the highest return (taking risk into account) on their investments, they do not normally invest in lower-yielding, tax-exempt bonds. The bipartisan Infrastructure Commission, which was appointed by the President and congressional leadership, made three major recommendations in its February 1993 report designed to increase institutional investment, including pension plan investment, in infrastructure projects: Create a National Infrastructure Corporation (NIC) to leverage federal dollars and boost investment in infrastructure projects; NIC would have the capacity to become self-sustaining through user fees or dedicated revenues. Create new investment options to attract institutional investors, including pension plans, as new sources of infrastructure capital. Strengthen existing infrastructure financing tools and programs by making federal incentives more consistent and by providing uniform treatment for investment in infrastructure projects. Given continuing congressional interest in infrastructure and pension issues, and at the request of the Chairman and the Ranking Minority Member of the House Committee on Transportation and Infrastructure, we initiated a study to identify the role that current federal policies play in providing incentives for private pension plans to invest in infrastructure projects and analyze the Infrastructure Commission’s 1993 proposals relating to pension plan investment to determine how pension plans might respond. In addressing these objectives, we reviewed relevant laws, policies, reports, Infrastructure Commission hearing testimony, and various economic analyses. We also interviewed former Infrastructure Commission officials, corporate executives, government officials, and experts on infrastructure financing or pension plan issues. For further details on our scope and methodology, see appendix I. To ensure the accuracy of our information, we provided a draft of this report to several outside experts, who generally agreed with our findings. We incorporated their technical comments where appropriate. We conducted our review between January 1994 and June 1995 in accordance with generally accepted government auditing standards. Current federal tax and pension policies are inconsistent with the goal of having pension plans invest in infrastructure projects to any significant extent. Fiduciary requirements state that pension plans must invest their assets for the exclusive benefit of their participants by earning the highest risk-adjusted return possible. Federal law also exempts the plans’ earnings from taxation. At the same time, the Internal Revenue Code and current federal grant and revolving fund programs encourage infrastructure project sponsors to finance public projects at lower interest rates through the municipal bond market. As a result, infrastructure projects do not attract pension plan investment. However, the Infrastructure Commission did not propose to substantially change the long-standing tax and pension policies, which together translated into more than $60 billion in indirect federal subsidies in fiscal year 1994. Federal law does not prevent private pension plans from investing in infrastructure, but the plans’ investments must meet certain standards. Private pension plan managers may only make investments that comply with various fiduciary standards found in ERISA, Taft-Hartley Act restrictions, Internal Revenue Code provisions, and common law. These fiduciary standards require plan managers to, among other things, carry out their duties with the same care, skill, and diligence as a prudent person. These standards have been interpreted to mean that managers should obtain market-rate returns on their investments. DOL, which is responsible for enforcing the fiduciary standards in ERISA, interprets the standards as permitting infrastructure investment. DOL’s Solicitor testified before the Infrastructure Commission that nothing in ERISA’s fiduciary provisions specifically prevents pension plans from purchasing a security created to encourage investment in infrastructure facilities. Specifically, a pension plan must act solely in the interest of the participants and beneficiaries, and for the exclusive purpose of providing benefits and defraying reasonable expenses; act prudently; diversify plan investments; and not engage in certain kinds of transactions that may create conflicts of interests or result in self-dealing. This guidance generally means that private pension plans may invest in infrastructure projects only if the investments offer an equal or higher rate of return, adjusted for risk, as other potential investments. However, a pension plan can, according to the Solicitor’s statement, consider “noneconomic” factors even though it is required to act solely in the interests of its participants. For example, DOL advised a pension plan that it could invest in a mortgage pool that included only construction projects built by union labor because the mortgages had to meet rigorous financial criteria, and the investment was competitive with comparable investments available in the marketplace. However, according to the Solicitor’s testimony, DOL has consistently opposed pension plan investments designed to achieve socially beneficial objectives at the expense of yield or security. A key ERISA requirement is that pension plan managers “act prudently.” Specifically, ERISA requires that a fiduciary use the care that “a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.” In fact, the Counsel to the Infrastructure Commission said that only large pension plans are likely to want to bear the cost of the “due diligence” work to determine whether an infrastructure investment is prudent. In Interpretive Bulletin 94-1, issued on June 22, 1994, DOL reiterated its position that the fiduciary standards applicable to infrastructure are no different than the standards that apply to other investments. DOL stated that it issued its bulletin because “a perception exists in the investment community” that ETIs, including infrastructure, “are incompatible with ERISA’s fiduciary obligations.” The bulletin stated that sophisticated long-term investors, including pension plans, may invest in assets designed to create benefits to third parties in addition to their returns to investors. That would be possible even though less information about the investment may be readily available and the investment may be less liquid, may require a longer time to generate significant investment returns, and may require special expertise to evaluate. Federal tax laws were designed to help lower the costs to states and localities for developing and financing public projects. The Internal Revenue Code exempts the earnings on municipal bonds from federal taxation; thus, states and localities financing infrastructure projects can hold down their costs by paying lower interest rates and still attract investors who do not have to pay taxes on the interest they collect. Typically, the interest rate paid on tax-exempt bonds is about 15 to 20 percent lower than that paid on taxable bonds of comparable risk and maturity. Given the high capital costs of some infrastructure projects such as environmental facilities, the interest savings can be considerable. Although tax-exempt bonds help states and localities hold down the cost of public projects, the comparatively low interest rates they pay make them relatively unattractive to pension plans, whose earnings are already tax exempt. The difference between yields on tax-exempt and taxable bonds changes over time, but we found that taxable bonds consistently pay a higher rate of return. CBO, for example, found that the yields on 30-year AAA-rated tax-exempt general obligation bonds (or bonds that are issued for state and local projects) have been an average of 1.4 percentage points lower than those on 30-year Treasury bonds since 1989. Our work shows that the yields on the tax-exempt bonds were lower than those on the Treasury bonds every month during the 11-year period, as shown in figure 2.1. The lower return on tax-exempt municipal bonds means that the securities cannot compete effectively for pension plan assets. Consequently, infrastructure developers have little incentive to seek financing from private pension plans, and private pension plans have little incentive to seek infrastructure investment opportunities. Only 0.1 percent of the assets held in private pension plans were invested in such securities at the end of 1992, according to CBO. Federal agencies assist infrastructure projects through programs that involve direct, as well as indirect, federal expenditures. We reviewed several recent initiatives that used federal funds to help infrastructure developers obtain financing from traditional sources, such as tax-exempt bonds. Actions taken to increase private investment in infrastructure have included establishing the State Water Pollution Control Revolving Fund Program under the 1987 amendments to the Clean Water Act to leverage, and eventually replace, federal capitalization grants; permitting states to lend federal funds to toll road projects under section 1012(a) of ISTEA in 1991; and issuing Executive Order 12893, Principles for Federal Infrastructure Investments, on January 26, 1994, which directed federal agencies to seek private sector participation in their infrastructure programs. These initiatives generally use the tax-exempt market and do not target pension plan investment. The tax exemptions for private pension plans and for bonds that finance infrastructure projects involve large, indirect federal subsidies in the form of foregone federal revenue, referred to as a “tax expenditure.” Recent estimates show that exempting pension plan earnings from taxation resulted in foregone revenue of about $48.8 billion in fiscal year 1994.Nearly $12 billion in revenue was foregone by subsidizing interest on tax-exempt bonds. Although current policies are costly and have the effect of discouraging pension plans from investing in public projects, the Infrastructure Commission did not propose changing these basic federal laws substantially. However, research suggests that it might be less costly to pay interest subsidies directly to state and local governments than it is to exempt state and local bonds from taxes. Paying interest subsidies directly to state and local governments might also eliminate the disincentive for pension plans to invest in state and local government bonds because the bonds would presumably pay investors competitive interest rates. The Infrastructure Commission recognized, though, that both the tax exemption for pension plan contributions and the tax exemption for municipal bonds are long-standing federal laws. The Congress tasked the Infrastructure Commission with conducting a study on the “feasibility and desirability of creating a type of infrastructure security to permit the investment of pension assets in funds used to design, plan and construct infrastructure facilities in the United States,” including examining other methods of encouraging public and private investment in infrastructure facilities. In short, the focus of the Infrastructure Commission’s inquiry was on developing a new investment instrument that could attract private money, with a particular concentration on pension plans. The Congress has not acted on the proposals contained in the Infrastructure Commission’s 1993 report, although a bill based mainly on the proposals was introduced in the 103rd Congress. The Infrastructure Commission found that there is a significant need to facilitate investment in the repair, renewal, and development of domestic infrastructure. The Infrastructure Commission’s report argued that budgetary constraints will prevent federal, state, and local governments from increasing either grant expenditures or tax subsidies sufficiently to eliminate the nation’s projected shortfall in infrastructure investment. The Infrastructure Commission’s Counsel told us that there is a “limited appetite” for state and local tax increases to pay for roads, environmental facilities, and other infrastructure projects. Furthermore, the Infrastructure Commission’s report noted that the legal limits on federal tax subsidies for municipal bonds, issued to finance projects that involve private sector participation, constrain the availability of financing and increase the cost of financing such projects. As grant funds from the federal government decrease, states and localities need to find new ways to leverage their limited resources. The Infrastructure Commission’s 1993 report recommended that the Congress establish two new corporations to provide credit assistance and insurance to state and local issuers of debt to finance infrastructure. The Infrastructure Commission recommended the establishment of a National Infrastructure Corporation (NIC) that would purchase and bear the credit risk of obligations issued to finance transportation and environmental facilities, including both governmental and public-private sponsored projects. NIC would also insure project sponsors against a portion of the risk of developing new facilities. Also, the Infrastructure Commission recommended the establishment of an Infrastructure Insurance Corporation (IIC), initially an NIC subsidiary, that would insure infrastructure bonds. In general, the Infrastructure Commission’s proposals are aimed at providing credit assistance to public and private sponsors seeking financing for infrastructure projects. Borrowers may have difficulty securing financing because their projects may be judged as too risky given the rate of return they promise to investors. When an entity assumes some of this risk (that is, by providing credit assistance or bond insurance) the investment becomes more attractive to the investor. At the same time, the state or locality seeking to obtain financing may do so on more favorable terms. The ability to bring borrowers and investors together by having an entity assume risk may involve the provision of a subsidy on the part of the federal government. The Infrastructure Commission proposed that NIC and IIC provide three forms of credit assistance. First, NIC would purchase “subordinated” bonds sold by state and local governments to finance new infrastructure projects. The payment on these bonds would be legally subordinated to, or not due before, payments on the remainder of the debt, called “senior” debt. The subordinated debt purchased by NIC typically would be for projects that are not eligible for investment-grade credit ratings (ratings BBB and above) in the marketplace. Second, NIC would insure private firms against a portion of the risk associated with developing new facilities, such as the risk of environmental lawsuits and voter disapproval of the issuance of bonds to provide long-term financing. NIC would be legally obligated to cover up to 70 percent of any losses incurred by developers if the projects were never completed. Third, IIC would bear a portion of a project’s credit risk by insuring or reinsuring senior infrastructure bonds. IIC would insure or reinsure only those bonds that private municipal bond insurers would not insure or that could not obtain other forms of credit enhancement, such as a bank letter of credit. It was also proposed that in the long run, NIC would purchase senior infrastructure bonds, including bonds insured by IIC. The Infrastructure Commission proposed that the federal government initially capitalize NIC and IIC through a grant of $1 billion per year over 5 years. Later on, NIC would raise additional funds by issuing debt to the public and creating and selling securities backed by the infrastructure bonds that it had purchased (that is, providing securitization). The Infrastructure Commission’s report did not specify the legal and organizational status of NIC. It noted that NIC’s ability to borrow from the public would benefit from a “limited line of credit” from the U.S. Treasury, but it did not foresee a need for a “full faith and credit guarantee” from the federal government. IIC would be established initially as an NIC subsidiary and would operate as a private corporation similar to the College Construction Loan Insurance Association (Connie Lee)—a private, for-profit municipal bond insurer that insures bonds for construction at institutions of higher learning and teaching hospitals. The Infrastructure Commission noted that pension plans historically have not participated in financing infrastructure in the municipal bond market because of their tax-exempt status as well as the relative complexity of infrastructure credit. The Infrastructure Commission identified three options to encourage pension plans to participate: Pension plans could invest in the equity of the proposed bond insurer, IIC. Pension plans could buy taxable project debt insured by IIC or purchase securities directly issued by NIC. Pension plans could act as lenders directly funding taxable project debt through purchasing public benefit bonds. The first option would involve pension plans by having them provide capital to start up IIC. Since it is assumed IIC would generate a revenue stream of its own through fees paid by those seeking insurance for their bonds, the pension plans could earn a return. The size of such a return is not clear. Furthermore, the experience with Connie Lee suggests that those providing capital typically would invest only modest amounts. Thus, the potential equity participation in IIC by pension plans is likely to be of limited magnitude. The second option involves two parts. First, pension plans could directly purchase taxable project debt insured by IIC. Second, NIC could use its capital to purchase taxable project debt, some of which may have been insured by IIC. When a large volume of debt has been acquired, NIC could create a new security backed by the project debt that would then be sold to the market with NIC’s guarantee. It is thought that this security would create a secondary market for project debt and reduce the risks of investing in specific project debt. Since it is presumed that this security would offer a competitive, taxable, market rate and be more liquid than specific project debt, pension plans might be attracted to it. Pension plans might, for example, support pollution control projects that are not eligible for tax-exempt financing because they benefit private businesses. However, this could only occur after some time, since NIC would need to develop a quality portfolio of loans over time as a precondition to issuing its own debt or securitizing its loans. In its third option for increasing pension plan investment in infrastructure, the Infrastructure Commission recommended modifying federal tax law to allow all or part of the earnings on a municipal or “public benefit” bond to be distributed tax free upon retirement to workers who participated in defined contribution pension plans, such as 401(k) plans and individual retirement accounts (IRA). Defined contribution plan participants would be willing to invest in such a bond because its after-tax rate of return would be comparable to a taxable market return. This would allow the localities issuing the bonds to finance projects at rates comparable to those in the municipal bond market while attracting direct investment from pension plans. The Infrastructure Commission’s Secretary told us that he considers the public benefit bond proposal to be the “cornerstone of the Infrastructure Commission’s proposals related to pension plans.” However, the Infrastructure Commission’s Executive Director said that much of the investment in infrastructure would come from public, and perhaps union, pension plans—not from corporate pension plans. He estimated that about 1 percent of U.S. pension plan assets might be ultimately invested in infrastructure. One approach to evaluating the proposals is to examine the economic justification for an expanded federal role in establishing entities and incentives to entice pension plan investment into infrastructure. We reviewed a number of economic analyses related to the justification for a federal role, and a discussion is contained in appendix II. Here, we summarize that discussion, focusing on a recent CBO analysis that specifically addressed the Infrastructure Commission’s proposals. CBO made the following key points regarding the Infrastructure Commission’s proposals: The premise that greater investment in infrastructure will increase overall economic output is questionable, and only a few projects that would be supported through NIC would have returns higher than alternative private investments. The proposed new federal incentives may result in further distortion of investment choices by displacing other investments, which in turn could result in economic inefficiency. The municipal bond market already receives a large federal subsidy and is generally considered to be functioning well. The market imperfections that affect the municipal bond market were not addressed by the Infrastructure Commission’s proposals. Measuring and controlling the impact of new federal financial entities are influenced importantly by the organizational form of the proposed corporations. Establishing NIC as a government-sponsored enterprise carries high risk (through contingent liability) to the federal government. Concerning the specific incentives for pension plan involvement mentioned earlier, CBO made several additional points. With regard to pension plans investing in IIC’s equity, CBO noted that the proposed IIC has little justification on efficiency grounds since the municipal bond insurance industry appears to be competitive. Hence, this first avenue for pension plans may not be necessary or attractive. The second avenue—having pension plans buy debt securities issued directly by NIC—is problematic because infrastructure projects are heterogeneous and, thus, are not likely to be easy to pool into securities to create a secondary market. The third avenue for pension plan investment—having pension plans invest directly in funding infrastructure project debt through public benefit bonds—also was questioned by CBO. It noted that the public benefit bonds might subsidize projects that are not really public in nature. This provision might circumvent the legal restrictions put in place during the 1980s to prevent the excessive use of tax-exempt municipal debt to finance private activities that were crowding out state and local spending and raising costs for public projects. CBO also noted that administrative costs may be associated with implementing a public benefit bond that gives a tax break to pension plan participants. Internal Revenue Service regulations would have to be put in place to require individuals to separate income from investing in infrastructure securities from other asset income. The CBO analysis concluded that the interaction of existing federal tax subsidies for pension plans and municipal bonds is the main cause of the low level of direct investment in infrastructure. It noted that existing subsidies for municipal debt could be reduced and that this could induce pension plans to invest in infrastructure. A similar effect could result from taking away the tax exemption for pension plans. However, the Infrastructure Commission did not advocate either approach. In reviewing other analysis and commentary on the Infrastructure Commission’s proposals, we found substantial skepticism among economists as well (see app. II). The basic view was that there seems to be little reason to put new incentives in place to reallocate capital from its existing uses. Moving beyond the economic analysis framework implies that the issue becomes one of competing political values about how to allocate resources. In our discussions with Infrastructure Commission officials, it was noted that the rationale for the proposals was based more on “policy” considerations than on a strictly economic justification. In this regard, the Infrastructure Commission’s rationale seems more rooted in the view that capital should be reallocated to public investment (in infrastructure), and the proposed entities and incentives are justified as an effort to implement that objective. This means that the justification for an expanded government role to encourage investment in infrastructure can depend on the values expressed by the voters. In other words, if individuals perceive a problem with infrastructure and want it to be addressed, then government may be chosen as the means to meet this demand. The institutions and public processes for making infrastructure investment decisions should then be the focus of analysis and debate. Private pension plan managers and financial market experts we spoke with confirmed that private pension plans are not active investors in the domestic infrastructure finance market for many of the reasons that the Infrastructure Commission and others cited. For example, they noted the lack of available investment opportunities at competitive rates of return. Some market participants suggested a role for defined contribution pension plans and the desirability of finding “niches” for pension plan investment in infrastructure. Their points seem broadly in line with some of the proposals that the Infrastructure Commission made. Other market participants expressed concern about efforts to induce a reallocation of pension capital. Some pension plan managers were concerned that pressures to invest in infrastructure or other ETIs would ultimately affect their ability to comply with their fiduciary responsibilities under ERISA. They believed that even DOL’s Interpretive Bulletin 94-1 (which states that the selection of an ETI will not violate ERISA rules if the general fiduciary standards are met) did not provide any new information and that DOL’s interpretation would simply subject the private pension plans to a higher level of government scrutiny. Other experts noted there are alternative mechanisms that do not involve pension plans but may help increase infrastructure investment. Earlier, we discussed the fundamental disincentive for pension plan investment in infrastructure that results from the tax-exempt status of the plans and the use of tax-exempt municipal bonds as a common vehicle to finance infrastructure. The financial return to the pension plan is simply too low, which leads to concerns, as the Counsel to the Infrastructure Commission noted, in evaluating whether these investments meet fiduciary standards. In our discussions with market participants, other disincentives for pension plan involvement were noted. In many respects, the Infrastructure Commission’s proposals attempt to respond to these concerns. While pension plan managers told us that they are unlikely to invest in infrastructure projects, one investment manager noted that he could consider including infrastructure projects in an “alternative investment portfolio” if the projects provide a rate of return that is competitive with taxable securities. However, he believed that managers of alternative portfolios are still unlikely to invest pension plan assets in infrastructure projects because alternative investments, such as venture capital and foreign securities, are available. At any rate, alternative investment portfolios are small. Project finance experts told us that infrastructure projects are often large and complex, with long development and construction phases. These types of projects are not standardized and, thus, are difficult to make into securities, in contrast to home mortgages. Unlike mortgage-backed securities, pooling of infrastructure projects does not have a track record that investors can assess. That situation is not advantageous to pension plans, particularly in light of their fiduciary requirements concerning safety, liquidity, and yield. It is difficult for investors to estimate the rate of return or risk of a proposed infrastructure project. The chief investment officer of a communications firm that has a large pension plan told us that the pricing of public infrastructure projects is not driven by cost of capital but by political considerations. Predicting long-term cash flows is, therefore, difficult. In addition, a project developer who served as Secretary of the Infrastructure Commission said that he had been unable to attract pension plans to proposed projects because of the difficulty in estimating the rate of return. Proposed projects have not yet demonstrated competitive returns. Our discussions with market participants highlighted several key points regarding pension plan involvement in infrastructure. One is that pension plans seek diversification in their portfolios but must have investments that provide competitive returns within fiduciary standards. In addition, liquidity and standardization of investments are important. The securities that may be backed by infrastructure projects would not possess these characteristics, and it may be more difficult to use information about them in evaluating securities for future projects. Even if these problems could be overcome, the potential amount of pension capital that could be invested in infrastructure is probably significantly smaller than the vast pool of available capital sometimes suggested. Defined contribution pension plans (primarily 401(k) plans) represent the fastest-growing portion of pension plan assets. These plans, managed by the mutual funds and life insurance industry, represent a potential source for financing infrastructure. According to data that an investment firm provided to the Infrastructure Commission, private defined contribution plan assets represented almost 47 percent of all privately sponsored pension plan assets in 1991. According to the chief economist at a private bond-rating agency, the managers or the participants of these plans might not want to invest in infrastructure bonds. However, if the same bonds were sold as part of a “government bond fund” they might buy them, he said, because the public thinks of government bonds as safe investments. Also, investing a small portion of their assets in infrastructure might help diversify risks in a defined contribution pension plan’s portfolio of investments if the value of infrastructure assets goes up when the value of other assets is going down. One mutual fund industry lawyer told us that defined contribution pension plans cannot be expected to finance infrastructure projects since they do not “pass through” the tax advantage to beneficiaries. Also, infrastructure investments may lack the liquidity that defined contribution plans require in order to repay beneficiaries. These views suggest a possible role for the Infrastructure Commission’s proposed public benefit bond, which would pass through tax benefits to retirees. An advantage of tapping defined contribution assets is that a portion of these funds are self-directed by workers and, hence, these workers can make a voluntary choice to invest these funds in infrastructure securities. Since pension plans, by virtue of their tax-exempt status, would prefer fully taxable bonds over tax-exempt bonds, the way to entice them into funding public projects, some experts suggested, is to find niches where their capital can be put to fruitful uses at competitive rates of return. Projects that meet this criterion might include “stand-alone” toll roads constructed by private developers for which there is adequate demand and that can generate identifiable revenue streams. Furthermore, according to the Infrastructure Commission’s Secretary, toll roads that lacked a track record when they were initially financed could attract pension plans when they are refinanced based on a history of generating revenue. Economic research suggests that user fees could provide a revenue stream to finance a large share of many public works facilities such as transportation, water supply, wastewater treatment, and solid and hazardous waste systems. Because these facilities largely serve identifiable consumers, their use can be measured and priced, and the beneficiaries can be charged directly for the cost of services. If financing is linked to use, revenue can become steadier and more predictable, encouraging better maintenance, rehabilitation, and replacement. Unless these niches are found, pension plans will not be significant investors in America’s infrastructure, according to a managing director of a municipal bond-rating firm. Pension plans are not investing in infrastructure because “the deals aren’t out there.” One way to identify a niche, the managing director suggested, would be to establish a pilot program on one kind of project, such as highways or mass transit, so that pension plan managers would “learn to walk before they run.” Once these niches are found, then government incentives—such as the development of industrywide standards for evaluating projects, and tax credits—might help attract private capital. A transportation consultant said that any governmental actions to encourage investment in infrastructure must move in the direction of assisting the private sector’s efforts in infrastructure investment, establishing standards for project evaluation, and pooling and securitizing private sector projects. We were also told that while government guarantees, by reducing risk, enable state and local governments to obtain lower interest rates, they also lower the return to investors. The view that niches must be found suggests the need for exploring alternative financing schemes but also seems to be broadly consistent with the notion of a government corporation that would work with localities to find projects and help make them attractive to pension plans. Creating NIC and IIC to attract pension plan capital to finance public projects may not be necessary, according to the pension plan representatives and experts we met with. They pointed to the vast market for privately insured tax-exempt municipal bonds that already exists for financing such projects. Other concerns included the potential for increased federal direction or scrutiny of pension plan investments. Pension plan managers are concerned about the possibility that the federal government will mandate certain investments, or classes of investments, said a managing director of a financial services company that manages assets for large corporate pension plan clients. In addition, partners in a global investment management firm that advises pension plans told us that they believed DOL’s interpretive bulletin will subject private sector pension plans to a higher level of government scrutiny than they receive now. They believed that pension plan managers will become more circumspect about the possibility of investment losses in ETIs. State and local officials are unlikely to seek investment from private pension plans because it would increase their cost of borrowing, the chief economist of a bond-rating agency told us. An official of a private bond insurance company noted that NIC’s insurance proposals would also be more costly than private insurance. Instead, she recommended that projects obtain low-interest loans and grants from the federal government. In financing infrastructure projects, pension plans would require a competitive rate of return as well as a government guarantee backed by the full faith and credit of the federal government. Thus, pension plan capital would be expensive for states and localities to borrow. Municipalities could finance their projects more efficiently by improving their bond credit ratings instead of relying on government guarantees or pooling of assets, according to a managing director responsible for municipal bond ratings. In this view of the capital markets, plenty of capital is available to finance creditworthy infrastructure projects. Moreover, the bond insurance function envisioned for IIC would compete with the functions currently being performed by private insurance companies. One insurance industry official stated that IIC could not do any more than the private insurance industry does. The managing director of a bond-rating company told us that IIC may not significantly increase infrastructure investment by offering bond insurance because municipal bonds are already privately insured. A project finance expert at an investment bank told us that by offering insurance to projects with more risks than the private sector would normally accept, IIC would encourage the development of financially infeasible projects. We found that some market participants and experts were skeptical about the need for the government to intervene by creating NIC to reallocate capital. They were not sure whether the complex NIC mechanisms would work in the marketplace and questioned whether specific incentives to attract pension plans are the best way to spur infrastructure investment. They pointed out that other mechanisms for infrastructure financing already exist, such as municipal bonds, state revolving funds, user fees, and private bond insurance for creditworthy projects. In transportation finance, for example, some pointed out that ISTEA could be amended to allow states to create state revolving fund loans or to provide credit enhancement (such as guaranteeing local government bonds) with federal highway money. Some state officials and industry experts remain skeptical about the viability of state transportation revolving funds. One concern, for example, is whether even densely populated areas will generate many revenue-bearing projects with the capacity to repay loans. Despite these concerns, however, state transportation revolving funds could serve as an alternative to NIC and IIC, and may help expand infrastructure investment if key barriers to their effectiveness can be overcome. There has been long-established general agreement on the need for infrastructure to be funded by tax dollars and on a federal role in supporting infrastructure projects. Nevertheless, debate continues on the amount of infrastructure investment that is needed, the role of infrastructure in fostering future economic growth and higher productivity, and the appropriate degree of federal involvement. There is also a continuing effort to explore innovative and efficient ways to finance projects. The idea of attracting a portion of pension plan capital to infrastructure investment has become popular, and the proposals of the Infrastructure Commission offer an ambitious attempt to put that idea into practice. Our review of the Infrastructure Commission’s proposals suggests that they could play a role in encouraging more infrastructure investment by pension plans. The government can foster marketplace innovations and has done so in the past. But this comes at a cost to the federal government. We found strong reservations among economists and market participants about the need for new federal entities and subsidies to encourage a reallocation of pension capital when significant existing tax subsidies discourage pension plans from investing in infrastructure projects. If the primary goal is increasing infrastructure investment, then there are many ways, including initiatives currently under way, to address this goal. Encouraging localities to make projects more creditworthy through the provision of adequate revenue streams could foster investment that is more in line with the demand from the public. Techniques to leverage grants at the state level seem promising. Establishing NIC and IIC might aid these efforts, but the evidence is insufficient to conclude that such entities are required to attain an adequate level of infrastructure investment. The goal of attracting pension capital to infrastructure is problematic. Advocates for new federal entities to encourage direct pension capital flows to infrastructure recognize that the subsidies accorded to pension plans and municipal bonds are well established and serve important policy objectives. Advocates also need to recognize that fostering significant pension plan investment in infrastructure would probably require a reevaluation of existing tax policy. | Pursuant to a congressional request, GAO provided information on the role that pension plans play in expanding public investment in infrastructure projects. GAO found that: (1) pension plans have not been investing in domestic public infrastructure because of the combined effects of federal law, which requires plans to seek the highest rate of return on investments and encourages growth by exempting earnings from taxation; (2) to encourage public investment in infrastructure, federal law provides a tax exemption on interest income to those who invest in municipal bonds; (3) pension plans have no incentive to invest in lower-interest municipal bonds, since plan earnings are already tax exempt; (4) although the Infrastructure Commission recommended creating two federal financing entities to attract pension plans to invest, the share of plan assets that might go to infrastructure would likely be small; and (5) the federal capitalization of state revolving funds may be an option to expand infrastructure investment without relying on pension plans. |
Purchase cards first came into use as part of the government’s effort to cut the cost of buying goods and services. In March 1982, the President issued an executive order directing executive agencies to reduce administrative procurement costs. Under that order, in 1986, several agencies pilot tested use of a government commercial credit card, called a purchase card, and found that it reduced such costs. According to a report on the pilot tests, those agencies found that the purchase card had advantages over other procurement methods. Generally, the card could be a less costly and more efficient way to buy goods and services. In 1989, the purchase card was made available governmentwide through a competitively awarded contract with Rocky Mountain BankCard System (RMBCS), administered by the General Services Administration (GSA). The contract specifies controls that an agency must establish before issuing cards to their staff. It also requires that an agency designate a program coordinator, who serves as liaison to RMBCS and GSA and who is responsible for the purchase card program within the agency. In 1993, NPR identified the purchase card as an acquisition reform that could save $180 million annually if one half of small purchases were made with the card. NPR recommended that all federal agencies use purchase cards and that the FAR be amended to promote and facilitate purchase card use for making small purchases and in ordering from established contracts. Card use was further facilitated and encouraged in October 1994 by FASA, Executive Order 12931, and an Office of Management and Budget memorandum to agency senior procurement executives and the Deputy Under Secretary of Defense for Acquisition Reform. In December 1994, an interim FAR rule was issued making the card the preferred method for making micropurchases. Agency officials have used the purchase card and the micropurchase authority provided in FASA to move simple purchases from procurement offices to program offices. Several studies have shown this move reduced the labor and payment processing costs for those purchases by eliminating steps from the procurement process and consolidating bills for many purchases into one payment. One interagency study showed that costs were often cut by more than half. Several agencies in our review identified millions of dollars in current or potential savings from using purchase cards. In addition, some agencies are using the card to help absorb the impact of staff reductions being made as a result of the Federal Workforce Restructuring Act of 1994, which has a goal of reducing government employment by almost 273,000 staff. Planned reductions particularly target administrative staff, such as the procurement and finance staff who buy supplies and pay bills. Most agencies in our review also noted that, with purchase cards, program office staff can buy needed goods and services more quickly, thus improving their efficiencies and their abilities to support their agencies’ missions. In 1994, an interagency group, the Purchase Card Council, performed a cost-benefit study on using the purchase card versus purchase orders.The group reviewed the labor cost of requisitioning, purchasing, administering, receiving, invoicing items, and processing bills through finance offices for payment. For all 17 organizations in the study, it found that purchase cards were less expensive than purchase orders. For 15 organizations, purchase card use cut costs by at least one third. For 8 of these 15 organizations, costs were cut by over half. Per transaction savings for the 17 organizations ranged from $1.42 to over $142, with an average saving of about $54. Since 1989, 9 of the 12 agencies in our review have performed cost-benefit analyses on using purchase cards, including 5 agencies that were part of the interagency study. All found that the card was less expensive to use than other methods. However, several noted that determining savings from using the purchase card can be difficult because of several factors. For instance, some studies noted that the purchase card does not replace all transactions made with any one procurement method, such as purchase orders, but instead usually partially replaces transactions previously made by several different methods, such as purchase orders, imprest funds, and blanket purchase agreements. Further, studies stated that the administrative cost of a purchase is affected by local procedures, the dollar amount, and the degree that processing systems are automated. Most of the studies we reviewed included the labor cost for program officials to support the procurement process when using a tool other than the card (e.g., ensuring funds are available, preparing a procurement request, and identifying a vendor). About half of the studies also included the labor cost for program officials to place purchase card orders or reconcile statements. In some cases, the studies included the cost of an administrative service fee charged by RMBCS until early 1994. None included the value of rebates as part of the benefit. All of the studies we reviewed identified significant savings. However, because of the previously mentioned factors, we found no one precise dollar figure that could be used to reliably calculate savings for all government agencies. Several agencies’ studies identified millions of dollars in current or potential savings from card use. For instance, in 1994, Health and Human Services identified the potential to save about $5.7 million a year by using the card. The Postal Service, currently the second largest card user, also identified major current cost reductions. It estimated that using the card, instead of other means, reduced costs by about $22 per transaction. In fiscal year 1995, the Postal Service had almost 700,000 purchase card transactions. Using the $22 figure, it would have reduced costs by over $15 million. The Postal Service developed its estimate of cost reduction per transaction by comparing the costs of ordering and making payment for purchase card purchases versus noncompeted, single source purchases. It found the shortest time for processing purchases without the card was eight times longer than the shortest time with the card, for a labor savings of $15.65 a transaction. It also estimated payment savings of over $6.00 a transaction, based on the cost of paying for transactions individually versus paying for all purchase card transactions with a single monthly check. According to officials at the Office of Federal Procurement Policy, agencies can maximize the savings potential of the purchase card by promoting streamlining and empowerment and eliminating unnecessary paperwork. Officials stated that one way agencies could do this would be to identify high-dollar aggregate purchases from individual merchants and negotiate discounts with those vendors, as recommended by NPR. They also noted that agencies have access to central purchasing contracts that have quantity discounts negotiated into the prices. As an example, they cited a contract for office supplies recently awarded by GSA that allows for 24-hour delivery and payment by purchase card and has prices below discounted retail prices. Agencies have reported that using the purchase card reduces the workload in procurement and finance offices. At the same time, the number of staff in those offices is being targeted for reductions by government reform efforts. In 1993, the executive branch announced a goal to eliminate 252,000 government jobs, particularly targeting administrative areas. The Federal Workforce Restructuring Act of 1994 later raised that goal to 272,900. According to the September 1995 update of NPR, more than 160,000 of those positions had been eliminated. Several agencies in our review cited staffing cuts in support areas as one reason they are emphasizing purchase cards. The Department of the Interior noted that its procurement workforce has decreased by 12 percent since 1993 and that its ability to manage its workload with reduced staff can be partially attributed to the card. Social Security Administration officials also told us that the finance staff is scheduled to be reduced by about one third in fiscal year 1996 and that they will be better able to manage those losses since the card has reduced the number of bills the finance office is paying. The reforms contained in FASA have enabled program staff to use the card to make many purchases that had been handled by procurement offices. While procurement offices had done the actual buying, program office staff supported the procurement process by identifying the needed supplies or services, preparing procurement requests, ensuring money was available, and following up with procurement and other offices involved in the purchases. With the authority provided in FASA and the purchase card, program staff can buy the needed item or service. Most of the agencies in our review reported that, with this change, program offices can improve their efficiency by filling their requirements more quickly and reducing procurement lead times. This improved efficiency enables them to better deliver their services. One example where service delivery has improved is at the Department of Veterans’ Affairs, which pilot tested the use of the card in its vocational rehabilitation and counseling program offices. In the pilot test, those offices reduced the time veterans had to wait for services by an average of 22 days. They did this by using the card to pay for books, tools, and other items veterans needed to enter rehabilitation programs. This use of the card allowed them to better serve veterans by reducing the time the veterans waited to attend classes or to obtain the tools or books needed for classwork. Based on the success of the pilot test, Veterans’ Affairs plans to use the purchase card in vocational rehabilitation and counseling programs nationwide. Since the beginning of the purchase card program, the use of the cards has skyrocketed. However, there is still significant growth potential for card use. During fiscal year 1990, the first full year that cards were available governmentwide, the cards were used for about 271,000 purchases worth about $64 million. Over the next 5 years, card purchases increased by about 1,500 percent, and the value of those purchases increased by almost 2,400 percent until, by fiscal year 1995, purchase cards were used for more than 4 million purchases worth over $1.6 billion. According to agency and GSA officials, this growth is generally due to purchases below the micropurchase level. In fiscal year 1995, the average purchase card transaction, which could include purchases of several items, was $375. The program growth by number of transactions and by dollars is shown in figure 1. Currently, most agencies use purchase cards to some extent. Still, agency data show many purchases that could be made with the card are being made by other means. Some agencies have set goals for card use or have identified purchases that they believe should be made with the card. For instance: The Department of Agriculture could make 207,000 purchases by using the card instead of purchase orders. Health and Human Services could make about 100,000 purchases using the card in program offices instead of purchase orders in procurement offices. Veterans’ Affairs could make most of its 1.4 million micropurchases with the card. Neither GSA nor the agencies we reviewed believed the cards have been used to their fullest potential. Instead, they believe that use will increase as agencies continue to emphasize card use for existing cardholders and add new cardholders in program offices. The results can be dramatic. In the first 4 months of fiscal year 1996, Veterans’ Affairs exceeded by almost 200 percent the number of card purchases it had made in all of fiscal year 1995. Card use is also growing at the Department of the Army, which has the largest agency card program. In the first 10 months of fiscal year 1995, the Army more than doubled its fiscal year 1994 card purchases, from over 310,000 to over 701,000. According to Army data, that number could increase to almost 1.4 million if the Army were to make 80 percent of its micropurchases with the card. The emphasis in the purchase card program has been on using the cards to allow staff in program offices to make simple purchases. At the same time, however, there have been concerns that placing the cards in the hands of program staff would lead to increased abuse. We found no evidence of increased abuse. In fact, with the controls required by the purchase card contract and some tools that agencies have developed, purchase card use can be closely monitored. The purchase card contract requires that agencies have certain specified procedures in place before any purchase cards can be issued to agency staff. For example, agencies must have procedures to identify, by name, those persons who are authorized to use cards; set spending limits for cardholders and offices, including single purchase limits and monthly limits; approve purchases and ensure funds are available before goods or services are bought; and reconcile and approve cardholder statements. Agencies may add other management and financial controls they deem necessary. Also, agencies have recently been able to obtain RMBCS electronic data that identify purchases by cardholder, approving official, date, dollar amount, merchant type, and merchant name. Those agencies in our review that have begun using this electronic data are finding that the card leaves a trail that is more complete and easier to follow than traditional paper records. In addition to these procedural controls, agencies have another safeguard against fraudulent use of the card by unauthorized individuals—they can dispute any purchases they find questionable. In such cases, the contract requires RMBCS to issue a credit against that purchase until the dispute is resolved. One organization that has used the electronic data is the Postal Service. Postal Inspection Service officials developed surveillance software that allows them to analyze thousands of card transactions from a remote location with limited manpower. They are able to analyze transactions by cardholder, approving official, dollar amount, date of purchase, vendor name, vendor type, vendor city, and other attributes. At the recommendation of the Inspection Service, the surveillance software is being made available to appropriate Postal Service managers nationwide. Postal Service officials believe that this will improve their oversight of the card program, since the electronic reviews are more expedient than reviews of paper records. Since 1993, agency inspectors general, audit agencies, or internal review offices have reviewed card programs at most of the agencies in our review. Generally, those reviews found either that controls were adequate or that agencies were taking steps to address control weaknesses. Such weaknesses included noncompliance with procedures and failure to record purchases of accountable property. The reviews did identify several instances where cards were used for prohibited or questionable purchases. Also, officials from one inspector’s general office expressed concern about the rapid growth in card use and questioned whether budgetary and other management controls were sufficient to ensure that credit card purchases were warranted and justified. Overall, the reviews did not identify significant patterns of misuse. Several inspectors general, audit agencies, and internal review reports noted that agencies were not achieving the full benefit of the card because much of the paperwork had not been eliminated from processes, cards had not been provided to staff outside of procurement offices, or card use had not been encouraged or had been excessively limited. Most of the agencies we reviewed indicated they were taking steps to address such concerns. Agency officials told us they were emphasizing card use, reengineering their processes, and developing automated tools to improve their programs. They stated that their efforts were producing benefits, including increased savings. There are still opportunities, though, for the program to be improved on a governmentwide level. For instance, most agencies in our review believed that more explicit guidance to promote the purchase card was needed in the FAR. At present, the FAR only discusses the card in the micropurchase section. Also, we found no effective mechanism for agencies to communicate with each other about their experiences and share innovations. In 1993, NPR recommended that the FAR be amended to promote and facilitate purchase card use for making small purchases and ordering from established contracts. At the time, the FAR provided no guidance on card use, although the cards had been available governmentwide since 1989. As part of implementing FASA, an interim FAR rule for micropurchase procedures was issued in December 1994 that encouraged the use of purchase cards or electronic purchasing techniques for micropurchases to the extent practicable. Officials at most of the agencies in our review told us that more explicit coverage to promote the card in the FAR would be helpful, although some were concerned that coverage not be too restrictive. While agencies have their own regulations and policies for card use, those documents typically refer to the FAR for guidance. In fact, as far back as 1989, Health and Human Services identified the need for purchase card coverage in the FAR and agency regulations. Health and Human Services noted then that, like all agencies, it was being encouraged to use the purchase card, but FAR coverage had not yet been developed and agency regulations would naturally follow the FAR, rather than precede it. With the current coverage, some agencies in our review had differing opinions or were confused about how the card could be used above and even below the micropurchase threshold. Areas of confusion or dispute included whether the card could be used to pay for services or nonexpendable items. The FAR does not provide guidance on usage of the card comparable to the guidance provided for imprest funds, purchase orders, and blanket purchase agreements. Each of those has a separate section in the FAR. The purchase card, on the other hand, is only discussed in the FAR’s micropurchase section. That section states that use of the card is not limited to micropurchases if otherwise authorized under agency procedures. However, no guidance is provided for such use. As the FAR was being revised to incorporate changes from FASA, GSA commented on the proposed changes during the public comment period. GSA commented that the small purchase/simplified procedures section was illogical, confusing, and of limited usefulness to the program staff. Specifically, GSA said that the proposed language did not provide the necessary encouragement to agencies to make maximum effective use of the card and did not promote the objectives of Congress or the executive branch. GSA added that even with the proposed changes, the FAR would provide more coverage for imprest funds, which the government wants to deemphasize, than for purchase cards, which the government wants to encourage. An interagency team has looked at how the FAR addresses small purchases/simplified procedures to determine what revisions may be necessary and has proposed FAR language. In its proposal, the team has included a separate section on the purchase card. A proposed FAR rule is planned for issuance later this year. Most of the agencies in our review have identified the potential to increase their savings or efficiencies gained from card use by reengineering their programs or using automated tools to improve their processes. Agency officials told us that they are interested in communicating with each other about their efforts and have identified instances where tools developed by one agency can be useful to other agencies. However, we found no effective system for agencies to communicate with each other about their successes or problems. In fact, several agencies in our review identified problems that we learned had been addressed or partially addressed by other agencies’ efforts. Agencies have found that efforts to improve their programs can be very resource-intensive, requiring input from several offices, top management support, and good communication. However, they have also found that such efforts can have a significant payoff. Agriculture, for example, initially emphasized purchase cards because it found that the process cost was less than half of that for a purchase order, or $32 versus $77. It has since determined that reengineering can cut the process cost almost in half again. By automating the billing and payment processes as recommended by a cross-functional team guided by a top management review board, Agriculture expects to reduce the card process cost to $17. According to its business process reengineering report, this could lead to over $45 million in savings from fiscal years 1996 through 2000. This amount is in addition to what is already saved by using cards instead of purchase orders. Agriculture has already eliminated an administrative payment system costing $400,000 per year. Other agencies have also automated or reengineered their payment processes, including the Social Security Administration, Veterans’ Affairs, and, within the Department of Transportation, the Coast Guard, which accounts for about 70 percent of Transportation’s card purchases. Agency officials told us that, by improving how they pay their bills, they have also increased their potential for rebates. In fact, from November 1994 through July 1995, the most current period for which data were available, Transportation was the largest rebate recipient. Over that time period, Transportation received 34 percent of all rebates paid to agencies, even though it accounted for only 8 percent of sales. In addition to these efforts, some other agencies or organizations within agencies have developed automated tools to address particular problems. For example: Within the Department of Defense, the Defense Mapping Agency developed a database intended to help streamline the process for reconciling cardholder statements and maintain accounting information and property accountability for goods and services purchased with the card. Within the Department of Transportation, the Federal Aviation Administration developed a database intended to help cardholders reconcile their statements. The Postal Service developed surveillance software, discussed earlier in this report, intended to improve program oversight. GSA and, within Defense, the Army Management Engineering College, developed an interactive program intended to improve training for cardholders and approving officials. Agencies have found that their improvement efforts can be useful to other agencies. For instance, the Postal Service has demonstrated its surveillance software for purchase card program coordinators from 15 agencies and inspectors general from 10 agencies, both civilian and military. Almost all officials attending the demonstrations believed that the software was worth deploying governmentwide and that it would be useful for finance, accounting, inspectors general, and program management offices. The Postal Service plans to make its software available to other agencies. Officials said the software is being provided to the Departments of Transportation, Treasury, and Commerce. In another example, after the Defense Mapping Agency’s database was profiled in an issue of “Government Computer News,” officials said they were inundated with requests for information from other agencies, both military and civilian. They sent copies of their database to more than 90 agencies and offices in 32 states and Europe. Although agencies want to share information about their innovations, we found that innovations were not always well known outside the agencies that developed them. We also found no effective means for agencies to communicate with each other about their problems or improvements. Some agency officials share information through informal networks and there are some formal multiagency forums, such as GSA and RMBCS purchase card conferences, the Purchase Card Council, and the Chief Financial Officers Council’s Financial Implementation Team for Electronic Commerce. However, these mechanisms are not readily accessible to all officials, particularly those who are away from headquarters or who are newer to the program. Further, there can be considerable lag time between when an agency identifies a problem or develops an innovation and when a formal interagency meeting or conference is scheduled. Without a more effective means of communication, agencies may not be able to build on the successes and failures of other agencies to improve their purchase card programs. Officials at the Office of Federal Procurement Policy stated that Acquisition Reform Net, a government Internet site for acquisition reform information and discussion, could be used for this type of communication. By its nature, it would be available to agency officials nationwide and could be used to disseminate information or questions quickly. Using the purchase card has helped government agencies achieve administrative savings and efficiencies, absorb some of the impact of staffing cuts, and improve their abilities to fulfill their missions. However, the FAR does not provide guidance on usage of the card comparable to the guidance provided for imprest funds, purchase orders, and blanket purchase agreements. Further, agencies have no effective means to communicate with each other about their problems and innovations. We therefore recommend that the Administrator for Federal Procurement Policy ensure, in conjunction with the Federal Acquisition Regulatory Council, that the FAR provides clear guidance on the appropriate uses of the purchase card as a means for making payments, purchases, and orders from established contracts and establish a site on one of the government’s electronic media, such as the Acquisition Reform Net on the Internet, to facilitate agencies’ efforts to exchange information about problems or progress with purchase card use. In commenting orally on a draft of this report, the Office of Federal Procurement Policy said that it had no major objections. It obtained informal comments from the agencies we reviewed and found that they also indicated no material objections to our report, although several agencies stressed that any FAR coverage should emphasize flexibility and not be restrictive. We have incorporated in our report, where appropriate, editorial and technical comments that were provided. To obtain background and program history information, we reviewed executive and congressional guidance, including Executive Orders 12931 and 12352; the Vice President’s NPR and subsequent updates; FASA; the FAR; and agency regulations, policies, and directives. We also interviewed officials from the Office of Management and Budget’s Office of Federal Procurement Policy, GSA, and the Interagency Purchase Card Council. We obtained card program statistical data from RMBCS and GSA for the government as a whole and by agency for 1989 through 1995. The data included number and dollar value of transactions and rebates and the number of cardholders. We did not validate the computer-generated data; however, we discussed data reliability and quality with all of the agencies in our review and with GSA. We reviewed purchase card programs in the agencies with 12 of the largest programs, including the 9 largest programs judged by either dollars or transactions (see app. I). In addition to obtaining data on program size, we obtained data on potential for growth, length of involvement in the purchase card program, special program initiatives, and administrative responsibility. To determine the extent to which card use has resulted in administrative savings or other benefits, we interviewed purchase card program coordinators, officials from agency finance and procurement offices, and officials from GSA, NPR, and the Office of Federal Procurement Policy. We also obtained and reviewed cost-benefit studies, management reports, and reengineering studies. We discussed the methodology used for those studies, and the subsequent findings and projections, with appropriate personnel. We did not verify the cost data and savings projections in those studies. To determine the potential for continued growth in purchase card use, we examined trends in card use and projections made by the agencies in our review, GSA, and RMBCS. We also reviewed agency and federal directives encouraging, requiring, or setting goals for card use. To identify protections against misuse, we interviewed appropriate personnel at agencies and audit organizations. In addition, we reviewed the RMBCS contract guide, agency purchase card procedures and regulations, and internal audit and inspectors general reports. To identify opportunities to improve agency card programs, we interviewed appropriate agency personnel and reviewed public comments on proposed FAR changes stemming from FASA and agencies’ plans to automate or reengineer portions of their systems or processes. We also witnessed demonstrations of the Postal Service’s surveillance software, the Social Security Administration’s and the Coast Guard’s automated payment systems, the Defense Mapping Agency’s and the Federal Aviation Administration’s tracking databases, and GSA’s and the Army Management Engineering College’s training material. We conducted our work from May 1995 through April 1996 in accordance with generally accepted government auditing standards. We are sending copies of this report to the Director, Office of Management and Budget; the Administrator for Federal Procurement Policy; the Administrator, GSA; and officials at the agencies in our review. Copies will also be made available to others upon request. Please contact me or my Associate Director, David Cooper, at (202) 512-4841 if you or your staff have any questions concerning this report. Major contributors to this report were David Childress, Maria Storts, and Diane Handley. Department of Agriculture, Washington, D.C. Department of Commerce, Washington D.C. Department of Health and Human Services, Washington, D.C. Department of Interior, Washington, D.C. Department of Transportation, Washington, D.C. Department of the Treasury, Washington, D.C. Department of Veterans Affairs, Washington, D.C. Social Security Administration, Baltimore, Md. U.S. Postal Service, Washington, D.C. Department of the Air Force Department of the Navy The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a legislative requirement, GAO reviewed federal agencies' progress in using purchase cards, focusing: (1) the extent to which card use has led to administrative savings or other benefits; (2) the potential for growth in card use; (3) agencies' management controls; and (4) opportunities to improve agencies' purchase card programs. GAO found that: (1) the use of purchase cards for small purchases can reduce agencies' mission support, labor, and payment processing costs 50 percent by moving simple purchases from procurement offices to program offices and consolidating payments; (2) some agencies have found that purchase card use has helped them absorb the impact of administrative staff reductions and improve service delivery; (3) although the use of purchase cards has increased since 1990, there is potential for greater card use; (4) in fiscal year 1995, the average purchase card transaction was $375, well below the micropurchase threshold of $2,500; (5) there is no evidence of increased abusive use of purchase cards despite tremendous growth in the purchase card program; (6) electronic records of all purchase card transactions allow close and detailed monitoring of card use; (7) agencies' management controls are adequate to protect the government's interest and agencies are addressing control weaknesses and failures to follow proper procurement procedures; (8) most agencies are trying to improve their card programs by emphasizing card use, reengineering their processes, and increasing their use of automation; and (9) opportunities to improve the card program include revising the Federal Acquisition Regulation (FAR) to address card use more thoroughly and establishing a mechanism so agencies can share their innovations and experiences. |
GPRA is intended to shift the focus of government decisionmaking, management, and accountability from activities and processes to the results and outcomes achieved by federal programs. New and valuable information on the plans, goals, and strategies of federal agencies has been provided since federal agencies began implementing GPRA. Under GPRA, annual performance plans are to clearly inform the Congress and the public of (1) the annual performance goals for agencies’ major programs and activities, (2) the measures that will be used to gauge performance, (3) the strategies and resources required to achieve the performance goals, and (4) the procedures that will be used to verify and validate performance information. These annual plans, issued soon after transmittal of the President’s budget, provide a direct linkage between an agency’s longer-term goals and mission and day-to-day activities. Annual performance reports are to subsequently report on the degree to which performance goals were met. The issuance of the agencies’ performance reports, due by March 31, represents a new and potentially more substantive phase in the implementation of GPRA—the opportunity to assess federal agencies’ actual performance for the prior fiscal year and to consider what steps are needed to improve performance and reduce costs in the future. The role of the Department of Labor is to promote the welfare and economic security of the nation’s workforce and ensure that workplaces are safe. To carry out its mission, the agency oversees a broad array of programs, from those that help students’ transition into the workforce to those that inspect the workplace or ensure the integrity of pension plans for retirees. These activities affect more than 100 million workers and more than 10 million employers. This section discusses our analysis of Labor’s performance in achieving its key selected outcomes and the strategies the agency has in place, relating to human capital and information technology, for achieving these outcomes. Labor reported making progress toward its outcome of reducing injuries, illnesses, and fatalities in the workplace. Labor reported that it met four of the six goals we reviewed under this outcome and substantially achieved another goal. In several cases, Labor exceeded the goal. For example, since fiscal year 1995, injury and illness rates declined by 20 percent in almost 68,000 workplaces where Labor intervened through efforts such as inspections, exceeding the target goal of 50,000 workplaces. In addition, for many of the goals, Labor presented data showing performance trends over a number of years. However, assessing progress for some goals was difficult because it was not always clear which fiscal year goal and target level was being assessed. Like last year, Labor did not meet its fiscal year 2000 goal to reduce fatalities in the construction industry. However, Labor provides a plausible explanation for why external factors may have contributed to this shortfall—demand for more construction workers in a booming economy that likely resulted in a workforce with less experience combined with an increased pace and volume of work. Labor also provides clear strategies that appear likely to achieve the goal in the coming year, such as providing grants to develop, conduct, and expand safety and health training and partnering with local contractor organizations to raise safety awareness and bring training to Spanish-speaking contractors. Another goal under this outcome was reported by Labor as “substantially achieved,” a new category used in the fiscal year 2000 report when at least 80 percent of the goal is attained. The goal is in two parts: to reduce nonfatal mining injuries and to reduce mining fatalities. Labor met the first part of the goal but did not meet the second part of the goal to reduce fatalities below the targeted 5-year average of 89 fatalities. There were 89 fatalities, bringing Labor very close to achieving the goal. Labor fully described actual progress toward the goal and identified the probable cause of the shortfall. Assessing progress on three of the goals under this outcome was complicated because complete fiscal year 2000 data were unavailable. For these goals, Labor reported progress using fiscal year 1999 data and targets instead of fiscal year 2000 data and targets. For example, Labor’s fiscal year 2000 report stated that the fiscal year 1999 goal to reduce injuries and illnesses by 3 percent in industries characterized by high hazards was exceeded based on calendar year 1999 data. Labor could not assess achievement of its fiscal year 2000 goal with a target level of 7 percent because the necessary data would not be available until December 2001. Where complete data were not available, Labor followed OMB guidance calling for agencies to indicate when the data will be available, include performance information from the preceding year, and include the actual information in the subsequent report. However, tracking progress can be confusing because the fiscal year 2000 report lists only the fiscal year 1999 target level and omits the fiscal year 2000 target level. Strategies to achieve goals under this outcome appear to be clear and reasonable and often used information technology, coordination with other federal agencies, and program evaluation to achieve the goals. None of the goals involved human capital strategies. Labor addressed strategic human capital management through agency-wide management goals rather than linking such strategies to specific programmatic goals or outcomes. Labor reported that it will use information technology, including Web-based courses, to provide safety and health training and interactive computer systems to help employers improve hazardous conditions in the workplace. In addition, Labor has been evaluating the effectiveness of the various interventions— such as inspections—it uses to reduce injuries and illnesses. Labor’s fiscal year 2002 plan calls for more program evaluations of its safety and health programs, policies, and specific standards to assess how effectively they reduce workplace injuries and illnesses. Other strategies mentioned in the fiscal year 2002 plan include coordination with other federal agencies, such as the Small Business Administration, to improve workplace safety and health. The importance of coordinating with other federal agencies is highlighted in our previous work on safety at hazardous material facilities. In October 2000, we reported that Labor and at least three other federal agencies were not coordinating requirements, such as training for hazardous material workers. We recommended various ways to improve coordination, such as determining whether agency agreements were effective and consolidating training requirements. Labor acknowledged points of overlap regarding worker training and did not object to the recommendations. Some of the strategies described in Labor’s fiscal year 2002 plan were more clearly linked to achieving goals than in the 2001 fiscal year plan. For example, in our prior review of Labor’s fiscal year 2001 plan, we found that Labor did not sufficiently explain how certain programs, such as the “Consultation” and “Voluntary Protection Programs,” would reduce injury and illness rates. The fiscal year 2002 plan now explains how these strategies will be effective. Labor’s 2002 performance plan retained many of the same performance goals from the fiscal year 2001 plan, and for 2002, Labor added a new goal measuring the effectiveness of voluntary, cooperative efforts between employers and Labor in reducing injuries, illnesses, and fatalities. For several of the goals it retained, Labor raised the target levels, allowing the agency to demonstrate progress toward achieving its overall strategic goals. This includes increasing the target level for its unmet goal to reduce construction industry fatalities from 11 percent in 2001 to 15 percent in 2002, even though Labor did not meet its previous target of 3 percent in fiscal year 1999 and 7 percent in 2000. Labor acknowledges that this is an ambitious target but indicates that recent program initiatives are expected to yield positive results in fiscal year 2001. Labor reported making progress in achieving its outcome to ensure that job training participants get and keep jobs, with performance meeting many of the goals and often exceeding them. For example, Labor’s Women’s Bureau, in collaboration with other organizations, prepared 31,588 women for the workforce, exceeding the target level of 25,000. Labor presented data showing performance trends over a number of years for some of the goals. Table 1 shows the goals we considered under this outcome. Labor reported meeting six goals and substantially achieving two goals. These two goals focused on worker retraining—one related to the Job Training Partnership Act (JTPA) dislocated worker program and another related to the Trade Adjustment Assistance (TAA) and North American Free Trade Agreement-Transitional Adjustment Assistance (NAFTA-TAA) program. For both goals, the target level for the average wage replacement rate was exceeded, but the portion of the goal addressing employment rates fell short. The target level to employ JTPA dislocated workers was 74 percent, but actual performance was 71 percent; the employment target level one quarter after JTPA program exit was 76 percent, but actual performance was slightly lower at 75 percent. Labor notes that it did not fully meet the goal because several states that were high performers under JTPA could not be included in the calculation for fiscal year 2000. These states no longer collect data under JTPA; they collect data under the newly implemented Workforce Investment Act (WIA). For the goal related to the TAA and NAFTA-TAA programs, Labor reported that the target level to employ NAFTA-TAA program participants was 72 percent, but actual performance was about 65 percent. Labor attributes the shortfall to continued difficulties in getting complete and accurate data. The report discusses efforts to improve reporting and explains how the revised reporting system for fiscal year 2001 should help states provide more complete and accurate information. Our ongoing work on NAFTA- TAA may help shed light on the need for comprehensive performance data to determine the efficacy of training and job placement approaches. In our prior work, we recommended that Labor establish: (1) an effective performance measurement system for these programs, (2) procedures to allow Labor to certify workers within required time frames, and (3) more effective internal controls and oversight procedures to decrease the likelihood that ineligible workers are given benefits. Labor appears to be making significant efforts to respond to these recommendations. Labor is redesigning its data reporting system to match the system used in WIA and is developing a detailed manual on data reporting for states and localities. Labor has also established processing procedures to improve the time frame within which petitions are reviewed. Although Labor is reviewing data to identify ineligible recipients, the performance report does not identify what steps are being taken to develop internal controls. Assessing progress toward meeting the goals under this outcome has been complicated by the transition from JTPA to WIA and the lag in available performance data for fiscal year 2000. Labor provides a reasonable discussion of its fiscal year 2000 performance and its plans for transitioning to WIA performance measures for the coming year. However, a clearer description of the challenges posed by this transition would help to assess whether its plans are sufficient to facilitate meeting next year’s goals. In addition, the three JTPA goals and the Job Corps goal were assessed using fiscal year 1999 target levels and not target levels set in Labor’s fiscal year 2000 plan. This lag in available data arises because the programs run on a program-year basis that begins 9 months after the fiscal year for which program funding is received. Finally, the goal to assist women in the workforce is very broad, and the performance measure fails to capture what services participants are receiving or accessing—a weakness we observed in our previous review of Labor’s performance report. The strategies Labor uses to achieve the goals we reviewed under this outcome are largely clear and reasonable. Some goals use strategies related to information technology; one goal includes strategies related to human capital management. Labor provides a clear explanation for training needs when discussing its goal to award Youth Opportunity grants, explaining that experienced staff coaches will help train case managers, teach youth development strategies, and assist in building relationships with other organizations that serve youth. Yet other strategies are unclear. In the fiscal year 2000 report, when discussing efforts to improve data integrity in the JTPA disadvantaged adult program, Labor mentions “providing system-wide staff training, where necessary,” without adequately explaining what types of training might be required or how they will assess when and where training will be needed. Finally, our previous review noted that the discussion of this goal contained very little information on the quality of performance data used to assess it; however, this year’s report is improved because it provides information on Labor’s efforts to validate the program data it is using. In its fiscal year 2002 performance plan, Labor continues to focus its efforts on increasing the earnings of participants in certain programs. Target levels are raised for several fiscal year 2002 performance goals, allowing Labor to demonstrate progress toward achieving its goals over time. However, the transition from JTPA to WIA will make performance on some goals difficult to compare. In spite of transition problems, Labor anticipates that the implementation of WIA will significantly improve its reporting capabilities and program outcomes. The incorporation of job retention measures in its fiscal year 2002 plan for WIA goals provides an important dimension of program performance, and our ongoing work on WIA performance measures may help Labor assess the effectiveness of the measures proposed for WIA. Labor reported making progress toward its outcome of protecting worker benefits. Labor reported meeting all but one of its fiscal year 2000 goals related to protecting worker benefits. Table 2 shows the goals we reviewed for this outcome. For example, Labor reported making significant progress in its goal of reducing the average time frame to decide final benefit levels for participants in pension plans taken over by the Pension Benefit Guaranty Corporation (PBGC). By focusing its newly streamlined case processing strategies on the oldest cases during fiscal year 2000, PBGC reduced the average time frame from between 5 and 6 years to between 4 and 5 years. In its 2002 performance plan, Labor reports that its goal is to further reduce this timeframe to 3 years. In its annual report, Labor presented data showing performance trends over a number of years for several goals. The performance plan shows that it has increased target levels for some goals under this outcome, modified others, and discontinued one. However, in some cases, the discussion of the impact of these changes was incomplete or unclear, as was the discussion of the strategies Labor proposes to accomplish the goals. Labor reported that it failed to meet only one of its performance goals in the area of protecting worker benefits—paying UI claims fairly and promptly—which it reported as “substantially achieved.” Labor established two separate criteria for this goal—one that judged whether eligibility was determined fairly and another that judged whether workers received their UI benefits on schedule. Out of a goal of 24 states, 23 met the criteria for determining eligibility fairly. Labor reports that an additional six states came very close. For the other portion of the goal— workers receiving their UI benefits on schedule—Labor reported that it met the goal of 47 states. Labor explains that the lower performance level for fairly determining eligibility reflects, in part, states’ focus on cost- saving efforts, such as telephone claims-taking. Furthermore, Labor has been tightening the underlying review process making it harder for states to meet the criterion. Despite missing the goal, Labor reported that it has increased the threshold for fiscal year 2002—30 states must meet the eligibility fairness criteria and 49 states must provide UI benefits on schedule. Labor provides reasonable strategies that appear likely to help achieve this goal, such as engaging in ongoing discussions with states, employers, and UI claimants to improve communication, identify issues, and promote input in the design of the programs. One of the goals that Labor reported meeting in fiscal year 2000, through the efforts of the agency’s Pension and Welfare Benefits Administration (PWBA), was to increase by 2.5 percent both (1) the number of closed investigations of employee pension and health benefit plans where assets are restored (to 819) and (2) the number where prohibited transactions are corrected (to 301). During fiscal year 2000, Labor combined the data for pension and health benefits, but tracked separate goals for each element— assets restored and prohibited transactions corrected. Beginning in its fiscal year 2001 plan and continuing in its 2002 plan, Labor has created two separate goals—one for pensions and another for health benefit plans. This move could make it easier to track outcomes for the two separate benefit components. However, Labor aggregated goals for the individual elements into a single targeted goal that covers both assets restored and prohibited transactions corrected. In addition, it added two more elements to this aggregate goal—the number of cases in which participant benefits are recovered and the number in which plan assets are protected from mismanagement. As a result, it will be difficult to assess whether the goal is actually being met, because success in one element of the goal may obscure failure in another. Performance goals for 2002 raise the target levels for several measures and include a new goal to promptly review applications for foreign labor certifications to ensure that aliens admitted to work will not adversely impact domestic workers’ wages or working conditions. The importance of this goal was highlighted in our earlier work on the H-2A program for agricultural workers and the H-1B program for highly skilled foreign workers. Additionally, in our major management challenges series, we cited weaknesses in strategic planning and resulting problems in organizational alignment that could affect the agency’s ability to protect worker benefits. Specifically, we found that having multiple agencies manage these programs resulted in program inefficiencies that confuse participants and delay the application process. We recommended ways to simplify and shorten the H-2A application process and better protect H-2A and domestic workers, including a recommendation that Labor collect data on its performance in meeting deadlines and use these data to monitor and improve its performance. We also recommended that Labor consolidate program authority for H-2A workers into a single agency within Labor to increase the effectiveness of enforcement. Labor has made efforts to implement these recommendations, and has completed some. In a September 2000 report, we suggested that the Congress consider eliminating Labor’s role in reviewing H-1B petitions because its review is limited by law and duplicates the efforts of the Immigration and Naturalization Service. Labor disagreed with this suggestion. As a result of accomplishing a portion of the goal related to establishing prevailing wage rates for the construction industry as required by the Davis-Bacon Act, Labor reported that it is undertaking a reengineering effort to apply new information technologies and processes to the existing Davis-Bacon survey program to improve its accuracy, timeliness, and participation. Labor discontinued the goal for fiscal year 2002; but neither Labor’s fiscal year 2002 performance plan nor its fiscal year 2000 performance report discussed how it plans to monitor the law’s survey requirements in the interim. In its fiscal year 2002 performance plan, Labor continues a goal for protecting workers’ benefits that we previously criticized—increasing by 1 percent the number of workers who are covered by a pension plan sponsored by their employer. In our review of Labor’s fiscal year 1999 performance report and fiscal year 2001 plan, we said that Labor could develop a more useful measure by focusing on the proportion of the total workforce covered by pensions. In addition, the number of workers with pensions is affected by a multitude of factors outside of Labor’s control and, as a result, it is unlikely that a valid relationship exists between Labor’s efforts and the outcome as measured. We have suggested that Labor use program evaluation methods to determine whether such a relationship exists and that Labor develop intermediate outcomes or output-oriented indicators that have a clearer relationship with the activities it undertakes. In its fiscal year 2002 performance plan and fiscal year 2000 report, Labor does not mention such efforts and continues to rely upon educating customers regarding the importance of retirement planning as the primary strategy for achieving this outcome. Our ongoing work to assess Labor’s retirement savings education efforts under the Savings Are Vital to Everyone’s Retirement Act (SAVER) of 1997 may shed light on this issue. Labor’s fiscal year 2002 plan describes several program-specific strategies for achieving the outcome of protecting worker benefits. The strategies often appear to be clear and reasonable; none directly address human capital management. Some strategies emphasize the use of new information technologies, such as the use of new document imaging hardware to convert older paper files into electronic files. Other strategies in the plan were not specific or clear enough to be able to assess whether they would help Labor achieve the goal. For example, to improve the fairness and timeliness of UI benefits, Labor proposes developing and implementing a UI performance management system “…to enhance performance planning, facilitate performance achievement, and assess the effectiveness of program improvement efforts through capacity building, technical assistance, best practices, and other key initiatives.” Similarly, in last year’s review, we noted that this strategy did not sufficiently explain how Labor will achieve this goal. Labor’s 2002 performance plan does not discuss several strategies it is undertaking to serve pension plan participants more effectively and efficiently. In prior work, we found weaknesses in PBGC’s contract management—such as inadequate links between contracting decisions and long-term strategic planning and a lack of centralized performance data to monitor contractor performance—and we made several recommendations to address these problems. For example, we recommended that PBGC undertake a comprehensive review to better link staffing and contracting decisions to its long-term strategic planning process so that it will be prepared for future workload changes and that it compile performance data centrally to better manage contractors. PBGC has begun work on these efforts, but these efforts are not reflected in the performance plan because Labor does not consider them to be a key strategy in achieving this goal. Labor reported that it made progress toward the key selected outcome of transitioning individuals from welfare dependency to self-sufficiency. For this year, Labor’s single goal under this outcome has incorporated a measure for job retention and one for increased earnings, which are critical dimensions of program performance. This is an improvement over the fiscal year 1999 measure, which did not address job retention and targeted wage rates. Labor reported that it exceeded the goal with 84 percent remaining in the workforce for six months with an average earnings increase of 59 percent, surpassing the target levels of 60 percent that remained in the workforce with an average earnings increase of 5 percent. Labor acknowledged data limitations in the earnings increase rate of 59 percent, reporting that this rate may be inflated due to inconsistent reporting by Welfare-to-Work grantees. It is working to improve reporting methods by grantees and will issue revised reporting instructions. This is an improvement over Labor’s fiscal year 1999 report which, as noted in our previous review, did not provide information on the quality of performance data. Although Labor reported that it exceeded the goal, it did not provide detailed information on how many participants have been served, which would clarify the impact the program has had to date—a weakness we observed in our previous performance review. At the same time, Labor acknowledges that participation levels lag and has requested and received congressional approval to extend the period over which grantees may expend their funds. Although this time period has been extended, the Welfare-to-Work grant program was only funded in fiscal years 1998 and 1999 and no new funding is expected. In future plans, Labor might consider discussing the limited nature of the program and providing long- term strategies for serving this population when funding expires in future plans. In general, Labor’s strategies for meeting the goal in fiscal year 2002 are plausible. None of the strategies involved the use of human capital management. Labor plans a pilot program to fund employers to upgrade the skills of Temporary Assistance for Needy Families (TANF) participants, allowing the employers to then backfill entry level positions with Welfare-to-Work participants. In addition, Labor will target development of whole family programs to help participants, primarily fathers, focus on their children and help the custodial parent access community resources to achieve self-sufficiency. The strategies also involved program evaluation to assess the effectiveness of Welfare-to- Work initiatives, including those undertaken by both formula and competitive grantees. A set of recently issued evaluation reports tell us that program implementation has advanced, but that participation remains low and the projected scale of the programs continues to be modest. Labor’s report does not explicitly state why performance goals have been revised; however, it appears that Labor is seeking increasingly higher levels of performance for this goal, allowing the agency to demonstrate progress toward achieving its overall strategic goals. Labor has raised the target to 67 percent of participants who will be employed for 2 consecutive quarters after placement, with an average earnings increase of 7 percent. For the selected key outcomes, this section describes major improvements or remaining weaknesses in Labor’s (1) fiscal year 2000 performance report in comparison with its fiscal year 1999 report and (2) fiscal year 2002 performance plan in comparison with its fiscal year 2001 plan. This section also discusses how the agency’s fiscal year 2000 report and fiscal year 2002 plan address concerns raised by GAO and OIG. Labor made improvements to its fiscal year 2000 performance report from its fiscal year 1999 performance report. In our review of Labor’s fiscal year 1999 report, we identified as a weakness the lack of information the agency presented concerning the quality or credibility of performance data relative to the performance goals. Labor’s fiscal year 2000 report greatly improves its presentation of such information by identifying performance data challenges, steps it will take to verify and validate its performance data, and the implications of data limitations for assessing performance. For example, the agency reported that it completed an audit of the validity and reliability of its workplace injury and illness data and found the data to be reasonable and accurate. The agency will improve the audit program by, among other things, maintaining a standard sampling universe so that trends in the universe estimates can be tracked. As previously noted, Labor also recognized that Welfare-to-Work data may be subject to error due to misinterpretation of reporting guidance by grantees, resulting in overestimates of increased earnings rates for participants. Labor describes a major effort it will undertake to gauge the extent of inaccurate reporting, correct these reports, and improve the reporting instructions and format. In our previous review, we observed that the fiscal year report did not directly or comprehensively address its progress in resolving major management challenges identified by GAO and Labor’s OIG. The fiscal year 2000 report makes significant improvement by including a summary of the most serious management and performance challenges identified by OIG, as required by the Reports Consolidation Act of 2000, and discussing strategies Labor will use and progress it has made in resolving these challenges. Labor more clearly identified when it reported on goals that were assessed using older data and target levels when current fiscal year 2000 data were not available. Specifically, last year’s report listed goals in the appendix as met or not met, but did not clearly indicate on which fiscal year goal and target level the assessment was based. This year’s report clearly indicates the year of the data and target level on which the goal was assessed. In addition, Labor’s fiscal year 2000 report also followed OMB guidance calling for agencies to identify the goals for which complete data are not available, indicate when the data will be available, include performance information from the preceding year, and include the actual information in the subsequent report. However, tracking progress is still difficult because the fiscal year 2000 report does not always list the fiscal year 2000 target level when the agency had assessed a goal using older data and target levels. One concern about Labor’s fiscal year 2000 report is that Labor added the category “substantially achieved” to its assessment categories “met” and “not met” when at least 80 percent or more of the targeted goal was attained. Although OMB allows agencies to use a third category to assess goals when the difference between the target level and actual performance is slight, Labor should be aware of the potential risk in using the category substantially achieved. Relying on this indicator could mask an understanding of actual progress in achieving goals and affect an agency’s vigilance in its efforts to achieve progress. It could give an impression of successful performance across all goals or on a specific goal when actual performance might be as much as 20 percent below the target. OMB guidance calls for agencies to compare actual performance with the projected performance level set out in the plan and explain why the goal was not met. We found that, for most of the goals we reviewed that Labor assessed as substantially achieved, the agency was very close to meeting the goal, reported its actual performance against planned performance, and explained the shortfall. Another concern with this year’s report regards Labor’s presentation of its future plans. Last year’s performance report included a section entitled “Goal Assessment and Future Plans” that highlighted, among other things, strategies that would be used to achieve a goal in the future. This year’s fiscal year 2000 report eliminated information on future plans, calling the section “Goal Assessment.” Labor officials told us that, due to the transition in the administration and uncertainty about the agency’s future direction and goals, they determined that any discussion of future plans would be premature and could be subject to change. We understand Labor’s concern; however, we are hopeful that future performance reports will return to the format included in the fiscal year 1999 report because it provides more linkage between the performance report and subsequent performance plans and reports. We found a limited number of substantive changes between Labor’s fiscal years 2001 and 2002 performance plans. Generally, the fiscal year 2002 plan continues to provide a clear progression toward intended outcomes. For example, for several goals aimed at reducing injuries, illnesses, and fatalities, only the numeric targets have changed (from 11 percent to 15 percent from the baseline in selected industries and occupations) and not the goals themselves, allowing Labor to demonstrate progress toward achieving its outcomes. In addition, the fiscal year 2002 plan now links budget authority and outlays to both the strategic and outcome goals. This will provide a basis for assessing how the resources are contributing to accomplishing the expected levels of performance. In our previous review of Labor’s fiscal year 2001 performance plan, we observed that Labor did not adequately discuss the steps it will take to verify and validate performance data, as well as the implications of data limitations for assessing performance. Labor significantly improved its fiscal year 2002 performance plan by providing more detailed information and by expanding its discussion to include data systems that were not cited in the 2001 plan. However, the plan still lacks sufficient information on how Labor will address the implications of certain data limitations. For example, employment and training programs, such as WIA, are increasingly relying on UI data to measure outcomes. However, these data suffer from significant time lags, are not readily shared from state to state, and do not cover all employment categories. While the 2002 plan cites the anticipated completion of a data system to track performance for key employment and training programs, it does not address the implications of these UI data limitations for assessing program performance or how these factors will be mitigated. The fiscal year 2002 performance plan could be improved by revising its information technology goal. Because the goal is broad and not directly measurable, it must include performance indicators that are specific, measurable, and related to the goal, according to GPRA, OMB Circular A-11, and related guidance. In addition, goals and indicators should be objective and quantifiable or defined in a way that allows an accurate determination to be made of how actual performance compares to the goal. Labor developed one broad performance goal for its outcome of improving organizational performance and communication through information technology: Improve automated access to administrative and program systems, services, and information. The goal uses eight indicators to measure and assess progress toward the goal. But these indicators are not always specific enough to be able to assess the agency’s plans or progress toward achieving its goal and do not allow for consistently accurate measurement of performance. For example, it is not clear that replacing the Remote Terminal Network (RTN)—one of the indicators— will help achieve the goal and improve access to information technology. Furthermore, it is not clear how the indicators will be aggregated to determine whether the goal has been achieved, which is especially important when the broader goal is not quantifiable or directly measurable. This section discusses Labor’s efforts to address major management challenges identified by GAO. This includes two governmentwide, high- risk areas—strategic human capital management and information security— and three major management challenges facing Labor that were identified in our performance and accountability series. Regarding strategic human capital management, we found that Labor’s fiscal year 2000 performance plan had goals and measures related to strategic human capital management, and the fiscal year 2000 performance report explained its progress in achieving these goals. Labor’s 2002 performance plan includes a goal to measure key aspects of strategic human capital management that had not been addressed in the 2000 report or plan. Furthermore, the report has helpfully divided management goals into human capital, financial, and information technology, making it easier to track progress from year to year and more clearly focus efforts on these areas. However, the fiscal year 2002 performance goal that addresses key aspects of strategic human capital management—similar to Labor’s information technology goal—is overly broad and vague and uses performance indicators that do not sufficiently measure the goal. The goal—The right people in the right place at the right time to carry out the mission of the department—encompasses a wide range of human capital issues, from recruitment and organizational alignment to skills training and workforce diversity. Given a goal so broad, care should be taken to develop indicators that can gauge whether the goal has been achieved. When goals are not measurable, OMB guidance states that the performance indicators should set out specific, measurable values related to the goal that will help determine goal achievement. Unfortunately, the number and nature of indicators that Labor proposes do not appear to provide all the data needed to fully assess goal achievement. Not all aspects of the goal are adequately addressed through the indicators Labor proposes, and those that are proposed are not always clearly linked to the goal and do not allow for accurate assessment of performance. For example, several indicators rely on opinion surveys to measure performance, which may involve subjective considerations or judgments. In addition, the indicators do not capture agency strategies that will be used to achieve the goal. For example, although the 2002 performance plan describes agency efforts to identify future workforce needs—such as skill gaps—and ensure the development and skills of its workers, the indicators do not reflect these efforts. Finally, it is not clear how the indicators will be aggregated to determine whether the goal has been met. With respect to information security, we found that, while Labor’s fiscal year 2000 performance plan did not have goals and measures related to information security, it described the agency’s efforts to address this challenge, and the fiscal year 2000 report described its progress on these efforts. The agency identified information security as a long-term management initiative in its fiscal year 2002 performance plan rather than a specific goal. The plan states that Labor has developed (1) an information security program that is being integrated into programs throughout the agency, (2) security plans for all Labor’s agencies, and (3) a security awareness program to train all employees. In addition to these governmentwide management challenges, we identified three major management challenges facing Labor: increasing the employment and earnings of America’s workforce, protecting the benefits of workers, and fostering safe and healthy workplaces. These challenges are generally similar to the key outcomes selected for Labor. Therefore, goals and measures included in the fiscal year 2000 report and 2002 plan that address these challenges are discussed under the outcomes. In general, Labor appears to be making progress in achieving the key outcomes. Labor has increased its target levels for some goals for fiscal year 2002 and generally provided sound strategies for achieving these new targets. We continue to have concerns about some of the measures Labor uses. We are most concerned about the way in which Labor addresses two of its management challenges—information technology and strategic human capital management. Given the breadth of these goals, goal achievement cannot be fully assessed with the performance indicators Labor proposes. Without better indicators that more accurately and comprehensively measure performance toward the goal, Labor will be unable to fully assess its progress in these areas. To ensure that progress toward performance goals can be accurately and fully assessed, and that performance indicators effectively measure the goal, we recommend that the Secretary of Labor revise its performance goals regarding strategic human capital management and information technology so that the performance indicators effectively capture efforts to achieve the goal. As agreed, our evaluation was generally based on the requirements of GPRA, the Reports Consolidation Act of 2000, guidance to agencies from OMB for developing performance plans and reports (OMB Circular A-11, Part 2), previous reports and evaluations by us and others, our knowledge of Labor’s operations and programs, GAO identification of best practices concerning performance planning and reporting, and our observations on Labor’s other GPRA-related efforts. We also discussed our review with Labor agency officials in the Office of the Assistant Secretary for Administration and Management. The agency outcomes that were used as the basis for our review were identified by the Ranking Minority Member of the Senate Committee on Governmental Affairs as important mission areas for the agency and generally reflect the outcomes for all of Labor’s programs or activities. For these outcomes, we identified goals that we believed to be clearly linked to the outcomes. The major management challenges confronting Labor, including the governmentwide, high-risk areas of strategic human capital management and information security, were identified by GAO in our January 2001 performance and accountability series and high-risk update and were identified by Labor’s OIG in December 2000. We did not independently verify the information contained in the performance report and plan, although we did draw from other GAO work in assessing the validity, reliability, and timeliness of Labor’s performance data. We conducted our review from April through June 2001 in accordance with generally accepted government auditing standards. We provided a draft of this report to Labor for its review and comment. Labor’s comments are in appendix II. Labor generally agreed with our findings and was pleased with our acknowledgement of its efforts to improve explanations about data quality and major management challenges. The agency also agreed with our recommendation to revise the performance indicators used to measure its progress toward achieving its goals on information technology and strategic human capital management. With regard to the issue we raised about using a third category— substantially achieved—Labor maintained that it will continue to use this category, but only when performance is very close to achieving the goal. We incorporated Labor’s comments and clarifications where appropriate. Labor commented on our observation that aggregating goals for individual elements regarding PWBA’s investigations of health and welfare plans into a single goal could make it difficult to assess performance. Labor plans to examine this observation further, but is concerned that establishing multiple, separate indicators would result in the selection of cases most likely to achieve the best results rather than selection of the most significant cases. Labor should be aware, however, that in using the current, aggregate goal, case selection may similarly result in the selection of cases from a range of categories for their potential to achieve the overall goal. Labor also commented that revising the goal to increase the number of workers covered by a pension plan to measure the percentage of the workforce, as we suggested, could distort the measure’s reliability. We disagree that revising the goal may hamper reliability, however, we are pleased that Labor said it plans to explore ways to improve the measure and evaluate which strategies most effectively expand coverage levels. Finally, in response to our concern that Labor lacked sufficient information to address certain data limitations, particularly the use of UI data, Labor provided helpful information that illuminates its strategies. We encourage Labor to incorporate this information in future plans. As arranged with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days after the date of this letter. At that time, we will send copies to appropriate congressional committees; the Secretary of Labor; and the Director, Office of Management and Budget. Copies will also be made available to others on request. If you or your staff have any questions, please call me at (202) 512-7215 or Dianne Blank at (202) 512-5654. Key contributors to this report were Ronni Schwartz, Abbey Frank, Mikki Holmes, and Bonnie McEwan. The following table identifies the major management challenges confronting Labor, which include the governmentwide, high-risk areas of strategic human capital management and information security. The first column lists the management challenges that GAO and Labor’s OIG have identified. The second column discusses what progress, as discussed in its fiscal year 2000 performance report, Labor made in resolving its challenges. The third column discusses the extent to which Labor’s fiscal year 2002 performance plan includes performance goals and measures to address the challenges that GAO and Labor’s OIG identified. We found that Labor’s fiscal year 2000 report discussed its progress in resolving many of these challenges. Of the agency’s 15 major management challenges, its performance plan had (1) goals and measures that were directly related to 9 of the challenges, (2) goals and measures that were indirectly applicable to 1 of the challenges, and (3) no goals and measures related to 5 of the challenges, but discussed strategies to address them or stated that these challenges, if not already resolved, will be resolved by the end of fiscal year 2001. | This report reviews the Department of Labor's fiscal year 2000 performance report and fiscal year 2002 performance plan required by the Government Performance and Results Act. GAO found that Labor appears to be making progress in achieving the key outcomes in its strategic plan. Labor has increased its target levels for some goals for fiscal year 2002 and generally provided sound strategies for achieving these new targets. GAO continues to have concerns about some of the measures Labor uses. GAO is most concerned about the way in which Labor addresses two of its management challenges--information technology and strategic human capital management. Given the breadth of these goals, goal achievement cannot be fully assessed with the performance indicators Labor proposes. Without better indicators that more accurately and comprehensively measure performance toward the goal, Labor will be unable to fully assess its progress in these areas. |
Section 6012 of the Internal Revenue Code requires individuals, businesses, and other taxable entities with income over a certain threshold amount to file income tax returns. While most individuals and businesses voluntarily comply with this requirement, millions do not. At the beginning of fiscal year 1993, IRS had an inventory of about 10 million known nonfilers—about 7 million individuals and about 3 million businesses that had not filed one or more required returns. IRS estimated that the amount of unpaid individual income taxes on returns due but not filed for 1992 alone was more than $10 billion. IRS identifies potential nonfilers in several ways. One of the more significant ways to identify potential nonfilers of individual income tax returns is through the document matching program. Under that program, IRS matches taxpayers’ returns with information returns (generally Forms W-2 and 1099) showing income, such as wages and interest, paid by third parties, such as employers and banks. When the match shows income but no corresponding tax return, a potential nonfiler is identified. IRS identifies business nonfilers by computer-matching filed returns with the business’ filing requirements. Once it has identified potential nonfilers, and after considering what resources are available, IRS decides what action to take. In 1993, IRS received about 114 million individual income tax returns. Almost all of those returns were for tax year 1992. For that same tax year, IRS identified 59.6 million potential individual nonfilers. Of the 59.6 million, IRS took no enforcement action on 54.1 million (91 percent), primarily because IRS subsequently determined that the individual or business had no legal requirement to file. Collection officials at IRS’ National Office and regional offices evaluated the remaining 5.5 million cases to determine the potential tax due. Cases that IRS judged to have the least potential, 2.5 million, or 46 percent, received a reminder to file. Cases judged to have medium potential, 0.6 million, or 11 percent, received up to 2 notices. Cases judged to have the highest potential, 2.3 million, or 43 percent, received up to 4 notices. Under IRS procedures, nonfiler cases that are not resolved during the notice process are assigned to either the automated Substitute-for-Return (SFR) program, an Automated Collection System (ACS) call site, or a district office. Generally, cases are assigned to the automated SFR program when (1) IRS has enough income information from other sources, such as information documents filed by employers and banks, to prepare a return for the nonfiler; and (2) the potential tax due meets established criteria. Other cases are assigned, using predetermined criteria, to ACS or a district office, where they are scored to establish working priority. Cases assigned to a district office are put in an automated inventory called the “queue” at the district office. Cases with higher estimated net tax yield are assigned to revenue officers in IRS’ Collection function. Revenue officers attempt to contact nonfilers and obtain delinquent returns through telephone calls, letters, or visits. Nonfiler cases with low estimated yield may remain in the queue indefinitely. Our objectives, addressed under our basic legislative authority, were to assess the results of IRS’ Nonfiler Strategy and identify any opportunities for IRS to improve future nonfiler efforts. To accomplish our objectives, we did the following: We interviewed IRS National Office officials responsible for overseeing the Nonfiler Strategy about planning and managing the Strategy and about its results. We interviewed officials and personnel at the Central, Mid-Atlantic, and Southeastern Regional Offices; Atlanta, Baltimore, Cincinnati, and Detroit District Offices; and Atlanta and Cincinnati Service Centers about their roles in the Nonfiler Strategy, their procedures for implementing the Strategy, and the results obtained. We chose the Central Region and Cincinnati District Office because of earlier work done at those locations. We selected the other locations because they had large inventories of nonfilers. The four district offices had 10 percent of IRS’ nonfiler inventory as of August 31, 1993. We interviewed Austin Compliance Center officials about their analysis of IRS’ process for identifying nonfilers and selecting nonfiler cases. We reviewed relevant IRS manuals, instructions, reports, and statistics. We reviewed IRS Internal Audit reports and met with Internal Audit personnel doing work in the nonfiler area. Because IRS’ Examination function redirected a significant number of staff to help with nonfiler cases during the Nonfiler Strategy, we took some specific steps directed at that aspect of the Strategy. To help identify the types of nonfiler cases worked by Examination staff, as well as how they were worked, we randomly selected 35 cases worked by Examination in each of the 4 district offices we visited. In each district, we selected 15 cases from the cases closed by Examination in fiscal year 1993, 15 cases from the cases closed by Examination in fiscal year 1994, and 5 cases that had been closed by Examination in fiscal year 1995 but were still physically located at the district offices when we visited them in November and December 1994. These 140 cases involved a total of 464 nonfiled returns. We also reviewed IRS’ account records as of February and May 1995 to determine whether the taxpayers in our sample cases remained compliant by filing returns in subsequent years. Our sample results are not projectable. Appendix I contains a profile of the nonfilers in our sample and a profile developed by IRS’ Statistics of Income Division from returns filed in fiscal year 1993 that were 360 days or more late. Much of the statistical data in this report on the results of IRS’ Nonfiler Strategy was taken from the Commissioner’s Nonfiler Report, a statistical report prepared by National Office staff responsible for overseeing the Strategy. After we finished our review and had drafted our report, IRS told us that the Commissioner’s Nonfiler Reports on which we had based our analyses were erroneous. IRS provided revised reports, which showed significant differences from the reports we had relied on. Also, the revised reports covered only 11 months of the fiscal year because data that IRS needed to reconstruct the reports for the full fiscal year were not available. We updated our report and, where appropriate, our analyses to reflect the revised data provided by IRS. We did not assess the data’s accuracy or reliability. We did our audit work from December 1993 through May 1995 in accordance with generally accepted government auditing standards. We requested comments on a draft of this report from the Commissioner of Internal Revenue or her designee. On December 4, 1995, we met with several IRS officials, including the National Director, Service Center Compliance; the National Director, Compliance Specialization; the Acting Director of the Office of Return Delinquency; and the Acting Director for Special Compliance Programs. They provided us with oral comments, which the National Director, Service Center Compliance, reiterated and expanded on in memoranda dated December 11, 1995, and February 12, 1996. Their comments are summarized and evaluated on pages 23 and 32 and are incorporated in this report where appropriate. IRS became increasingly concerned about the nonfiler problem in 1991, when its delinquent return inventory—which had been growing by about 12 percent a year—increased by 30 percent. In October 1992, IRS initiated a Nonfiler Strategy with the basic objective of bringing nonfilers into the system and keeping them there. During the planned 2 years of the Strategy, fiscal years 1993 and 1994, IRS took several positive steps to achieve that objective. Those actions included deployment of staff from the Examination function to work on nonfiler cases, an increased emphasis on nonfiler activities by other IRS functions, elimination of aged cases from inventory, cooperative working arrangements with states and the private sector, and implementation of a refund hold program. IRS considers the Nonfiler Strategy a success because, as a result of the actions noted in the preceding paragraph, IRS, among other things, (1) reduced the size of the nonfiler inventory, (2) eliminated unproductive cases that allowed IRS to focus its enforcement resources more effectively, (3) eliminated backlogs in the automated SFR inventory, and (4) increased the number of returns secured from individual nonfilers. While we acknowledge all of those accomplishments, our comparison of the results IRS achieved during the 2 years of the Strategy (1993 and 1994) with the results achieved in the year before the Strategy (1992) was inconclusive. Some of the data showed improved results compared with 1992, but other data showed the opposite. The results of the Strategy were also inconclusive when compared with IRS’ three goals. IRS achieved its goal of reducing the backlog of nonfiler investigations, but there is insufficient information with which to judge IRS’ success in achieving its other two goals. In that regard, it is unclear how much, if at all, voluntary compliance improved as a result of the Strategy. For example, IRS knows the extent to which nonfilers who were brought into compliance during the Strategy became noncompliant again, but it does not know how that rate of recidivism compares to years before the Strategy. Likewise, IRS did not have the comprehensive cost data needed to assess return on investment—a key component of IRS’ third goal. Also affecting an assessment of IRS’ results was the absence of measurable goals for such things as the number of overdue returns IRS expected to secure or the number of nonfilers IRS expected to bring into compliance during the Strategy. In our opinion, these various factors would make it difficult for IRS management to adequately assess its efforts during the Nonfiler Strategy and make informed decisions on the nature and extent of any future efforts. The objective of IRS’ Nonfiler Strategy, as described by the Commissioner of Internal Revenue in October 1993 testimony before the Subcommittee on Oversight of the House Committee on Ways and Means, was to bring nonfilers into the system and keep them there. The Commissioner cited three goals that IRS established to help achieve that objective: (1) use a combination of outreach and enforcement to improve taxpayer compliance and the identification of nonfilers, (2) eliminate the backlog in the number of nonfiler investigations by the end of fiscal year 1994 so that IRS can work individual nonfiler cases promptly, and (3) improve the way IRS directs its enforcement resources in working nonfiler cases so that it can employ the most effective techniques on different types of cases to achieve the highest return on its resource investment. A major feature of the Nonfiler Strategy was its crossfunctional approach to a problem that had primarily been the responsibility of one function—Collection. This approach increased the involvement of other functions, such as Examination, Underreporter, Taxpayer Service, and Public Affairs. In that regard, two major components of the Nonfiler Strategy involved the deployment of (1) revenue agents and tax auditors from the Examination function to work nonfiler cases and (2) staff from IRS’ Underreporter function to work SFR cases. According to IRS, the Examination and Underreporter functions redirected a total of about 4,000 staff years and 550 staff years, respectively, to those efforts in fiscal years 1993 and 1994. Another major component of the Nonfiler Strategy was to remove unproductive, low-priority cases from the nonfiler inventory. That inventory is the universe of nonfilers known to IRS and selected for some type of enforcement action. Within that universe are those cases that IRS has selected for possible detailed investigation—known as Tax Delinquency Investigations (TDI). According to IRS, at the start of fiscal year 1993, (1) the nonfiler inventory consisted of about 10.2 million individuals and businesses that had not filed at least 1 required tax return and (2) the number of TDI cases stood at 2.3 million. By the end of fiscal year 1994, IRS had reduced the nonfiler inventory to about 6.8 million cases, mostly by purging millions of cases that IRS deemed to have low potential because of their age. IRS plans to continue purging aged nonfiler cases annually. IRS also reduced the number of TDIs to 1.8 million cases through the deployment of additional resources to help with cases and through other efforts like the refund hold program, discussed later. Perhaps the most visible component of the Nonfiler Strategy and another example of its crossfunctional nature was IRS’ effort to encourage and help nonfilers get back into compliance through outreach and assistance (as opposed to enforcement). The Taxpayer Service function conducted educational workshops and helped taxpayers meet their return filing requirements while Public Affairs had primary responsibility for the communications and outreach strategy. That strategy generated a considerable amount of positive publicity for IRS. As part of the outreach effort, many districts held “nonfiler days” during which IRS volunteers, sometimes accompanied by volunteers from professional associations, such as the American Institute of Certified Public Accountants and the American Bar Association, were available to answer questions and help taxpayers prepare returns. Many IRS district offices also entered into cooperative working arrangements with state tax agencies. As a result of those joint efforts, IRS obtained tax returns, generated publicity and educational materials, identified market segments to be targeted for outreach efforts and enforcement actions, and gained access to state databases to aid in identifying nonfilers. For example, one state did a comparison that identified a large number of individuals and businesses that had filed state sales tax returns but not federal income tax returns. Also as part of the Strategy, in January 1994 IRS began putting a hold on refunds claimed by some individuals who had a prior year’s return in TDI status. The hold applied to returns involving refund claims above a certain amount filed by persons who were not in bankruptcy or under criminal investigation. IRS instructed the taxpayer by letter to file the delinquent return(s) or explain why there was no filing requirement. IRS’ letter also said that if it did not receive either the delinquent return(s) or an acceptable explanation, IRS could prepare a substitute return based on available information. IRS released the refund in cases where there was no filing requirement or the taxpayer established that a significant hardship existed. Otherwise, the refund was applied to the balance due on any delinquent return(s), with any remaining balance sent to the taxpayer. IRS data show that the refund hold program in 1994 resulted in the receipt of about 106,000 delinquent returns and the collection of about $16 million with those returns. IRS expanded the program in 1995 to include any situation where a refund return for more than a certain amount was filed for tax year 1994 and a prior year’s return was more than 1 year overdue, even if the overdue return was not in TDI status. According to IRS data, as of May 1995 IRS had secured about 24,000 returns and collected about $1.8 million in revenue with those returns. According to IRS, the Nonfiler Strategy was generally a success. In reaching that conclusion, it pointed to several aspects of the Strategy, some of which were discussed in the preceding section. Among other things, IRS cited (1) a decrease in the nonfiler inventory, (2) creation of the refund hold program, (3) elimination of unproductive cases that allowed IRS to focus its enforcement resources more effectively, (4) elimination of backlogs in the automated SFR inventory, (5) increases in the number of returns secured from and dollars assessed against individual nonfilers during the 2 years of the Strategy (fiscal years 1993 and 1994) compared with the year before the Strategy (fiscal year 1992), and (6) a closer working relationship between IRS and outside stakeholders and professional associations. We assessed the results of the Strategy by looking at the key performance indicators tracked by IRS during the Strategy. We concentrated on indicators that were identified by the Commissioner in her October 1993 testimony—total number of nonfiler returns secured, number of returns filed by unknown nonfilers, and the dollar amount assessed and collected as a result of these filings. For those indicators, we compared data for 1993 and 1994 with comparable data for the year preceding the Strategy—1992 (we could not go back before 1992 because, according to IRS, comparable data were not available). Also, because the basic objective of the Strategy was not only to bring nonfilers into the system but also keep them there, we looked at data on recidivism—the extent to which nonfilers who were brought into compliance during the Strategy became nonfilers again. While informative, the above analyses were insufficient for us to determine whether the Nonfiler Strategy was a success. We were unable to assess success because IRS (1) did not have specific goals for any of the measures discussed in the preceding paragraph, such as the number of returns it expected to secure or an acceptable rate of recidivism; and (2) did not compile data on the overall cost of the Strategy. IRS’ Strategy emphasized bringing individual nonfilers into compliance, and the number of returns secured from individual nonfilers increased steadily during the 2-year period over the number secured in fiscal year 1992. However, IRS also tracked the results of its Strategy on business nonfilers, and the number of returns secured from business nonfilers decreased (see table 2.1). IRS had intended that the redeployment of Examination staff to work nonfiler cases would free Collection staff in district offices to concentrate on collecting delinquent taxes and working business nonfiler cases. However, IRS’ statistics show declining results in both of those areas. The number of returns secured from business nonfilers declined, as noted earlier. IRS said that this decline could be attributable to an increase in timely filings. Another contributing factor could be the fact that according to IRS data, the percent of time that Collection staff in district offices spent on nonfiler work dropped from 6.3 percent in fiscal year 1992 to 4.9 percent in fiscal year 1993 and 4.2 percent in fiscal year 1994. Whatever the reason for the decrease in returns secured from business nonfilers, the fact remains that during the Nonfiler Strategy and despite the use of thousands of Examination staff to help work cases, the number of returns secured from nonfilers in total was less than the number secured the year before the Strategy was implemented. In addition, district office collections of delinquent taxes decreased almost 9 percent—from about $7.9 billion in fiscal year 1992 to about $7.2 billion in fiscal year 1994. In constant 1994 dollars, the decline in collections was about 13 percent—from about $8.2 billion in fiscal year 1992 to about $7.2 billion in fiscal year 1994. Table 2.2 shows how many of the returns secured during the Nonfiler Strategy came from unknown nonfilers. Compared with 1992, the average number of returns secured from unknown business nonfilers increased 6.5 percent during the Strategy while the average number of returns secured from unknown individual nonfilers decreased slightly. IRS officials responsible for the Nonfiler Strategy said that IRS’ objective was to bring nonfilers into compliance rather than to generate revenue. Accordingly, collection of additional revenues was not a specific goal of the Strategy. Nevertheless, IRS’ key performance indicators for the Nonfiler Strategy included (1) dollars assessed and (2) dollars collected at the time the return was secured. As shown in table 2.3, if constant 1994 dollars are used, (1) net assessments decreased from fiscal year 1992 to fiscal year 1993 and then increased in fiscal year 1994; and (2) fewer dollars were collected with the return, in absolute numbers and as a percent of net assessments, in 1993 and 1994 than in 1992. The “dollars collected with return” indicator does not reflect the total amount eventually collected from the nonfilers; only the amount collected at the time the return was secured. Additional amounts may have been collected later through installment agreements, but IRS did not track that information. In an internal briefing document prepared for the Commissioner in advance of her October 1993 testimony before the Oversight Subcommittee of the House Committee on Ways and Means, IRS stated that the Nonfiler Strategy would be a success “if the taxpayers who return to the system remain in compliance and we are able to fully pursue compliance from those who don’t.” IRS has since found, and our sample cases corroborated, that many of the people brought into compliance during the Strategy had apparently become nonfilers again. IRS matched computer files to determine whether nonfilers brought into the system in fiscal year 1993 filed tax year 1993 returns in 1994. According to IRS, its match showed that 38 percent had not filed by August 1995—16 months after tax year 1993 returns were due. IRS had no data to show how this rate of recidivism compared with other years and no specific rate-of-recidivism goal for the Nonfiler Strategy. Thus, we had no basis for determining whether a rate of 38 percent was acceptable. Our review of a sample of cases closed by Examination also showed a large rate of recidivism. Of the 60 individuals involved in the sample cases closed in 1993, 29 (48 percent) did not file in 1994. Of those 29, 19 also had not filed in 1995 (as of May 1995), and 10 had extensions to file that had not yet expired. Similarly, of the 60 individuals involved in the sample cases closed in 1994, 31 (52 percent) had not filed in 1995 (as of May 1995); another 12 had extensions to file that had not expired. IRS did not have measurable goals for most aspects of the Nonfiler Strategy nor comprehensive cost data against which to compare its results. Measurable program goals and reliable data on costs are important if management is to effectively assess its efforts and make informed decisions about future efforts. Although IRS’ basic objective in implementing the Strategy was to bring nonfilers into the system and keep them there, it had no goals for such things as the number of nonfilers it expected to bring into compliance or the percentage of nonfilers it expected to remain compliant in future years. The only measurable goal associated with the Nonfiler Strategy was one that called for reducing the number of TDI cases to 1.5 million cases by the end of fiscal year 1994. The absence of specific goals makes it difficult for IRS officials responsible for carrying out the Strategy to know exactly what was expected of them and to measure the Strategy’s success. Some Examination personnel in the four district offices we visited said that their objective was to redirect a certain amount of staff years to the effort and that they believed the Strategy was successful because they did so. However, an input measure, such as staff years, is less likely to produce a desired outcome than an output or outcome measure, such as the number of nonfilers brought into compliance. IRS did not track the overall cost of the Nonfiler Strategy. Some cost-related data, such as the number of Examination and Collection staff years spent on the Nonfiler Strategy, were available, but (1) data on other costs, such as those incurred by other IRS functions like Taxpayer Service and Public Affairs, were not available; and (2) those data that were available were not compiled in a way that would provide management with information on the Strategy’s overall cost. IRS officials explained that return on investment was not really an important consideration with respect to the Nonfiler Strategy and that IRS never intended to measure the success of the Strategy by cost. As noted earlier, however, one of the goals of the Strategy as described by the Commissioner in her October 1993 testimony was to “improve the way we direct our enforcement resources in working nonfiler cases . . . to achieve the highest return on our resource investment .” Comprehensive cost data are also important if management is to make informed decisions on the nature and extent of future nonfiler efforts. IRS initiated its Nonfiler Strategy to counteract a growing nonfiler problem, and it took many positive steps to deal with that problem. Its outreach effort was commendable as was its recognition that this was an agency problem that required crossfunctional attention. Although IRS considers the Strategy a success, we were not able to reach that same conclusion on the basis of a review of available IRS data. Also, IRS’ assessment of the Strategy was limited by the absence of measurable goals and comprehensive cost data against which to compare results. To better assess the results of future nonfiler efforts, if any, and provide a better foundation for deciding about subsequent efforts, we recommend that the Commissioner of Internal Revenue (1) establish measurable goals and (2) develop comprehensive data on program costs. We requested comments on a draft of this report from the Commissioner of Internal Revenue or her designee. On December 4, 1995, we met with several IRS officials, including the National Director, Service Center Compliance; the National Director, Compliance Specialization; the Acting Director of the Office of Return Delinquency; and the Acting Director for Special Compliance Programs. They provided us with oral comments, which the National Director, Service Center Compliance, reiterated and expanded on in memoranda dated December 11, 1995, and February 12, 1996. IRS officials took strong exception to the “extremely negative tone” of our draft report. They said that the draft focused almost exclusively on criticisms of the Strategy without fully acknowledging its accomplishments and that, as a result, an uninformed reader would likely judge the Strategy to have been a failure when, in IRS’ view, it was generally a success. In response to those comments, we revised chapter 2 of the report to give more prominence to the positive aspects of the Strategy and to recognize IRS’ position on the Strategy’s success. We reiterate, however, that although IRS is confident that the Strategy was a success, we could not reach the same conclusion given the statistical data available and the absence of other data. IRS acknowledged that it had only one goal for which a specific target was set, the TDI goal, but pointed out that it did have several key performance indicators (such as the number of returns secured and the net dollars assessed) that were designed to show positive or negative trends in results. We agree that it is useful to track trends, but such an exercise is more meaningful if there are goals against which to compare those trends. For example, speaking hypothetically, a 5-percent increase in the number of returns secured might look good on its face but would not look as good if the goal were a 25-percent increase. IRS said that experience and statistical information obtained during the 2 years of the Strategy will permit better planning and goal-setting for any future endeavor. As for cost data—IRS said that it never intended to measure the success of the Strategy by cost and that it is debatable whether all of the goals of the Strategy are amenable to accurate cost/benefit analysis. We are not suggesting that cost should be the sole measure of success, but we think it should be part of any overall assessment. Our draft report also included a recommendation that IRS reconcile conflicting data on the results of the Strategy. However, as discussed in chapter l, IRS subsequently told us that it had revised some data in the Commissioner’s Nonfiler Report. Because those revisions resolved the data inconsistencies referenced in our draft, we dropped that proposed recommendation. Our review of the Nonfiler Strategy identified several areas where we think opportunities exist for IRS to enhance future efforts directed at nonfilers. Those areas include (1) the length of time that expires from the time a return becomes delinquent until IRS first attempts to make telephone contact with the nonfiler, (2) the use of higher graded staff to work cases or do tasks that might be effectively done by lower graded staff, and (3) the absence of special procedures for dealing with recidivists—nonfilers who are brought into compliance and then become nonfilers again. IRS has taken some action in two of these areas. It shortened the time that elapses before a first notice is sent to persons who have been identified as potential nonfilers. However, IRS’ procedures still call for sending several notices to a potential nonfiler before IRS attempts to make telephone contact. IRS also developed special procedures for dealing with recidivists. Those procedures call for, among other things, eliminating some notices but say nothing about revising the language of the remaining notices. IRS officials have stated that the faster they can act to obtain nonfiled returns and related taxes, the more likely that the action will be successful. However, as described in chapter 1, IRS’ process for identifying and investigating nonfilers is a lengthy one. To identify nonfilers, IRS computer-matches data on information returns with data on income tax returns. In the past, this match was usually not done until December—after IRS had finished processing information returns and those income tax returns that were filed late because of extensions. IRS staff must then review the results of the match to determine what action to take. Only after that review is the nonfiler sent a notice. For example, individuals who did not file tax returns in 1993 would not have received a notice until a year later—April 1994. Subsequent notices would have been issued about 6 to 8 weeks later, with the last notice going out in late August 1994. If the case was still unresolved and met the criteria for referral to ACS, it would not have gone to an ACS site for telephone contact until October 1994—1-1/2 years after the return was due. Those cases unresolved by ACS and meeting certain criteria would then be assigned to a revenue officer who might attempt to visit the taxpayer. The whole process may take years, and, as noted earlier, IRS ends up dropping millions of nonfilers from its inventory—more than 5 million in 1994—whose returns have been in inventory for several years. IRS has a project directed at reducing the time it takes to match data on information returns with data on income tax returns and thus shortening the time before the first notice is issued by several months. As a result of that project, according to an IRS National Office official responsible for managing the Nonfiler Strategy, IRS plans to move up first contact with certain nonfilers to the November after the tax return is due. More significant changes, according to IRS, depend on successful implementation of IRS’ multibillion-dollar systems modernization effort, known as Tax Systems Modernization. “According to private and state collectors, early telephone contact is cost-effective and allows the collector to determine why payment has not been made, establish future payment schedules, and update information on the debtor’s status. Collectors can also discuss with the debtor possible adverse actions that could be taken if payment is not received.” In the same report, we recommended, among other things, that IRS restructure its collection organization to support earlier telephone contact with delinquent taxpayers. Although that quote and recommendation relate to the collection of delinquent taxes, they would seem equally appropriate to the collection of delinquent returns (and any delinquent taxes associated with those returns). In January 1995, IRS implemented an Early Intervention Project nationwide. Although the project focuses on the collection of delinquent taxes from persons and businesses that have filed returns, its goal (shortening the notice process and contacting the taxpayer by telephone sooner) is also relevant to delinquent returns. We were told that the project was not extended to nonfilers because sufficient staff would not have been available to handle the resulting workload. In a similar vein, an IRS business process reengineering team reviewed the collection process and made several recommendations, some of which were directed at reducing the time taken to resolve nonfiler cases by eliminating some notices and moving certain cases more quickly to a call site for attempted telephone contact with the taxpayer. As of July 1995, those recommendations were under consideration by IRS management. Nonfiler cases that cannot be resolved by ACS and that meet certain criteria are referred for investigation by field personnel—revenue officers in IRS’ Collection function and, during the Nonfiler Strategy, revenue agents and tax auditors in IRS’ Examination function. In 1993 and 1994, IRS’ Examination function had about 18,000 revenue agents and tax auditors. Over that 2-year period, Examination redirected about 4,000 staff years to work nonfiler cases. Of the 140 cases we reviewed that had been closed by Examination in 4 IRS district offices, 92 (66 percent) were worked by GS-11 revenue agents. Of the remaining cases, 40 (29 percent) were worked by staff (generally tax auditors) below grade GS-11, 4 (3 percent) were worked by revenue agents above GS-11, and 4 (3 percent) were worked by staff whose grades could not be determined. Those data are not projectable. However, national data from Examination’s management information system showing the hours charged to nonfiler cases closed in fiscal years 1993 and 1994 also showed that GS-11 revenue agents accounted for most of the time spent by Examination on nonfiler work. Specifically, of the approximately 3.6 million hours charged by revenue agents and tax auditors on those cases, about 2.4 million hours (66 percent) were charged by GS-11 revenue agents. Another 491,000 hours (14 percent) were charged by revenue agents above GS-11, and 155,000 hours (4 percent) were charged by agents in grades 5 through 9. The remaining hours were charged by tax auditors. Generally, higher graded revenue agents audit more complex tax returns. For example, when not working nonfiler cases, GS-11 and above revenue agents generally audit complex returns filed by individuals and returns filed by corporations. Although it helped IRS to reduce its nonfiler inventory and secure delinquent returns, the use of GS-11 and above Examination staff on nonfiler cases might have also contributed to an increase in IRS’ audit rate for individual returns and a decline in the audit rate for nonindividual returns. For example, the audit rate for individual returns went from 0.92 percent in fiscal year 1993 to 1.08 percent in fiscal year 1994, an increase that IRS has attributed to the Nonfiler Strategy. At the same time, however, the audit rate for corporate returns decreased from 3.05 percent to 2.31 percent. Although other factors may have contributed to that decrease, several of the revenue agents and Examination officials we interviewed in four district offices told us that if the GS-11 and above agents had not been doing nonfiler work, they would have been doing corporate audits. Examination officials in one district, for example, told us that because of the nonfiler work, the number of corporate audits done in that district decreased by about 10 percent. Although Examination officials, revenue agents, and tax auditors we interviewed in the four district offices we visited had several positive things to say about the Nonfiler Strategy and Examination’s role therein, a common theme expressed by many of them was that much of the nonfiler case work done by revenue agents and tax auditors could have been done by lower graded staff. In one district office, for example, that view was expressed by the Chief and Assistant Chief of Examination as well as the two Branch Chiefs, one Group Manager, three revenue agents, and three tax auditors we interviewed. Our review of case files in the four districts led to a similar conclusion—that the nonfiler case work in those districts involved tasks that could be done by lower graded staff. Our case file reviews indicated that with some exceptions, the work done on those cases was not so complex that it required the expertise of higher graded staff. That perception was confirmed by several of the agents and auditors we spoke with in the four district offices who said that nonfiler cases were easier to work than audit cases and were not technically challenging. One reason why revenue agents and tax auditors might not have found nonfiler work technically challenging is that audits of returns secured from nonfilers during the Nonfiler Strategy were different from normal audits. As explained in an August 1992 document on the Nonfiler Strategy signed by the then Acting Commissioner, the nonfiler audit process was streamlined so that cases could be worked in a minimal amount of time. As noted in the document, audits of nonfiler returns were to be limited in scope, with the rule of thumb being “if the return makes sense, accept it.” One presumed advantage of using revenue agents on nonfiler cases is that they are accustomed to making field visits to contact taxpayers. However, in only 15 percent of the cases we reviewed was there any evidence of a field visit, and an IRS analysis of 1,000 cases completed by Examination in one district office showed that a field visit was made in only 23 cases (2.3 percent). It is not our intent to second-guess IRS’ staffing decisions for the Nonfiler Strategy. We do not know what options were available to IRS when it implemented the Strategy and, even if we did, second-guessing would serve no useful purpose. Our intent, rather, is to suggest, on the basis of our case reviews and our interviews of persons involved in doing those cases, that different staffing patterns might be appropriate for future nonfiler efforts, if any. Those patterns might involve (1) using lower graded revenue agents instead of GS-11s, (2) using more tax auditors or service center tax examiners instead of revenue agents, and/or (3) making greater use of paraprofessionals or administrative staff. The kinds of tasks that could be done by paraprofessionals or administrative staff, in our opinion, include such things as locating nonfilers, contacting them by telephone or letter, scheduling and rescheduling appointments, and preparing SFRs. In many of the cases we reviewed, for example, it was our perception that Examination’s success in securing delinquent returns was due, in large part, to the agents’ and auditors’ persistence in contacting nonfilers by telephone and in following up with nonfilers when they missed an appointment or when returns or information they had promised to mail were not received. Because it did not appear that the person making the phone calls needed any special auditing skills, it seemed that IRS could achieve the same result by using paraprofessionals or other lower graded staff, leaving higher graded staff more time to audit. One of the district offices we visited had some experience using paraprofessionals. The Detroit District Office, in June 1994, trained 15 Accounting Aides, primarily grade 5, to help prepare reports and case files for nonfiler cases. The Detroit office reported such advantages as enhanced productivity, reduced nonfiler workload, and more time for revenue agents and tax auditors to do other duties. The average annual base salary of a GS-5 in 1995 (figured at step 6, the middle of the pay scale) was $21,827, compared with $33,070 for a GS-9 and $40,010 for a GS-11. Although our work focused on the use of Examination staff during the Nonfiler Strategy, it seems logical that our observations may also be pertinent to the use of Collection staff. Revenue officers range in grade between GS-5 and GS-12, any of whom, according to Collection officials, might be asked to perform nonfiler investigations. IRS has three broad business objectives, the first of which is to increase voluntary compliance. With that in mind, a key indicator of the success of IRS’ nonfiler efforts, in our opinion, is the extent to which nonfilers brought into compliance remain compliant. As noted in chapter 2, our analysis and a broader analysis done by IRS showed that many of the nonfilers brought into compliance in 1993 did not file returns in 1994. IRS spent resources getting these nonfilers to comply only to have many stop filing 1 year later. When they are identified as nonfilers again, IRS must spend additional resources and begin the enforcement cycle again. IRS developed a strategy for dealing with these repeat nonfilers, whom we refer to as recidivists, that was approved by the Deputy Commissioner in July 1995. The strategy calls for such things as expediting cases against certain nonfilers by eliminating some notices, developing a separate scoring system for recidivists, and referring some cases for possible criminal investigation. IRS officials told us in November 1995 that those procedures were being reconsidered since the extent of recidivism (38 percent) was less than what they thought at the time the procedures were prepared. At that time, IRS’ initial analysis of recidivism had indicated a rate of more than 50 percent. While the proposed strategy for dealing with recidivists calls for eliminating some notices, there is no mention of any intent to revise the language of the notices that will be sent. If the intent is to reduce the number of notices from four to two, for example, by simply eliminating the second and third notices and keeping the first and fourth, then the language in the remaining two notices might have to be revised to reflect the truncated process. Because a notice’s content and format may affect the recipient’s ability and willingness to comply, it is important that notices be clear, informative, and comprehensive. The first notice IRS now sends nonfilers, for example, is very low key. It notes that IRS has yet to receive a return and asks the person or business to either (1) file a return, (2) notify IRS if a return has already been filed, or (3) explain why the person or business has no filing requirement. Subsequent notices are increasingly more urgent in tone. If IRS intends to reduce the number of notices it sends to recidivists, the first notice may have to convey a greater sense of urgency than is now the case while still giving the apparent recidivists the opportunity to explain why they have no filing requirement. An IRS official responsible for the nonfiler program acknowledged that if IRS decides to send fewer notices to recidivists, it may need to revise the wording of those notices. It is important that IRS make that determination in a timely manner because of the lengthy process involved in approving and making the computer programming changes needed to revise a notice. We believe that opportunities exist for IRS to further enhance its efforts to deal with nonfilers. We believe that the quicker IRS can make telephone contact with a nonfiler, the better its chances of making that nonfiler compliant. IRS is moving in that direction by speeding up issuance of the first notice to potential nonfilers. We believe that IRS could move even further in that direction if, as recommended by an internal study group, it reduced the number of notices sent to nonfilers and moved nonfiler cases more quickly to a telephone call site—similar to its Early Intervention Project for delinquent taxes. IRS should consider extending that project to nonfilers, at least to the extent deemed feasible given the amount of staff available to work on the project. In that regard, IRS might want to consider testing early intervention for nonfilers to see what impact, if any, it has on compliance. Related to our views on telephone contact is our belief that IRS could use its enforcement resources more efficiently in dealing with nonfilers. We believe that it is to IRS’ benefit to limit as much as possible the extent to which higher graded enforcement staff are doing work that could be done effectively by lower graded enforcement staff or even, in some instances, by paraprofessionals or administrative staff. As we discussed earlier, for example, successful closure of many of the cases we reviewed seemed to be due, in no small part, to the revenue agent’s persistence in calling nonfilers. We see no reason why lower graded staff could not be just as persistent. Keeping nonfilers compliant once they have been brought into compliance is critical if IRS is to increase voluntary compliance and maintain control over its nonfiler workload. IRS’ recently approved strategy for dealing with recidivism, if implemented, would be a big step in the right direction. Part of that strategy calls for reducing the number of notices sent to recidivists. There is no mention, however, of any intent to review the language of the remaining notices to ensure that it is still appropriate. To enhance any future IRS efforts directed at nonfiling, we recommend that the Commissioner of Internal Revenue do the following: Revise procedures to provide for more timely telephone contact with nonfilers in line with the reengineering team’s recommendations. In that regard, IRS should consider whether the Early Intervention Project, which includes, among other things, earlier telephone contact with taxpayers whose taxes are delinquent, should be extended to nonfilers. Consider the feasibility and appropriateness of assigning more nonfiler work to lower graded professional staff, paraprofessionals, and administrative staff. In considering its options, IRS might want to solicit input from district managers and staff who worked on the Nonfiler Strategy. If IRS decides to send fewer notices to recidivists, it should determine whether the language of the remaining notices should be revised. We requested comments on a draft of this report from the Commissioner of Internal Revenue or her designee. On December 4, 1995, we met with several IRS officials, including the National Director, Service Center Compliance; the National Director, Compliance Specialization; the Acting Director of the Office of Return Delinquency; and the Acting Director for Special Compliance Programs. They provided us with oral comments, which the National Director, Service Center Compliance, reiterated and expanded on in memoranda dated December 11, 1995, and February 12, 1996. In commenting on our draft, IRS said that it agreed with only one of our three recommendations—the one dealing with the language of notices sent to recidivists. IRS said that our proposed recommendation on timely contact with nonfilers was unnecessary because IRS has been working to accelerate the processing of information returns for several years with the intent of making earlier contacts with nonfilers and filers who have underreported their income. We have revised the body of our report to more clearly acknowledge those efforts. However, our recommendation was intended to go beyond the initial identification of and contact with nonfilers. Our intent was to encourage IRS to make more timely telephone contact with nonfilers. Although the accelerated processing of information returns should speed up the entire process and lead to quicker telephone contact, we believe that there are other steps IRS could take, similar to its Early Intervention project for delinquent taxes, to help achieve that end. In that regard, we think our recommendation is necessary, and we have reworded it to clarify the focus on earlier telephone contact. In response to our revised recommendation, IRS said that it (1) has established the framework for expanding the Early Intervention Project to business nonfilers, if sufficient resources become available; and (2) does not anticipate having sufficient staffing to expand the Project to individual nonfilers. IRS said that if circumstances change in the future, it may find it feasible to consider including individual nonfilers in the Project. Although we acknowledge the resource limitations, we wonder whether it might be feasible for IRS to revise the Early Intervention Project to include a mix of delinquent tax and nonfiler cases, even if that means having to exclude some delinquent tax cases, rather than limiting the Project to only delinquent tax cases. That might enable IRS to assess the relative benefits of early intervention on both types of cases. IRS took most exception to our proposed recommendation on assigning nonfiler case work. IRS said that the recommendation was unnecessary and reflected a basic misunderstanding of the purpose of the Nonfiler Strategy. IRS said that the decision to assign nonfiler cases to Examination employees, even those capable of working higher graded, more productive cases, was (1) a management decision based on the view that maintaining the viability of the nonfiler program outweighed possible short-term productivity losses in other areas and (2) a short-term response to stem the growth of the nonfiler inventory that was never intended as an ongoing work assignment practice. IRS also said that a review of the special nonfiler auditing standards makes it clear that techniques needed under the nonfiler initiative required more technical expertise than could be provided by paraprofessionals. As noted earlier, it was not our intent to second-guess IRS’ staffing decisions for the Nonfiler Strategy but rather to suggest that IRS consider other options in staffing any future nonfiler initiatives. Our work at four district offices indicated that other options might be more efficient, depending on the availability of staff. In that regard, our review of case files in four district offices indicated that the audit work on nonfiler cases in those districts was often less involved than suggested by the auditing standards referred to by IRS and thus often did not require the expertise of GS-11 revenue agents. That perception was supported by many of the district office Examination staff and managers we interviewed who said that nonfiler work could be done by lower graded staff. Those lower graded staff could be revenue agents below GS-11 or tax auditors or, for some tasks, paraprofessionals or administrative staff. We revised the report and reworded the recommendation to avoid the impression that we are advocating that all nonfiler work be done by paraprofessionals. IRS also questioned how we could draw conclusions about staffing when our review was limited to four districts and our results are not projectable. We believe the scope of our work was sufficient to raise questions about the level of staffing needed to do the kind of nonfiler case work that was done during the Nonfiler Strategy. We agree, however, that it was not sufficient to support a specific recommendation that IRS adopt different staffing patterns for any future nonfiler effort (which is how we had worded the recommendation in our draft report). Thus, we revised our recommendation to (1) give IRS more flexibility in deciding how, if at all, the staffing of future nonfiler efforts should differ; and (2) suggest that IRS, in considering its options, solicit input from managers and staff in district offices that we did not visit. After we revised our recommendation, IRS advised us that it will, in the future, “consider using appropriately graded employees, if available.” | GAO reviewed the results of the Internal Revenue Service's (IRS) Nonfiler Strategy and opportunities to improve any similar future efforts. GAO found that: (1) IRS actions to achieve its Nonfiler Strategy's goals included deploying examination staff to work on nonfiler cases, increasing other IRS functions' emphasis on nonfiler activities, eliminating old cases from inventory, establishing cooperative relationships with states and the private sector, and implementing a refund hold program; (2) IRS believes that its Nonfiler Strategy was generally a success, since it reduced its nonfiler inventory, eliminated unproductive cases, increased the number of returns from and dollars assessed against individual nonfilers, and created closer working relationships with outside stakeholders and professional associations; (3) although IRS reduced its nonfiler inventory, there are not enough data to determine voluntary compliance improvement or the program's cost-effectiveness; (4) returns from business nonfilers and collection of delinquent taxes decreased during the two years the strategy was in effect; (5) IRS made measuring the strategy's success more difficult by failing to establish measurable goals; (6) at least 38 percent of nonfilers who eventually filed a return became recidivists in the following year; (7) future IRS nonfiler efforts could be improved by shortening the time before first notices and telephone contacts are made, using lower-grade staff to pursue nonfiler cases, and revising notices sent to recidivists to increase their urgency; and (8) IRS has reduced the time before sending first notices and developed special recidivist procedures, but it continues to send several notices before making telephone contact. |
Rocco Commisso darts around his office, gnawing a stick of nicotine gum and playing show-and-tell. “Look at the rates,” he says, holding up a plaque celebrating a $2.4 billion financing round from 2001, his cable firm’s largest ever. Up next are some personal keepsakes: a picture with fellow billionaire Charles Dolan, a golden telescope to take in views of the Catskill Mountains, a signed photo of Pelé, the Brazilian footballer. Every few minutes Commisso calls out to his assistant as if this tour is taking place against his will. “Jen, this guy wants to see all of my personal stuff!” he yells. Then he scans the room for another prize to trot out.
Forgive him the braggadocio. Commisso, 68, has risen farther than nearly anyone in America. The son of a penniless carpenter, he immigrated from Italy at age 12 unable to speak a word of English. A quirky talent for playing the accordion got him into Catholic school, the first step on a prosperous path that included stops at Columbia University and the Royal Bank of Canada before he founded his cable company, Mediacom, in 1995.
Mediacom focused on buying cable assets in rural areas, where prices were low and competition scant. The firm has increased its top line every year since its founding; revenue neared $1.9 billion in 2017. Commisso owns the company outright, and its value constitutes virtually his entire fortune. Thanks to a white-hot mergers-and-acquisitions market, the business is worth an estimated $4.3 billion—and Commisso, who makes his debut on Forbes ‘ Billionaires list this year, seems ready to cash out.
READ MORE: Forbes Billionaires: Meet The Richest People On The Planet
He founded Mediacom at a time of industry upheaval, when new federal regulations, which both restricted prices and increased competition, were scaring small cable operators into selling. As others jumped ship, he leveraged about $3 million—most of his small fortune—to start buying the cheapest cable lines available, concentrating on secondary markets in states like Iowa and Georgia. Even his offices are far off the beaten path: Mediacom HQ is in Chester, New York, a verdant speck of 12,000 people, 25 minutes from West Point.
Commisso is as much a financier as he is a cable guy—he has an M.B.A. from Columbia and spent nine years as CFO of Cablevision Industries. Mediacom’s rapid growth was enabled by arbitraging differing perceptions of cable assets in the debt and equity markets. Banks, reassured by the sector’s predictable cash flows, were willing to lend at reasonable rates even as investors, spooked by regulation, were willing to sell cheaply. In his first five years in business, Commisso made more than 20 acquisitions. Mediacom at one point accumulated $3 billion in debt, over eight times operating cash flow.
Commisso admits he borrowed to the precipice of insolvency, but he stayed afloat by keeping an eagle eye on costs and by meticulously managing his debt. “You know, we watch the store,” he says.
But now the core business is changing. The broadband generation is increasingly cutting the cord and relying on online services like Hulu, Netflix and Amazon Prime Video to entertain themselves. Over the past ten years, the number of subscribers to Mediacom’s television offerings has plummeted 38% to 821,000. This is a faster rate of decline than the 3% the industry as a whole has suffered.
Mediacom’s woes in television are fueled, in part, by its success in broadband. Commisso has aggressively invested in tech upgrades; customers in places like Cecil, Georgia, enjoy Internet speeds on par with those in Seattle and San Francisco. Mediacom’s broadband subscriber base has increased 84% over the last decade, far outpacing the industry average of 54%—and many customers are using their lightning-fast connections to watch TV and movies online.
Hence the temptation for Commisso to cash out soon. In his mind, there is little left to prove. “In the history of Italian immigration, in the business world, I don’t think there’s another one like me in the last 100 years,” he says.
ROCCO COMMISSO GREW UP in Calabria, Italy, as the country reeled from its defeat in World War II. “We were losers,” he says. “Just like the Americans coming back from Vietnam, we came back as losers.” Commisso’s father, Giuseppe, served in North Africa during the war and was captured in 1942 by the British. He spent the remainder of the war in a POW camp in Kenya. When he returned home, work was scarce.
In 1956, Giuseppe sailed to the United States to start anew. “What a great country, America,” Rocco says. “Prisoners of war got preferential treatment to come here.” Rocco, meanwhile, stayed back in Italy with his mother and two sisters. In 1962, when he was 12, they joined his older brother and father in Baden, Pennsylvania, 10 miles from Joe Namath’s hometown. The family moved to the Bronx the following year.
From the outset, New York City brought good luck. Just after Commisso arrived, he spotted an ad for a talent competition. He entered as a solo accordion act and won, which led to a gig playing intermission music at the Wakefield Theatre on East 233rd Street in the Bronx. More important, it drew the attention of the Wakefield’s manager, who wrote a letter to a local Catholic school, Mount Saint Michael Academy, and got Commisso admitted without an entrance exam, which he had arrived too late to take. “I ended up being the only kid that ever got in without taking the test,” he says.
Commisso is now one of the largest benefactors of Mount Saint Michael. But back then he could barely afford to pay his own way. As a teenager he worked long hours at his brother’s diner to come up with the $300 annual tuition.
When college application time rolled around, Commisso again relied on a favor. His gym teacher called the soccer coach at Columbia University and told him about a promising student with good grades. Within a month, Commisso, who hadn’t even played soccer in high school, was accepted to the prestigious college with a full scholarship.
A natural athlete, Commisso had shown a knack for the sport in Italy under starkly different conditions: on cement, with a ball made of rags. That training somehow translated to the Ivy League turf. By his senior year he was co-captain of the varsity squad and was invited to try out for the 1972 Olympic team. The trials went terribly. Commisso arrived out of shape, with the lung strength of a smoker; the other players ran laps around him. Still, his legacy remains strong at Columbia, which named its soccer stadium for him in 2013, in recognition of the millions of dollars he has donated to the university.
After graduating in 1971, Commisso found work at a Pfizer plant in Brooklyn, a job he kept even after beginning an M.B.A. program at Columbia in 1974. Each day he rose at 7 a.m., attended class, then headed to the plant. At midnight, when his shift ended, he spent two hours on the subway getting home to the Bronx.
Commisso graduated with one of Columbia’s top honors, the Business School Service Award, and a plan to go into investment banking. But no offers came in. “There was discrimination,” he says. “I’ll never forget the guy from Kuhn Loeb telling me, ‘Rocco, you know what your problem is? You’re neither Jewish nor Irish. The Italians haven’t arrived on Wall Street.'”
So Commisso took a commercial banking job at Chase Manhattan Bank (now part of JPMorgan Chase). He later moved on to the Royal Bank of Canada, where he led lending to media and communications businesses. “I got attracted in banking to these types of guys and ladies,” he says. “We used to call them ‘the cowboys.’ The cable cowboys. Because they dressed differently than everybody, they talked differently than everybody—and they were entrepreneurs.”
In 1986 Commisso left banking to join one such cowboy—Alan Gerry, the founder of Cablevision—in Liberty, New York, a 50-minute drive from Mediacom’s headquarters. Commisso spent almost a decade as Gerry’s finance chief. “He’s one of the brightest guys I’ve ever known,” says Gerry, now 89 years old.
After the new regulations hit the industry in 1992, Gerry opted out, selling Cablevision to Time Warner for more than $3 billion in 1996. Commisso hated that decision. “This is a phenomenal time to buy as opposed to sell,” he recalls thinking. “And to prove it, I’m going to start my own company.”
COMMISSO’S OPTIMISM WAS NOT shared by his peers. That disparity only widened in 1996 when an additional batch of regulations brought new competition from telecom firms, like SBC Communications and Ameritech, that had previously been barred from the cable television space. “The fear was that the phone companies would enter the cable business and, with their stronger balance sheets and brand names, crush the cable companies,” says Craig Moffett, co-founder of the equity research firm MoffettNathanson.
That anxiety made it possible for Commisso to buy cable assets on the cheap, and he went all in. He bought his first network of cable lines, in rural Ridgecrest, California, for $18.8 million in 1996, using a loan from his old friends at Chase Manhattan.
The risk was extreme, and to outsiders Commisso might have seemed a loose cannon. He can be brash and domineering, his Calabrian accent amplifying heated bursts of profanity. But the banks trusted his background in finance.
After Ridgecrest, Commisso went on an acquisition spree, borrowing millions—then hundreds of millions—to buy up cable systems in Arizona, Delaware, Florida, Missouri, North Carolina, Mississippi and Alabama. He closed nine purchases in his first three years. “[I] was viewed as just a crazy buyer who’d buy anything that was for sale,” he says.
Commisso then invested heavily in infrastructure. To date he has spent $2.5 billion upgrading his networks, which has deterred other operators from entering his territory. Historically, Mediacom has instead fought for subscribers against satellite-television firms such as DirecTV. Phone companies, despite the early panic, never posed much of a menace.
By the end of the 1990s, gloomy forecasts for the sector had softened. Commisso seized on that and, with perfect timing, took Mediacom public on Nasdaq at a $2.5 billion valuation in February 2000, just weeks before the dot-com collapse. In all, he raised $380 million to pay down debt, and his Class B shares allowed him to retain majority voting control. “Nobody could kick me out,” he says.
The following July, Mediacom made its largest acquisition ever. After AT&T became strapped for cash, it put some of its cable assets on the market. Commisso snatched up properties in Georgia, Iowa and Missouri for $2.2 billion.
READ MORE: Richard Branson – The Shy Billionaire In Space
By late 2002, company debt had exploded to $3 billion. The banks wouldn’t lend another dime, and Commisso was forced to end his buying binge. “What saved us was not doing the next deal,” he says. “It was a great decision to buy when we did. It was an even better decision to stop when we did.”
Through shrewd balance-sheet management and frequent refinancing, Mediacom never missed a loan payment, allowing it to stay afloat until 2009, when it finally began producing enough cash to start paying down the principal debt.
Still, stockholders were not impressed. Mediacom’s share price fell nearly 80% in the decade following its IPO. By 2010, Commisso decided he’d had enough of the public markets. He moved to buy the company outright.
After tense negotiations and a shareholder lawsuit, he acquired the business in March 2011 for roughly $600 million, a 64% premium. Borrowing against the company’s assets, he became its sole owner.
Again, his timing could not have been better.
SINCE COMMISSO TOOK Mediacom private, the company’s value has skyrocketed sevenfold. The question now is when Commisso will lock in his gains and walk away.
The company is an attractive acquisition prospect for larger firms like Altice, which has scooped up several operators in the last several years, driving up valuations across the industry. Mediacom is the dominant broadband provider in much of its territory, and its new gigabit-speed service is on par with the fastest in the country. “For a large portion of their footprint, they’ve got a clear product advantage over their competitors,” says James Ratcliffe, managing director at Evercore ISI.
Commisso is coy about plans to sell but admits he’s taken multiple meetings with investment bankers in the past year. A man who made his fortune on the basis of good timing, he seems to concede that his work is largely finished. “Unless I’m here on earth just to become the biggest, the biggest, the biggest buffoon, I’m very happy with what we have accomplished,” he says. “I’m not Warren Buffett. I’m very content.” – Written by , ||||| “I thank Allah that I have returned home safely. I thank all my fellow Tanzanians, and everyone around the world for their prayers. I thank the authorities of Tanzania, including the Police Force for working for my safe return.” — Mohammed Dewji (3:15AM, Dar es Salaam) ||||| Image copyright AFP Image caption Financial magazine Forbes says Mohammed Dewji is worth $1.5bn (£980m)
Kidnapped Tanzanian billionaire Mohammed Dewji has been released, 10 days after he was seized by armed men in the city of Dar es Salaam.
"I have returned home safely," he said in a tweet from his company METL Group's account.
The businessman, known locally as Mo, thanked Tanzania's police "and everyone around the world for their prayers".
It is not clear how Mr Dewji, 43, was freed or whether a ransom was paid.
Forbes places Mr Dewji's net worth at around $1.5bn (£980m), which would make him Africa's youngest billionaire.
Mr Dewji was abducted by gunmen at the Colosseum Hotel early on 11 October, as he arrived for a morning workout.
His family had offered a 1bn Tanzania shilling ($440,000; £330,000) reward for information leading to his rescue.
Image copyright EPA Image caption A vehicle with the registration "MO 1" belonging to Mohammed Dewji pictured outside the Colosseum Hotel
Tanzania's environment minister January Makamba, a close friend of the industrialist, tweeted on Saturday morning that he had spoken to Mr Dewji and his father.
He said the kidnappers had abandoned Mr Dewji at a field near the Gymkhana club in Dar es Salam, Tanzania's commercial capital.
The billionaire is reported to be in good health, but with bruises on his hands and legs due to handcuffing.
Mr Dewji served as an MP in Tanzania's ruling party for a decade until 2015.
He is credited with turning his family business from a wholesale and retail enterprise into a pan-African conglomerate.
His company, MeTL, has interests in textile manufacturing, flour milling, beverages and edible oils in at least six African states.
In 2016, the tycoon had promised to donate at least half his fortune to philanthropic causes. ||||| Mohammed Dewji @ moodewji is now back home safely. I have just spoken to him and his father 20 minutes ago. In his voice, he’s the usual Mo. So he is okay. Thank you all for your prayers. God is really great. Going to see him now. ||||| Tanzanian billionaire Mohammed Dewji. Picture: @MeTL_Group
Dar es Salaam/Nairobi - Africa's youngest billionaire, snatched a week ago off the street outside a luxury hotel in Tanzania, has returned back home safely, police said on Saturday. Mohammed Dewji, 43-year-old CEO of the METL Group family conglomerate, was seized as he arrived for a morning workout in Tanzania's commercial capital Dar es Salaam last week. Forbes estimates his net worth as $1.5 billion, making him Africa's 17th richest man and its youngest billionaire.
Lazaro Mambosasa, Dar es Salaam's police commander, told Reuters that Dewji was abandoned by his kidnappers in the city's Gymkhana area at 2:30 am local time.
Dewji had been detained in a house in an area where police were set to search as part of a house-to-house investigation, he said.
Mambosasa added that Dewji was unharmed apart from bruises on his hands and feet where they were tied.
"He told us that they treated him very well and gave him food," he said.
Dewji did not know who his abductors were but believes they were from South Africa, his office told Forbes Africa.
Dewji's family had offered a reward of 1 billion Tanzania shillings (R7,2 million) for information leading to his release, though it was not immediately clear how much the kidnappers had demanded
"I have returned home safely," METL Group quoted him as saying on its Twitter feed, without providing more details about how he was freed or got away from his captors.
The company also quoted him thanking those who had worked for his release, including the police.
The seizure of Dewji, who has also served as member of parliament in the past, had caused consternation in the East African nation as he is one of its most prominent business executives.
METL Group is involved in a diverse range of manufacturing, farming, transport, infrastructure, agroprocessing and telecoms businesses spanning 11 African countries.
Reuters and IOL ||||| (CNN) Tanzanian billionaire Mohammed Dewji, who was seized by gunmen outside a luxury hotel nine days ago, is home safe after his kidnappers freed him, police said.
Unknown gunmen snatched Dewji, 43, on October 11 as he left his early morning workout in the commercial capital of Dar es Salaam, police said.
He was found about 3:15 a.m. local time Saturday in the same city, regional police commissioner Lazaro Mambosasa told reporters. Dewji, who attended the news conference in a white T-shirt and pants, thanked police officers and shook their hands.
Police officials did not provide additional details on his release. It's unclear whether a ransom was paid.
Dewji's disappearance made international headlines, with his family offering a reward of one billion Tanzanian shillings (US $440,000) for information leading to his rescue. The business tycoon has previously served as member of the parliament, and is described as Africa's youngest billionaire.
Read More | Africa's youngest billionaire is back home. Mohammed Dewji, who was seized Oct. 11 by masked gunmen while headed to the gym in the Tanzanian city of Dar es Salaam, has been released, the BBC reports. "I have returned home safely," his company, MeTL Group, quoted the 43-year-old father of three as saying in a Friday night tweet. "I thank the authorities of Tanzania, including the Police Force for working for my safe return." CNN reports he was found early Saturday morning near a Dar es Salaam tennis court, and he appeared at a presser with police, dressed in pants and a white tee. January Makamba, the country's environment minister, says he visited Dewji at his home after his return and that Dewji seemed relatively unharmed, save for marks on his hands and legs where he'd been bound. "I have just spoken to him and his father 20 minutes ago," Makamba tweeted. "In his voice, he's the usual Mo. So he is okay." Dar es Salaam's police chief tells IOL that Dewji told police his kidnappers "treated him very well and gave him food." His office reportedly told Forbes Africa he believed his abductors were from South Africa. It's not clear how he was let go, or whether a ransom was paid, though a source said to be close to Dewji tells Forbes Africa his abductors let him go after getting spooked by all the media hype. (Dewji has promised to donate half of his fortune to charity.) |
ANALYSIS/OPINION:
The area around the former World Trade Center is a sacred space. It is a place where thousands of Americans’ lives were taken by the purveyors of a hostile ideology based on Islam. The Cordoba House, a 13-story mosque and Islamic cultural center planned for a site near Ground Zero, is at best inappropriate, and at worst an attempt to hijack the memory of the Sept. 11, 2001 attacks.
The effort to memorialize 9/11 has seen an overweening and unnecessary deference to Muslims. Most memorials will not mention the fact that the Sept. 11 terrorist attackers were motivated by the faith of Muhammad. The Flight 93 memorial in Shanksville, Penn., featured a “crescent of embrace” motif that was altered after a public outcry over the use of Muslim symbolism to celebrate the deadly consequence of Muslim fanaticism. The memorial space at Ground Zero will name all the victims of the attack but will not make reference to why they died that day.
The accompanying National 9/11 Memorial and Museum will also soft-pedal the events of Sept. 11. According to Daisy Khan, executive director of the American Society for Muslim Advancement (ASMA), it will represent the “voices of American Muslims in particular, and it will honor members of other communities who came together in support and collaboration with the Muslim community on September 11 and its aftermath.” But it is bizarre that the voices of American Muslims would dominate such a memorial, especially since the Muslim community was never in the forefront of denouncing the actions of their coreligionists after the Sept. 11 attacks. To hear Ms. Khan speak, one would think that Muslims were more the victims than the perpetrators of the carnage.
Ms. Khan writes off concerns about Cordoba House to “fear of the unknown.” One of the great unknowns is where funding for the $100 million project is coming from. The building was purchased in July 2009 for $4.85 million in cash by Soho Properties, a real-estate investment firm tied to developer Sharif El-Gamal. One of the investors was the Cordoba Initiative, an organization chaired by Ms. Khan’s husband, Faisal Abdul Rauf. The initiative listed less than $20,000 in assets in 2008 and has received less than $100,000 in contributions since it was founded in 2004. The ASMA has assets of less than $1 million. The principals will not explain how their cash-poor organizations can hope to undertake such a major project, but Ms. Khan claims that, “Cordoba House will be a new entity whose funding sources will be independent from the funding sources of ASMA and Cordoba Initiative.” Odds are the money will come from overseas.
Saudi Arabia and other Muslim-majority countries have made funding mosques an important priority for extending Islam’s reach and influence. Yet the representatives of other faiths are not allowed to build places of worship in areas which Muslims consider sacred, which in some cases includes entire countries. Deputy National Security Adviser for Homeland Security John Brennan recently spoke glowingly of witnessing “how our Saudi partners fulfilled their duty as custodians of the two holy mosques at Mecca and Medina.” That might be true, but don’t get caught worshipping a god other than Allah. According to a 2009 Pew Forum study, Saudi Arabia is rivaled only by Iran as the world’s least tolerant country for religious diversity. It’s illegal to merely possess religious symbols from other faiths in the desert kingdom. Converting to another religion is a capital offense.
The United States should ban any overseas funding for construction of religious sites originating in countries that do not allow religious freedom and end the one-way relationship that allows those promoting Islam an unfair advantage over other faiths. Furthermore, Ms. Khan and Mr. Rauf should come clean about the expected sources of funding for the Cordoba House. It would be ironic and tragic (if not surprising) if the same channels that seek to build the Ground Zero mosque also underwrote the attacks that made it necessary to build a memorial.
The “religion of peace” has some very violent adherents, and they are increasingly active on U.S. soil. It’s a sign of cultural weakness that Americans are afraid to say no to a mosque on the most prominent site of jihadist victory in the United States.
Copyright © 2019 The Washington Times, LLC. Click here for reprint permission. ||||| By Chelsea Schilling
© 2011 WND
Wreckage from plane that hit the twin towers fell on the same building that may serve as an Islamic cultural center.
A new Islamic mosque will open its doors just steps from Ground Zero where Muslim terrorists murdered 2,751 people in the name of Allah on Sept. 11, 2001 – and its leading imam, who conducts sensitivity training sessions for the FBI, has reportedly blamed Christians for starting mass attacks on civilians.
The five-story building at Park Place, just two blocks north of the former World Trade Center site, was the site of a Burlington Coat Factory. But a plane's landing-gear assembly crashed through the roof on the day 19 Muslim terrorists hijacked the airliners and flew them into the Twin Towers in 2001.
Now Muslim worshippers currently occupy the building, and they plan to turn it into a major Islamic cultural center.
"The men and women stand up, raise their hands on either side of their head, murmur 'Allahu akhbar,' bow and kneel again," reports Spiegel Online.
"Only in New York City is this possible," Daisy Khan, executive director of the American Society for Muslim Advancement, or ASMA, told the magazine. Khan is the wife of Imam Feisal Abdul Rauf, founder of ASMA.
They have leased the new prayer space as an overflow building for another mosque, Masjid al-Farah, at 245 West Broadway in TriBeCa, where Rauf is the spiritual leader.
Get "Why We Left Islam" now from the people who published it – WND Books.
The building – vacant since that fateful day when time stood still as millions of Americans grieved the loss of loved ones, friends, family members, co-workers and strangers – was purchased in July by real-estate company Soho Properties, a business run by Muslims. Rauf was an investor in that transaction.
Just down the street, the Museum of Jewish Heritage honors victims of the Holocaust, and St. Peter's Church, New York's oldest Catholic house of worship, is located around the corner.
Rauf has announced his plans to turn the building into a complete Islamic cultural center, with a mosque, a museum, "merchandising options," and room for seminars to reconcile religions, "to counteract the backlash against Muslims in general, " Speigel reports. The project may cost as much as $150 million.
Rauf told the New York Times purchasing the building "where a piece of the wreckage fell sends the opposite statement to what happened on 9/11."
"It was almost obvious that something like this had to arise from the ashes of 9/11," Khan told Spiegel. "In some way, this has the hand of the divine written over it. It's almost as if God wanted to be involved."
(Story continues below)
Feisal Abdul Rauf
The move is supported by the city. The mayor's director of the Office of Immigrant Affairs, Fatima Shama, told the Times, "We as New York Muslims have as much of a commitment to rebuilding New York as anybody."
The city's Department of Buildings records show the building has been the focus of complaints for illegal construction and blocked exits in the last year. Recent entries from Sept. 28 and 29, 2009, indicate inspectors have been unable to access the building. One complaint states, "Inspector unable to gain access – 1st attempt – No access to 5 sty building. Front locked. No responsible party present." The second, just a day later, states, "Inspector unable to gain access – 2nd attempt – no access to building. No activity or responsible party. Building remains inaccessible at Park Place."
Agency spokeswoman Carly Sullivan told the Times the complaints were listed as "resolved" under city procedures since the inspectors were unable to gain access.
Imam Rauf, born in Egypt, has written three books: "What's Right with Islam: A New Vision for Muslims and the West," "Islam: A Sacred Law" and "Islam: A Search for Meaning."
WND reported in 2003 when, at least four times that year, the FBI's New York field office held all-day sensitivity training sessions, not far from Ground Zero, featuring Rauf.
Speaking for about two hours each session, "he gave an overview of Islamic culture and some of the differences between what fundamentalist terrorist groups say are the teachings of the Quran and what he believes, as a student of religion, the Quran actually says," said special agent James Margolin, spokesman for the FBI New York office.
Rauf asserted that the Quran "certainly doesn't counsel terrorism, murder or mayhem," Margolin said. And he said terrorists have misinterpreted the Quranic term "jihad" to mean violent, or armed, struggle against nonbelievers. Rauf claims it means internal struggle.
Rauf was invited to speak in Sydney, Australia, by Premier Bob Carr in 2004. According to the Sydney Morning Herald, he said the U.S. and the West must acknowledge the harm they've done to Muslims before terrorism can end.
He said the West must understand the terrorists' point of view – and he blamed Christians for starting mass attacks on civilians.
"The Islamic method of waging war is not to kill innocent civilians. But it was Christians in World War II who bombed civilians in Dresden and Hiroshima, neither of which were military targets," he said.
According to the report, Rauf said there would be little progress until the U.S. acknowledged backing dictators and the U.S. president gave an "America Culpa" speech to the Muslim world.
On June 4, 2009, President Obama gave a speech to the Muslim world from Cairo, in which he stated:
I have come here to seek a new beginning between the United States and Muslims around the world; one based upon mutual interest and mutual respect; and one based upon the truth that America and Islam are not exclusive, and need not be in competition. Instead, they overlap, and share common principles – principles of justice and progress; tolerance and the dignity of all human beings. … So I have known Islam on three continents before coming to the region where it was first revealed. That experience guides my conviction that partnership between America and Islam must be based on what Islam is, not what it isn't. And I consider it part of my responsibility as president of the United States to fight against negative stereotypes of Islam wherever they appear.
Rauf praised Obama for "embracing Islam in the peacemaking process" in his speech to the Muslim world. He wrote in the Washington Post:
The historic significance of President Obama's speech to the Muslim world in Cairo cannot be overstated. Never before has an American president spoken to the global Muslim community. His speech marked a major shift in American foreign policy. … In just a few sentences he demolished the phony theory of the 'Clash of Civilizations,' which insists that Islam and the West must always be in conflict. Instead, he declared the United States is not at war with Islam and outlined a plan for how the conflict can be resolved. … He captured the attention of Muslims because, unlike most politicians, he was willing to critique both his own country and Muslims where they fell short of their ideals.
In an interview with Beliefnet on Islam and America, a reporter asked Rauf, "Some Islamic charities are being investigated for terrorist ties. Have you seen what you consider to be reputable Islamic charities being financially damaged?"
"We believe that a certain portion of every charity has been legitimate," he responded. "To say that you have connections with terrorism is a very gray area. It's like the accusation that Saddam Hussein had links to Osama bin Laden. Well, America had links to Osama bin Laden – does that mean that America is a terrorist country or has ties to terrorism?"
In 2004, Rauf participated in a 30-second advertisement, broadcast on Arabic television, in which he apologized for alleged abuses at Abu Ghraib prison.
The Times reported Rauf said he believes "Islamic terrorists do not come from another moral universe – that they arise from oppressive societies that he feels Washington had a hand in creating."
Readers of various blogs are outraged at the news of the mosque. Comments include the following:
Muslims are doing this only to see if they get away with it. It's the way Islam spreads in every country these days, like a cancer – through incremental totalitarianism. In this case, they'll quietly open the mosque, then, as they get away with it, they'll ramp up their outrages until someone finally points it out. At that time, their lawyers, backed by the ACLU and various liberal organizations, will pounce.
This is not different than allowing the Nazis to establish their headquarters and propaganda office in NYC in 1938. How come people could tell right from wrong then and not now?
What bonehead allowed this to happen?
That's disgusting. That truly is low. I feel bad for the people who lost family members.
This is outrageous. I just don't have word.
This is called "staging" for the KSM trial.
You've got to be kidding me. If this is true, our beloved country is already gone. We no longer have the America I know and love.
Who wants to bet this place becomes a "tourist attraction" for Muslims? This mosque will become one of Islam's holiest shrines as it sits upon the site of their greatest modern military victory.
Good idea. Maybe terrorists will be less likely to bomb this area if there's a mosque there.
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Previous stories:
Filmmaker admits intimidation by Islam
Islamic states pushing for 'global blasphemy law'
U.S. sponsors plan to restrict free speech
U.N. to make ban on criticizing Islam mandatory?
Support plummets for plan to criminalize Christianity
Criminalizing Christians now losing steam at U.N.
Campaign warns Americans about looming Shariah code
U.S. Treasury teaches 'Islamic Finance 101'
U.S. 'must oppose' Islamic 'anti-defamation' demands
Osama's 'hanging' announced by group
London fundraisers linked to stoning of 13-year-old
Iranians consider mandatory execution for apostasy
'Why We Left Islam' editors blast CAIR
CAIR admits it erred on Farah statement
New Muslim book a hit – before release
Will Muhammad image ignite holy war?
Ex–CAIR chief indicted for 'Baghdad Jim' junket
Support plummets for plan to criminalize Christianity
Criminalizing Christians now losing steam at U.N.
Campaign warns Americans about looming Shariah code
U.S. Treasury teaches 'Islamic Finance 101'
U.S. 'must oppose' Islamic 'anti-defamation' demands
Osama's 'hanging' announced by group
London fundraisers linked to stoning of 13-year-old
Iranians consider mandatory execution for apostasy
'Why We Left Islam' editors blast CAIR
CAIR admits it erred on Farah statement
New Muslim book a hit – before release
Will Muhammad image ignite holy war?
Ex–CAIR chief indicted for 'Baghdad Jim' junket ||||| Michael Berry
The COUNCIL ON AMERICAN-ISLAMIC RELATIONS has filed a complaint with the FCC over comments made by CLEAR CHANNEL Talk KPRC-A (THE 9-5-0 RADIO MOJO)/HOUSTON host MICHAEL BERRY about the mosque proposed for a site near GROUND ZERO in NEW YORK WEDNESDAY. BERRY told a caller named TONY, "No, no, TONY, you can't build a mosque at the site of 9/11. No, you can't. No, you can't. And I'll tell you this -- if you do build a mosque, I hope somebody blows it up ... I hope the mosque isn't built, and if it is, I hope it's blown up, and I mean that."
And I'll tell you this -- if you do build a mosque, I hope somebody blows it up ... I hope the mosque isn't built, and if it is, I hope it's blown up, and I mean that.
"Calls for acts of violence against houses of worship must never be tolerated or excused," said CAIR National Executive Director NIHAD AWAD. "We ask the FCC to demonstrate that incitement to violence is never acceptable on our nation's airwaves."
BERRY posted a response on the station website saying that CAIR "hopes to intimidate anyone who disagrees with them. They have filed a complaint against the MICHAEL BERRY SHOW, because we had the audacity to suggest that a mosque should not be built on our near the site of the 9/11 terrorist attack ... I did NOT advocate bombing any mosque. First, the supposed mosque does not exist. It is just a proposal, and I oppose where they intend to put it. It is spitting in the face of those who died in the 9/11 terrorist attack to put it there. Second, the caller was belligerent, and pushed too far, suggesting that any family member of a victim who is offended is somehow a racist. I can't abide someone dishonoring these families, who've been through so much, in this way.
"This is how CAIR intimidates people into silence. They want to scare people into believing that having differing opinions will cost you your job.
"While I stand by my disagreement of the building of the mosque on the site, I SHOULD NOT have said 'I hope someone blows it up.' That was dumb, and beneath me. I was trying to show 'TONY' how much I opposed his opinion, but I went too far. For that, I apologize to my listeners."
FCC content regulation presently is limited to indecency, not political controversy.
[What's your opinion of BERRY's comment? Do you think talk hosts in general have gone too far recently, or are they just "stirring things up" for ratings? Please share your thoughts below.]
« see more Net News ||||| We told you earlier this month about Mark Williams, the top Tea Party leader who was so enraged by plans to build a Muslim community center near Ground Zero that he referred to the Islamic deity as a “monkey-god” and to Muslims as “the animals of Allah.”
But it turns out that Williams isn’t the only conservative driven to apoplexy by this local development project. Lately, we’ve seen a massive right-wing freakout over the plan for the community center. That freakout has been couched as concern about dishonoring the memory of 9/11 victims. But it’s been so widespread and so vitriolic as to suggest it might just have some uglier roots.
At issue is the proposed Cordoba House, a Muslim community center which would stand 15 stories tall and would be built not directly at Ground Zero, but rather at Park Place, two blocks north of where the Twin Towers stood in lower Manhattan. The center would include a prayer space, a performing arts center, a swimming pool, and other amenities. The effort is being spearheaded by a longtime local imam, Feisal Abdul Rauf, who has said the center would “bridge and heal a divide” and has said it’s his mission to fight radicalism. A local community board voted this week by 29-1 to support the project.
But in the nightmares of right-wingers, the project has been transformed into something more like a shrine to the 9/11 terrorists stuck on top of the site where victims of the attack lay buried, and pushed by a radical Islamic cleric…
• Back in December, when word about the proposal first surfaced, WorldNetDaily posted comments from outraged right-wingers, including: “If this is true, our beloved country is already gone. We no longer have the America I know and love.”
• The Washington Times editorialized today that the proposal is “at best inappropriate, and at worst an attempt to hijack the memory of the Sept. 11, 2001 attacks.” The piece was approvingly tweeted this morning by Keep America Safe, Liz Cheney’s group.
• Investor’s Business Daily judged that the plan is “a monumental sign of weakness. Right now, our enemy is laughing at us.”
• Right-wing radio host Michael Berry exclaimed: “If you do build a mosque, I hope somebody blows it up… I hope the mosque isn’t built, and if it is, I hope it’s blown up, and I mean that.”
• Pamela Geller, whose blog is devoted to raising the alarm about radical Islam, said on CNN the other day that instead of the community center, a monument should be built to “victims of hundreds of millions of years of jihadi wars, land enslavements, cultural annihilations and mass slaughter.”
• Robert Spencer, who with Geller runs “Jihad Watch”, wrote on Human Events: “The Twin Towers, after all, were the symbol of America’s economic power. Placing a mosque by the site of their destruction (at the hands of Islamic jihadists) symbolizes the taming of that power.”
• Andrew McCarthy of the Weekly Standard noted on Fox, in opposition to the plan, that while there are 2,300 mosques in the United States, there are no churches or synagogues in Mecca or Medina.
Of course, these people are only trying to honor the victims of 9/11, and protect Americans from future attacks. Why would anyone think differently? ||||| Traffic passes a building in lower Manhattan that once housed a Burlington Coat Factory store, Thursday, May 6, 2010 in New York. A 13-story mosque... View Enlarged Image
Political Correctness: While New York City OKs construction of a "monster mosque" at ground zero, the feds pay rent to a D.C. mosque tied to the Pentagon attack. Have we gone totally soft?
Imagine on the 10th anniversary of Pearl Harbor, we let the Japanese erect a cultural center at the site of that attack. Exactly. It would never happen.
So why are Manhattan officials bowing to demands by a group called the American Society for Muslim Advancement to open on of all days, Sept. 11, 2011 a 13-story shrine to Islam in the shadow of the beautiful skyscrapers terrorists turned to ashes in the name of Islam? Why aren't they suggesting they do their Islamic "advancement" someplace else? Why of all places there?
Aren't officials at least curious why these supposedly "patriotic" Muslim activists named their planned $100 million mosque after the Great Mosque of Cordoba a legacy of Muslim Spain representing the zenith of Islamic dominance?
There may be nothing to it except that a radical Islamic school in Virginia, raided by the feds after 9/11, also goes by that name. Cordoba University's founder was recently named an unindicted co-conspirator in a terror case. Symbolism is not lost on such jihadists.
New Yorkers should by now have built from that giant hole at ground zero a single, mammoth tower as a one-finger salute to radical Islam and all the terrorists it inspires. Instead, they're building an Islamic tower that Muslim fanatics from around the world will no doubt use as a memorial to their fallen "martyrs" and what they did to us on that "blessed day" of 9/11.
"It's a slap in our face!" said Nelly Braginsky, whose son Alexander was murdered on 9/11.
It's also a monumental sign of weakness. Right now, our enemy is laughing at us. And picture this sickening scenario: 9/11 mastermind KSM getting to see workers breaking ground on the ground zero mosque, as Attorney General Eric Holder escorts him to his Manhattan show trial. If we can't keep even ground zero sacred and free of PC, we truly are doomed to suffer another. And another.
This latest outrage follows one over the Flight 93 National Memorial, which also made a paean to Islam. The original design for the Shanksville, Pa., memorial called a "Crescent of Embrace" featured a pathway in the shape of a crescent moon, a prominent symbol in Islam. Only protests from the families of the victims of the flight downed by Muslim hijackers shouting "Allahu Akbar!" forced its redesign. | Remember Tea Party honcho Mark Williams' “monkey god” outburst? Well he's not the only right-winger spewing flames over the proposed Muslim community center being built a few blocks from Ground Zero. The imam behind the center says it's designed to “bridge and heal a divide” and says fighting radicalism is his personal mission. “But in the nightmares of right-wingers, the project has transformed into something more like a shrine to the 9/11 terrorists,” writes Zachary Roth of Talking Points Memo. Some of the oh-so-rational responses have included: Today's Washington Times editorial, which called the center “an attempt to hijack the memory of the Sept. 11, 2001 attacks.” An Investor's Business Daily editorial declaring it a “monumental sign of weakness.” Radio host Michael Berry's charming declaration that, “If you do build a mosque, I hope somebody blows it up … and I mean that.” A comment, cited anonymously in WorldNetDaily's article on the matter, that it "is not different than allowing the Nazis to establish their headquarters and propaganda office in NYC in 1938.” |
PHAs are key players along with federal, state, and local governments and other entities trying to address the housing needs of low-income families. PHAs contract with HUD to provide adequate housing for low-income residents in return for federal grants and subsidies. Therefore, HUD is not only the primary source of public housing funding but also has the primary responsibility for monitoring and enforcing federal housing regulations. Although the federal government provides PHAs with funding for operating expenses and repairs of public housing, state and local laws determine a housing authority’s organization and structure. In many cities, the mayor appoints the PHA’s policy-setting body or board of commissioners, which, in turn, hires the housing authority’s executive director and may approve other top management positions. Housing authorities may also receive funding from state and local sources. Over time, costs for PHAs have begun to exceed the financial resources available to them, while at the same time the demand for low-income housing offered by PHAs has increased. Although HUD calculates and provides an operating subsidy to supplement the rent paid by residents, the subsidy and rent have not been always sufficient to cover PHAs’ costs. In fiscal year 1996, the federal subsidy of $2.8 billion and the total rent paid by residents covered almost 90 percent of housing authorities’ operating expenses, leaving a gap of about 10 percent of expenses that are not funded by the subsidy or rent. Moreover, residents’ rent has also declined. Currently, residents’ rent is based on their annual income minus certain deductions. Generally, if residents’ incomes decline, the rent they pay declines as well. And a steady decline in the average income of public housing residents has occurred over the last decade: Average income has decreased from 33 percent of the local geographic area’s median income in 1981 to 17 percent in 1995. All the while, according to HUD, the demand for low-income housing has increased, with the number of low-income households with worst case housing needs increasing by 1.5 million between 1978 and 1993 to an all-time high of 5.3 million households in 1993. One purpose of the pending housing legislation is to provide greater flexibility to housing authorities in their operations. The legislation does this by consolidating many public housing grant programs and subsidies into two funds and eliminating statutory requirements such as the “one-for-one” requirement for replacing housing units and the federal preferences for admission that limited housing authorities’ management discretion. Another of the pending legislation’s purposes is to provide for more flexible use of federal assistance to PHAs, allowing them to leverage and combine assistance with funds obtained from other sources. In addition to the pending legislation, HUD and the public housing industry have also begun to foster partnerships in public housing. In May 1996, HUD issued an interim rule to allow housing authorities to combine their funds with private financing to develop public housing or a mixture of public housing and nonpublic housing. HUD has also established an Office of Public Housing Partnerships to oversee financial partnerships that PHAs establish with other entities to leverage federal funding to develop or rehabilitate public housing. Also, the National Association of Housing and Redevelopment Officials, an industry group representing over 2,100 housing authorities, annually highlights innovative management practices. Because federal funding and residents’ rent have been insufficient to fully fund PHAs’ operating expenses, PHAs have begun to search for new ways to make their resources go further. PHAs have formed partnerships with private developers as well as state and local governments and entities to take advantage of such federal programs as the Low-Income Housing Tax Credit and HUD’s HOME Investment Partnerships Program. On the basis of information provided to us by HUD headquarters and field office officials, as well as officials from public housing associations and professional organizations, we contacted 29 housing authorities across the country. We found a broad array of sharing and partnering. PHAs have partnered or entered into business-like arrangements with other PHAs to share resources or to consolidate management in which one PHA manages several others; residents, social service agencies, and community groups to provide employment and other services to residents; nonprofit organizations and state governments to develop low-income housing and affordable housing; and state and local governments to obtain lower cost goods and services. These four types of partnerships or arrangements are summarized below. Our study of 29 PHAs found eight instances of PHAs’ working together to jointly purchase goods and services or consolidate management and thereby achieving cost savings or increased efficiency. By purchasing items together, PHAs can share the costs of the goods and services rather than bearing the costs separately. For example, one group of PHAs split the costs and use of consultants to help comply with regulations governing services for handicapped residents. In another case, a group of over 80 PHAs jointly purchased items such as major appliances—which, according to PHA officials, has increased the efficiency of operations by reducing the administrative burdens of time and paperwork in the purchasing process. Similarly, two housing authorities estimated that they saved $25,000 in staff and travel costs by jointly operating a community development program. According to several PHA officials with experience in consolidating management, consolidation enables PHAs to obtain the benefits of sharing the use and costs of employees and services. For small housing authorities, this partnering can greatly reduce the cost of additional staff and overhead. For example, one large housing authority in our study took over the management of three nearby small housing authorities without increasing the size of its staff. The executive director of the large housing authority said that the consolidation has resulted in reduced overhead and maintenance costs, reduced staff costs, higher productivity, and greater satisfaction by residents at the three smaller authorities. Another official at the large authority said that the smaller housing authorities benefit from the large housing authority’s knowledge of and experience with HUD’s rules and regulations. In commenting on a draft of this report, the Deputy Director of HUD’s Office of Urban Revitalization concurred in this view and said that a tremendous opportunity exists for greater efficiency of operations and cost savings if there is consolidation among smaller PHAs. The Deputy Director said that because executive directors of smaller PHAs may be part-time managers, the PHAs often are not able to remain abreast of public housing regulations. Thus, this economy of management through consolidation can allow the PHAs to maximize the use of their operating subsidies. The Deputy Director also recognized the issue of political resistance to consolidation—an issue that we have heard from PHA executive directors and HUD field office officials—whereby a local mayor may not support consolidation if it means losing control over the city’s housing authority. The Deputy Director said that a way to gain the support of local officials for consolidation may be to allow each PHA to retain its local board of commissioners. In this way, the board would still have policymaking authority for its PHA. In our study, the board was retained in two instances of consolidation, while in a third instance a single board was created for a regional PHA serving 60 cities in six counties. This board consisted of representatives from each of the six counties. Through partnerships and other business-like arrangements with labor unions and residents, four PHAs that we contacted have had some success in providing employment opportunities for some residents. The residents hired through these arrangements engaged in repairing vacant units, maintaining the grounds, and performing janitorial services. By employing residents, PHAs provide them with an income, enable PHA staff to do higher-priority work, and can give residents, as one executive director said, “a sense of pride in their housing developments.” In addition, officials at one of the PHAs that hired residents said that this practice was less costly than hiring private firms to do similar work; officials at another PHA said that the average time that units have been left vacant has been reduced because of residents’ work on the units. For example, one PHA formed a partnership with a local union to provide four residents with union jobs through a 4-year apprenticeship program. Union workers trained and supervised residents in renovating the PHA’s housing units. The PHA pays each apprentice on a sliding wage scale that increases with training and experience. By the end of the 4-year program, residents become members of the union and are paid the same wage as fully trained union workers. In addition to a salary, the residents in the program obtain medical and health insurance, which they may not have had previously. According to the PHA executive director, union officials, and residents, all parties to this partnership benefit: The union increases its membership and work for union members, the housing authority obtains an employed resident and can renovate its units at less cost than using a contractor, and the resident begins a path to self-sufficiency. In addition, eight PHAs in our study took part in partnerships with social service organizations to supply such services as child care and health care to residents and with local colleges to teach college credit courses to residents. These partnerships often made use of programs and grants from HUD and state and local governments. For example, PHAs used the social service agencies to operate programs funded under grants from HUD, such as the Public Housing Drug Elimination Program. Social service agencies provided staff to operate the program and saved the PHAs the cost of hiring staff and, in some cases, provided services at no cost to PHAs. In return for space provided to social service agencies, one housing authority estimates that it has received $400,000 worth of services at no charge over a 2-year period. In another example, a housing authority developed a partnership with a local university to operate a health care clinic for residents. The university provides its faculty and graduate student nurses to staff the clinic, while doctors volunteer their time to provide health services. According to an executive director, an added benefit of partnerships with social service agencies is that the housing authority is connected to a network of services and funding sources that were not previously available. Social service partners have expertise in areas such as providing counseling or health care that PHA employees may not have. Three PHA executive directors told us that they could not have offered services to residents if it were not for the partnerships that were formed. To meet the local need of housing for low-income people, public housing authorities are increasingly working with banks, cities, nonprofit groups, and state and local governments to develop affordable housing. To do this, PHAs use proceeds from the sale of bonds, Community Development Block Grant funds, and state and local funds. One authority that we contacted uses a combination of HUD’s HOME program funds, tax-exempt bond funding, and state funding to develop affordable housing for persons with moderate, low, and very low incomes. To develop affordable housing in another partnership, a housing authority worked with two local nonprofit organizations to operate a handicapped-accessible building for very-low-income persons. The nonprofits owned the building and provided supportive services for persons with disabilities. The housing authority earned income by charging a fee to manage the building. In addition, one authority developed a nonprofit entity that obtained tax credits to develop affordable housing that is not public housing. The housing authority’s executive director said that having public and nonpublic affordable housing allows the housing authority to spread its administrative costs over both types of housing. Five PHAs in our study joined state and local insurance programs to provide coverage for such things as the PHAs themselves, health care, workers’ compensation, and unemployment benefits for their employees. In most cases, the executive directors of the PHAs involved said that the use of state programs resulted in cost savings for the housing authorities. For instance, by joining a state unemployment insurance program instead of being self-insured, one housing authority estimated savings of $20,000 per year. In addition, by joining the local county’s health insurance program, one housing authority reduced its cost to fund employees’ family insurance plans by about 50 percent (from $400 per month to $198 per month per employee). We provided a draft of this report to HUD for its review and comment. We discussed the draft report with HUD’s Director of Project Management Staff, Office of the Deputy Assistant Secretary for Public and Assisted Housing Operations, and HUD’s Deputy Director of Urban Revitalization, Office of the Deputy Assistant Secretary for Public Housing Investments. In commenting on our draft report, these officials concurred that partnerships are beneficial to PHAs in providing cost savings and other benefits. The Deputy Director of Urban Revitalization said that consolidation, in particular, offers a high potential for small PHAs—those with under 100 housing units—to share expertise and key staff and to jointly purchase goods and services. We incorporated these and other clarifying comments into the report, as appropriate. To identify PHAs that were engaging in beneficial partnerships, we conducted interviews with officials at HUD headquarters and field offices and the major industry groups representing PHAs, including the Council of Large Public Housing Authorities, the National Association of Housing and Redevelopment Officials, and the Public Housing Authorities Directors Association. These officials and representatives identified PHAs that they believed were engaging in partnerships that would illustrate effective leveraging and other beneficial uses of their resources. We judgmentally selected 29 of these PHAs and conducted telephone and face-to-face interviews with their executive directors and other officials; however, we did not independently verify the information provided by PHA officials in this report. We conducted our work from December 1995 through July 1996 in accordance with generally accepted government auditing standards. As arranged with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report for 30 days. At that time, we will send copies of this report to the appropriate Senate and House committees; the Secretary of HUD; and the Director, Office of Management and Budget. We will also make copies available to others on request. If you or your staff have any questions, please call me at (202) 512-7631. Major contributors to this report are listed in appendix II. We contacted 29 public housing authorities (PHA) about their use of partnerships and other business-like arrangements with state and local governments and entities. We found that the partnerships and arrangements could be grouped according to four purposes, which were to (1) share resources or consolidate management among public housing authorities; (2) provide services, training, and employment to residents; (3) develop affordable housing by leveraging staff and financial resources; and (4) obtain goods and services at lower costs by taking greater advantage of state and local programs. Eight PHAs in our study formed partnerships with one another to share use of employees, make joint purchases, and consolidate management. By sharing an employee and making joint purchases, PHAs told us they reduced their expenses and avoided bearing higher costs individually. The Red Wing Housing and Redevelopment Authority reported that it reduced administrative costs for the Department of Housing and Urban Development’s (HUD) Family Self Sufficiency (FSS) Program, which provides residents with services to promote economic independence and self-sufficiency, by sharing one program coordinator with three other small authorities. According to the executive director, sharing this employee saves the authorities about $50,000 over a 2-year period. Also, by jointly operating a community development program with another authority, the two housing authorities obtained estimated savings of $25,000 in travel and staff costs. In addition, by jointly using state funds and issuing bonds, the two housing authorities reduced the cost of bond issuance fees by $12,000 and provided affordable mortgage financing to low- and moderate-income households. Contact: Richard Grabko, Executive Director, (612) 388-7571. In 1992, the Carolinas Council of Housing and Redevelopment and Codes Officials, which represents PHAs located in both North and South Carolina, formed a voluntary organization called the Comprehensive Purchasing Consortium. According to the Council’s president, the consortium has increased the efficiency of housing authorities’ operations by reducing the administrative burden of time and paperwork associated with purchasing expensive value items such as major appliances. Since 1992, sales totaled over $12 million for items, including nearly 7,000 ranges and refrigerators. Contact: Carolyn Beaman, Comprehensive Purchasing Consortium Chairperson, (910) 226-8421. The Housing Authority of Columbus manages the public housing units of three other housing authorities located in Georgia: Buena Vista (79 units), Ellaville (40 units), and Harris County (43 units). The three housing authorities have their own board of commissioners that formulate policy decisions for their housing authorities. The executive director said that as a result of the consolidation, the housing authorities have reduced staff costs, improved residents’ satisfaction, and improved performance. Contact: Stanley Keene, Executive Director, (706) 571-2807. The housing authority provides 170 units of public housing and provides assistance to 684 families in its Section 8 assisted housing program in 60 cities covering a 6-county area in Iowa. Instead of several housing authorities managing the low-income housing in this area, one executive director and his staff manage the housing authority. The housing authority is governed by a commission composed of two commissioners from each local government. The commission elects a 18-member board of directors, which contains 3 members from each county. The Eastern Central Intergovernmental Association, an organization of local governments in Iowa served by the housing authority, provides staff and administrative support for the housing authority. According to the housing authority’s executive director, the association can combine resources from various programs to reduce overhead and personnel costs for the housing authority. Contact: William Baum, Executive Director, (319) 556-4166. At the request of HUD and the state of Washington, the Bremerton Housing Authority manages other housing authorities. Specifically, the housing authority provides management services to the Mason County Housing Authority and manages Section 8 housing in Lewis County, Washington. Before this arrangement in Lewis County, which does not have a housing authority, the state managed the Section 8 housing. However, according to the Bremerton Housing Authority’s executive director, state management of Section 8 housing was a more costly option than having his authority do it. Contact: Merrill Wallace, Executive Director, (334) 774-8210. The Monroe Housing Authority manages three other housing authorities in Georgia—Social Circle, Loganville, and Madison—that have 70, 66, and 20 housing units, respectively. The Monroe Housing Authority has 383 units. According to the executive director, the combined PHAs have reduced operating costs because of a centralized maintenance and administrative staff. Contact: Al Braddock, Executive Director, (706) 267-6591. One staff of 84 persons operates both the Decatur and Dekalb Housing Authorities. Yet each authority is governed by its own board of commissioners. A benefit of this arrangement highlighted by housing authority officials is that consolidated management produces greater economies of scale by spreading administrative costs across two authorities instead of one. For example, when private contractors provide services and goods to both of the housing authorities, the fixed costs of hiring a contractor are spread out among the two, instead of having one authority bear the cost. Contact: David Smotherman, Executive Director, (404) 377-0425. The Yarmouth Housing Authority has joined a consortium of five PHAs that collectively purchase consultant services for studies on sites’s compliance with the Americans With Disabilities Act (ADA) and other goods and services whenever feasible. In addition, the Yarmouth Housing Authority and two other housing authorities are filing a joint application under HUD’s FSS Program to fund a single FSS social service coordinator to manage the use of social service agencies for the three PHAs. Contact: Marilyn E. (Penny) Tanner, Executive Director, (508) 398-2920 ext. 13. The Housing Authority of St. Louis County has joined an organization of 80 housing authorities in Missouri called the Missouri Housing Authority Risk Management Pool that has resulted in cost savings. According to the housing authority, by joining the organization, the authority was able to obtain insurance that reduced the annual insurance costs per car from $1,000 to $750. The housing authority also obtains property and casualty insurance from its membership in the group. In addition, the housing authority is examining the possibility of joining a recently developed state government health insurance pool. Contact: Neil Molloy, Executive Director, (314) 428-3200. PHAs in our study frequently entered into partnerships and business-like arrangements for the benefit of their residents. PHAs worked with social service organizations, community groups, and other local entities to provide child care, health care, and educational opportunities to their residents. Also, to give residents job opportunities in housing unit repair, janitorial services, and grounds maintenance, PHAs partnered with residents and labor unions. The Macon Housing Authority uses funds from HUD’s programs, such as the Family Investment Centers Program and Public Housing Drug Elimination Program, to form partnerships with local agencies and the city of Macon Police Department. For the Family Investment Centers Program, local agencies have pledged that they would provide social services worth $2 million per year to the authority. Partnering with the local police and other agencies also enabled the authority to operate its Public Housing Drug Elimination Program without having to hire additional staff. The housing authority also receives funding from the departments of Health and Human Services and Labor to run a program that assists residents seeking employment. Contact: John Hiscox, Executive Director, (912) 752-5070. The Henry County Housing Authority hired a “Unit Turnaround Crew” of two residents and one maintenance staff person. The housing authority pays residents $6 per hour, and they work 20 hours per week. The crew members prioritize the vacant units they work on according to the units’ conditions. The crew repairs units in the best condition first to minimize the time between occupants. The executive director said that, as a result of the crew, the time that units have been left vacant has dropped significantly. Contact: Kathleen Barton, Executive Director, (309) 852-2801. The St. Clair Housing Authority hires resident-owned businesses to cut grass and pick up trash. The executive director said that having the groups perform these tasks is not less expensive than other methods, but it gives the residents a sense of pride in their housing developments, provides residents with some extra income, and frees up housing authority maintenance staff to respond to work orders that need the expertise of professional maintenance workers. Contact: David Wagner, Executive Director, (618) 277-3290. The Housing Authority of Savannah contracts out janitorial service to its resident association. According to the executive director, the residents clean the buildings better than other janitorial firms have in the past. The housing authority excludes from the residents’ rent calculation the income that the residents earn from their employment. Residents give a portion of their revenue to community projects, such as distributing Thanksgiving and Christmas food baskets. Contact: Richard Collins, Executive Director, (912) 235-5800. The Minneapolis Public Housing Authority joined Head Start—a program under the Department of Health and Human Services that provides funding for education, health, and social services for low-income children—to operate a daycare facility within the authority. To finance the construction of the daycare building, the housing authority used funding from HUD’s Comprehensive Grant Program, which provides funds to repair, improve, and construct public housing units. Head Start, in turn, pays the cost to operate the facility. The executive director said that the housing authority could not have developed the facility without Head Start as a partner. Contact: Cora McCorvey, Executive Director, (612) 342-1439. The Fargo Housing Authority uses partnerships to operate HUD’s Single Room Occupancy Program, which provides housing to homeless persons who benefit from a single-living environment. The executive director said that because residents in its single room occupancy building frequently have mental and physical health problems, the housing authority formed partnerships with several state agencies to provide services to the residents. The executive director believes that this relationship with state agencies, which has expanded to his public housing program, eliminates the need for him to hire additional staff with expertise in social work. Contact: Ken Donarski, Executive Director, (701) 293-6262. The Housing Authority of Salt Lake City has partnership arrangements with the Salt Lake City School District, community colleges, and local universities to operate education programs. For example, in one program, residents are taught to build cabinets, sheds, and wrought iron fencing. The housing authority provides funding to buy raw materials and uses the finished product within the grounds of its properties, thereby guaranteeing a market for the program’s products. According to the executive director, the housing authority is able to obtain these products through the program at about half the cost of the finished product on the private market. Contact: Rosemary Kappes, Executive Director, (801) 487-2161, ext. 1202. The Huntington Housing Authority is working with a group of 34 health, education, and social service agencies called the Family Resource Network to provide services such as substance abuse counseling, emergency housing, and domestic violence counseling to residents. The executive director said that over a 3- to 4-year period, the Network has served 4,000 to 5,000 people. Except for the executive director’s unpaid position on the Network’s committee, Network staff are not public housing staff. The Network staff are funded by the state Governor’s cabinet on children and families and federal funding through the federal Enterprise Community/Empowerment Zone program that provides funds for community development. The executive director explained that by using the Network, the housing authority is able to collaborate with many agencies by using one point of contact—the Network—which is more efficient and cost-effective than having to contact each agency separately. The executive director estimated that using the Network has saved the authority $10,000 per year in staff time and has enhanced applications for federal and state funding that require evidence of collaboration. Contact: William Dotson, Executive Director, (304) 526-4439. When expectations for funds from HUD’s Public Housing Drug Elimination Program were not met, the Mercer County Housing Authority developed a service center as a place for social service agencies to reside and bring local services to residents. In this partnership, the housing authority pays the cost of maintenance to the building and the cost of some materials, and the social service providers do not charge the housing authority for their services. The executive director estimated that over a 2-year period, the housing authority received $400,000 worth of services at no direct cost to it. Contact: Dewitt Boosel, Executive Director, (412) 342-4000. The housing authority of the city of Stamford has a partnership with a local union to employ residents in repairing deteriorated conditions and abating lead-based paint hazards in the housing authority’s units. Union workers provide training necessary for the residents to perform the work, while the housing authority pays the residents a salary that increases as they become more experienced. Currently, four residents are employed in the program. After 4 years, the residents become members of the union and are paid at a full-time union member’s salary. As residents graduate from the program, new residents will be allowed to enter. As a result of the program, the union obtains the benefit of increasing its membership, the housing authority has provided a resident with a job, and the resident gains a salary along with medical and health insurance benefits. The executive director said that the HUD field office was very supportive and helped the housing authority determine how to use HUD’s “force account” regulation to justify using funding for the Comprehensive Grant Program to pay the residents while they are in the program. Contact: Edward Schwartz, Executive Director, (203) 977-1400. To emphasize education, the housing authority formed a partnership with local schools to enforce school attendance by public housing children. Children who are absent on any day are not allowed to participate in any housing authority recreational activity that day or, if they are on a sports team, cannot play in the next sport activity. The Chief Executive Officer (and executive director) said that the average absentee rate among students at the housing authority has gone down from 3 days per month to 1 day per month. In addition, he explained that the cost of vandalism at the housing authority has been reduced from $89,000 per year to $5,000 per year. The housing authority has partnerships with other local organizations as well. For example, a local college provides instructors to teach classes to residents on the authority’s property. The housing authority does not pay the instructors, and the college does not pay rent for the space to teach. In addition, local police have trained residents in reporting crime. Contact: Bob Armstrong, Executive Director, (402) 444-6900. The Lewiston Housing Authority has developed an arrangement with its local police department. The department operates substations at three public housing sites. The housing authority provides an office with a long distance telephone line, and the department pays the remainder of the substations’ operating expenses. According to the executive director, the department’s visible presence deters crime and improves the quality of life in the developments. Another benefit is that officers chaperon dances and referee hockey games, providing children with what is often their first positive experience with law enforcement, the executive director explained. In addition, the housing authority has entered into a partnership with the St. Mary’s General Hospital in which the authority provides space for an inner-city free medical clinic that is staffed by physicians, nurses, and social workers from the hospital who volunteer their time. Also, the housing authority provides space for the Lewiston Adult Education Literacy Project, a program that provides literacy training and job counseling for the homeless, as well as providing space for Head Start programs for child daycare, education, and young teen parenting classes. Contact: Sandra Knowles, Executive Director, (207) 783-1423. The Denton Housing Authority and Texas Woman’s University created a health care clinic and a dental clinic for low-income people. The housing authority provides the space for the clinics, and the university provides faculty and graduate students who are registered nurses. Local medical doctors and dentists volunteer their time, and a grant from the state health department pays for physicals, pap smears, and mammograms to low-income women. Dental surgeons and other specialists volunteer to do procedures that are too complicated for the clinic. The United Way, the Community Development Block Grant, and local organizations provide the funding for equipment and supplies. Contact: Marian Hamilton, Executive Director, (817) 383-3039. In partnership with state, local, nonprofit, and private organizations, PHAs developed housing for low-income persons by using funds from federal programs such as the Community Development Block Grant (CDBG) and the HOME Investment Partnerships Program to finance housing development. In addition, PHAs used resources from outside federal programs in partnership with state, local, and private groups. For example, PHAs issued bonds, obtained state funding, and used tax credits. According to the executive director, the King County Housing Authority issues bonds and uses state and local funding as well as funds from the CDGB and the HOME Investment Partnership Program to obtain, own, and manage housing. Over the last 5 years, the authority has used over $100 million in tax-exempt bonds, low income tax credits, and other funds to purchase and rehabilitate apartments that are 12 to 20 years old. These developments primarily serve low-income households between 40 and 60 percent of the area median income. The housing authority uses CDBG funds in conjunction with bonds in the acquisition of manufactured homes, which are very popular with the elderly. The authority has five developments of manufactured homes, ranging from 30 units to 165 units per development. The authority also sets aside space in its buildings for local service agencies such as the Boys & Girls Clubs and the YWCA. For example, the housing authority purchased a building and leased space in it to a local mental health organization. The executive director believes that partnering with agencies such as these helps the housing authority obtain additional funding because of the agencies’ access to private donations and other local sources of operating funds. Contact: Jim Wiley, Executive Director, (206) 244-7750. The Housing Authority of the city of Boulder entered into a partnership with a private entity, which resulted in the construction of a building with 124 units. According to the executive director, this development is producing income that is used to help defray some of the housing authority’s expenses in its public housing program. The housing authority has another partnership with two local nonprofit organizations to operate a 19-unit handicapped-accessible building to house very low-income residents. One of the nonprofits owns the property, and the other nonprofit provides support services. The housing authority earns income by charging a fee to manage the building. The authority also purchased one building for low-income housing, using a $300,000 grant from the city government. The city and the housing authority entered into a formal agreement to ensure that the rents remain affordable to residents whose incomes represent less than 60 percent of the area’s median income. Contact: Kathy McCormick, Assistant Director of Housing, (303) 441-3157. Twice, the Housing Authority of Salt Lake City has created nonprofit agencies to develop affordable housing. The nonprofits, in turn, used tax credits to attract partnerships with other private entities. The housing authority now manages as many units developed in partnership with private entities as it manages public housing units. Because both types of units are administered by the housing authority, management costs are being spread over twice as many units. Contact: Rosemary Kappes, Executive Director, (801) 487-2161, ext. 1202. The Montgomery County Housing Opportunities Commission operates public and assisted housing and uses a variety of funding sources to develop low- and moderate-income housing. The commission has used state and county funding, federal low-income tax credits, funds from the HOME Investment Partnerships Program, and tax-exempt bonds to finance a variety of affordable housing units. In addition, to develop low-income housing for its residents, the commission obtains housing from the county’s Moderately Priced Dwelling Unit Program, which requires developers of most new communities to provide a number of units that will be made available only to low-income persons. Contact: Richard J. Ferrara, Executive Director, (301) 929-2382. Housing authorities in our study joined in state and local programs, including health, automobile, or workers compensation insurance programs, to obtain goods and services at significantly reduced costs. Executive directors told us that in most cases cost savings resulted from the PHA’s belonging to these programs. The executive director of the Stutsman County Housing Authority persuaded the county to include the housing authority in a county insurance pool, even though the housing authority’s employees technically are not employees of the county. The executive director told us that joining the insurance pool reduced the housing authority’s costs for a family health insurance plan from over $400 a month to $198 per month per employee. Contact: Cheryl Wegner, Executive Director, (701) 252-1098. The Sanford Housing Authority worked with its state insurance board to develop separate workers’ compensation rates for different categories of the authority’s employees instead of using a “blended” rate. The executive director said that this resulted in significant savings for the authority because the blended rate was established on a national basis and did not match the local market. Contact: Mike Eisensmith, Executive Director, (207) 324-6747. The Portland Housing Authority reports that it has achieved cost savings as a result of an informal relationship with the city of Portland. For example, the authority’s maintenance department borrows equipment from the city’s Public Works Department rather than renting it. Also, the authority buys fuel for its vehicles through the city and, therefore, receives the discounts associated the city’s bulk-purchasing arrangement. In addition, the authority uses the city’s nursing services to provide care for its elderly residents. Finally, the city’s Recreation Department and the Boys Club pay for the cost of summer recreation programs that the housing authority funded in the past, but now cannot afford. According to the executive director, these partnering arrangements were established informally and did not require amending the housing authority’s cooperation agreement with the city. Contact: Peter Howe, Executive Director, (207) 773-4753. The Huntington Housing Authority is a member of a West Virginia state purchasing program. According to the executive director, the housing authority’s use of the program to purchase five trucks saved $3,000 per truck. The executive director said that the housing authority will continue to solicit local vendors to provide bids for services, but it will use the state buying program when it is cheaper than local bids. Contact: William Dotson, Executive Director, (304) 526-4439. According to the executive director, the Lake County Housing Authority assesses the cost and benefits of self-insurance versus using the state insurance program. After having its own unemployment insurance for almost a decade, the housing authority determined that participating in the state unemployment insurance program would save the authority about $20,000 a year. Contact: Alon Jeffery, Executive Director, (708) 223-1170, ext. 201. Eric Marts, Assistant Director Martha Chow, Evaluator-in-Charge Johnnie Barnes, Senior Evaluator Gwenetta Blackwell, Senior Evaluator Janet Boswell, Senior Evaluator Frank Taliaferro, Senior Evaluator Sherrill Dunbar, Evaluator Stephen Jones, Evaluator Steven Westley, Evaluator The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a congressional request, GAO provided information on partnerships and other business-like arrangements that public housing authorities (PHA) have made with public and private-sector groups to provide residents with needed services and to supplement traditional PHA funding sources, focusing on: (1) four types of such arrangements; and (2) PHA officials' views on the benefits of these arrangements. GAO found that: (1) in its discussions with housing authorities, GAO found that to leverage their resources, enhance their ability to deliver services, and reduce their costs, they have established four basic types of partnerships or arrangements; (2) the authorities partnered and worked with: (a) other housing authorities to take advantage of economies of scale in purchasing items such as large appliances or in consolidating their management activities; (b) their residents and various community and nonprofit groups to provide social services such as health and child care, job training, and employment for residents; (c) state, local, and commercial entities to develop and finance affordable housing for low-income families; and (d) state and local governments to acquire goods and services such as insurance at lower costs; and (3) although about one-third of the officials at the housing authorities that GAO contacted could quantify the cost savings that have resulted from their partnerships, in general PHA officials who GAO contacted agreed that the nonmonetary benefits--including training, an improved quality of life, and certain social services--were significant and would not have been obtained without the shared experience of the partnership. |
Capitalizing on the buzz from his weekend rally, talk host Glenn Beck launched a new online magazine called The Blaze overnight.
His rationale:
If you are like me, watching the news or reading the paper can be an exercise in exasperation. It’s so hard to find a place that helps me make sense of the world I see. Too many important stories are overlooked. And too many times we see mainstream media outlets distorting facts to fit rigid agendas. Not that you’ve ever heard me complain about the media before. Okay, maybe once or twice. But there comes a time when you have to stop complaining and do something. And so we decided to hire some actual journalists to launch a new website — The Blaze. And we moved fast. We built the team and the site in just two months. We want this to be a place where you can find breaking news, original reporting, insightful opinions and engaging videos about the stories that matter most. The Blaze will be about current news — and more. It’s not just politics and policy. It’s looking for insight wherever we find it. We’ll examine our culture, deal with matters of faith and family, and we won’t be afraid of a history lesson.
A decade ago, this would have filled a legitimate niche. But there are now dozens of online news sites, many from the right, which do precisely this.
Mediaite‘s Steve Krakauer reports the site will be edited by Scott Baker, formerly of Breitbart TV and host of “The B-Cast”.
People will inevitably make the comparison to Arianna Huffington – whether Beck’s role as figurehead behind the site will make The Blaze into a conservative Huffington Post. “The one thing pretty clear around Mercury [Beck’s company] is that Glenn is not short on ideas or hesitant on input,” Baker said. “His input is already evident in how the site looks, and that’s what will continue. It will be a continual flow of tips and suggestions and encouragement.” The “small scrappy staff” behind The Blaze include Baker as well as Jon Seidl, formerly of the Manhattan Institute and American Spectator, and Meredith Jessup, formerly of Town Hall. Also, Pam Key of Naked Emperor News will contribute as a video editor. Baker moved over to Mercury at the beginning of June and began shaping the site. He will continue hosting “The B-Cast” the daily web show, with Liz Stephans.
Aside from the ubiquitous ads from the Goldline scamsters, which seemingly undercuts the “faith and family” message, the site looks very much a right-leaning Huffington Post. Tucker Carlson is already trying to fill that niche with Daily Caller. But, let’s face it, Beck is a much bigger draw than Tucker. The site has a very good chance of catching on despite the competition.
UPDATE: In terms of the HuffPo comparison, there are at least two ways in which The Blaze thus far falls short.
First, while Beck is relying on a “small scrappy staff,” Huffington has a massive one, most of which are unpaid. Presumably, Beck will follow suit here and, unlike Carlson, he’s well positioned to inspire enthusiasts willing to provide hundreds of pages of content every day in order to support the cause and for the privilege of seeing their name in print.
Second, while Huffington launched her site intending it to be a conglomeration of celebrity opinion — which it became — it only succeeded as a business model when she gave the audience what it really wanted. Which is to say, celebrity gossip and soft core pornography. While all or almost all of the stories highlighted on the front page on any given day are about politics, that’s not where the pageviews are coming from:
Given his family values platform, Beck will have a hard time copying this plank of Huffington’s success. ||||| Love or loathe his politics, it’s becoming impossible to ignore both the presence and power of Glenn Beck.
As I detailed in our Beck cover story this past spring, his now $35 million-a-year empire includes a variety of Web offerings as well as a popular radio program, Fox News TV series, books, podcasts, speeches, newsletters and stage shows. (To see how he makes his millions, go here.) Now, on the heels of his well-attended “Restoring Honor” rally over the weekend, he is rolling out yet another component: a “news and opinion website” called TheBlaze.com.
Though Beck’s precise role in the new ad-supported Web venture is not yet known, he has gathered a small staff lead by editor and frequent collaborator Scott Baker, formerly on Breitbart TV. In a related post Monday evening, Mediaite’s Steve Krakauer noted that Beck’s efforts will inevitably be compared to another politically-minded media personality, Arianna Huffington – and his site the conservative counterpart to her Huffington Post.
In Beck’s inaugural entry on the site, he outlined both his motivations and expectations for the new project:
“Too many important stories are overlooked. And too many times we see mainstream media outlets distorting facts to fit rigid agendas. Not that you’ve ever heard me complain about the media before. Okay, maybe once or twice.
But there comes a time when you have to stop complaining and do something. And so we decided to hire some actual journalists to launch a new website — The Blaze. And we moved fast. We built the team and the site in just two months.
We want this to be a place where you can find breaking news, original reporting, insightful opinions and engaging videos about the stories that matter most.
The Blaze will be about current news — and more. It’s not just politics and policy. It’s looking for insight wherever we find it. We’ll examine our culture, deal with matters of faith and and family, and we won’t be afraid of a history lesson.”
Further down in the post, Beck joked that he’ll have no trouble keeping his staff busy “by sending a zillion story ideas at all hours.” To know Beck is to know neither that quantity nor that time-stamp is much of an exaggeration. This is the man who cooked up the contents of a new book while on stage performing those of an old one, a testament to both his creativity and his mastery of multi-tasking. Or as he likes to say, being “riddled with ADD.”
As I wrote in April, “His hyperactivity is a blessing and a curse for his 34 full-time staffers… who chase after Beck and his volcanic mental eruptions, helping him turn those words into new productions and sources of profit.” (Mercury Radio Arts’ employee count has since expanded, though an exact number was not available at press time.)
By launching a site propped up by a team of journalists rather than just a hub for his own (popular) rants, Beck appears to be making good on another promise: to expand the Beck empire without simply serving up more Beck. Though there’s still a tremendous amount of him out there –and it’s hard to believe his presence won’t be known on the new site– The Blaze seems an effort to not only build his farm team but also promote his larger themes without risking his own overexposure, not to mention wreaking (further) havoc on his already dizzying schedule.
“My goal,” he said this spring, “is to be able to create a media company that has a certain quality and expectation to it but is not about Glenn Beck.” Referring to his idol Walt Disney, whose portrait hangs in his midtown Manhattan office, Beck said he’d like to play more of a visionary role going forward. “Right now I’m Walt and Mickey,” he explained of his dual roles as overseer and star. “I’d like to just be Walt, but I think we’re a few years away from that.” ||||| I have mixed feelings on this and I will explain that:
Via Mediaite:
Having conquered TV, radio, book publishing and now live events, Glenn Beck is looking to expand his media empire into a new arena – the web (obviously GlennBeck.com is thriving too). Mediaite has the exclusive details about a news and opinion website Beck is launching tonight. Here’s what to expect. Beck’s new site is called TheBlaze.com, and will be edited by Scott Baker, formerly of Breitbart TV and host of “The B-Cast”. In an exclusive statement, he tells Mediaite: Our hope is that everyone who comes to The Blaze finds original reporting, insightful opinions and engaging videos about the stories that matter most. We are excited to launch and I look forward to keeping Scott and his team busy by sending countless ideas at 3am every morning. We talked to Baker today about what readers can expect from the new site, the team behind it and more. “It’ll be news and information,” he told Mediaite. “Some commentary and opinion stories we’re interested in that are being under-covered or not covered.” People will inevitably make the comparison to Arianna Huffington – whether Beck’s role as figurehead behind the site will make The Blaze into a conservative Huffington Post. “The one thing pretty clear around Mercury [Beck's company] is that Glenn is not short on ideas or hesitant on input,” Baker said. “His input is already evident in how the site looks, and that’s what will continue. It will be a continual flow of tips and suggestions and encouragement.”
As I said above, I do have mixed feelings about this; let me explain. My hope is, that Glenn Beck’s team will do hard reporting and critical thinking pieces about the players in the Conservative movement. My fear and realist intuition tells me, however, that this site will most likely be; and I do hope that I am wrong — just another Conservative echo chamber for the right. I think one of the biggest issues with the Conservative Blogosphere, is that there just is not any critical thinkers or intellectuals anymore. All you have are these people on the far-right, who stick to the normal talking points. There are exceptions to this rule, such as this site here. But the majority are just a part of the echo chamber. Interestingly enough, the site that I just referenced, is considered by some, not to be Conservative enough for their liking. Which I find personally to be quite strange.
Speaking of that echo chamber, let me say this; some of you might have noticed that this site’s tone has changed a bit. I will explain that. When I first switched sides politically after basically “Waking and smelling the coffee” on the Democratic Party; I began blogging as a Conservative. At first I was a strict Paleo-Conservative. Because I just did not agree with President Bush at all. In fact, he was the reason why I started blogging in the first place. Did I suffer from BDS or Bush Derangement Syndrome? Not as bad as you would think. I simply could not stand the man’s arrogance. But was not as whacked out about it as some were and still are on the left and some in Paleo-Right circles.
Anyhow, as I went along, I began to see; like I did with the Democrats, that there were just things in the Paleo-Conservative arena that took me aback a bit. I mean, it is one thing to not like the identity politics of the left. But it is an entirely different thing to look at black people as intellectually inferior to white people. It is one thing to dislike the Identity Politics, when it comes to the Jewish Race, on the right and disagree with Wilsonian Foreign Policy. However, it is another thing entirely to believe that there is some sort of Jewish cabal to overthrow the United States Government and refer to that as the “Zionist Occupational Government” or ZOG as it is called by many Paleo-Cons.
Continuing; After coming the realization that the Paleo-Con right was not much about anything other than bitterness and resentment of those who kicked them to the sidelines for being the true bigots that they are. I basically decided to become a part of that “Echo Chamber.” I tried that for a while and for I while I was content with it. However, as I went along; I simply began to grow frustrated with what I saw as just straight up propaganda by the right. Especially when it came to President Obama. I mean, I do not like his Socialist nonsense anymore than anyone else. But there is just some of that “Shrieking Harpy” nonsense that I just do not agree with. Further more, I still remain convinced that Wilson foreign policy is just wrong. I have always vowed on this blog, that I would tell you want I think. Even if it means that someone calls me a “Neo-Con”, a “fake Conservative” or whatever else that any of this mindless sheep want to hang on me. I would rather be truthful and straight with you all, than to push a damned MeMe on a blog to suit everyone else. My feelings are SCREW EVERYONE ELSE. Because they are not me; and I will not publish propaganda here to appease anyone else. I have never done that, and I never will.
In Closing: I hope Glenn Beck’s new site is an independent Conservative Voice that speaks for itself; and not the talking points of the Right. More of that is needed, and that is what I will do here on this Blog, no matter the cost. ||||| “Glenn Beck,” a longtime collaborative performance art project run by a team of situationist pranksters, has moved into its next phase! Not content with posting dadaist nonsense on the GlennBeck.com URL — so on the nose! — the team acquired TheBlaze.com (the name refers to the power of flame to cleanse away man’s attempt to impose rationality on the world) as a repository for their more experimental word-collage work. “Explicit Poetry GPS Phones Help Illegals!” the chief Glenn Beck creative directors shouted, as the writing staff snapped their fingers and rattled bongos.
Like any good postmodern creative collective, Glenn Beck spends a lot of time on self-referential material. Here is a list of all the stories on the front page of the site that are about TheBlaze, or Glenn Beck, or the live comedy show the troupe put on in Washington this past weekend!
“Glenn’s Disgrace? Shocking Racism at Al Sharpton’s MLK Anniversary”
“‘Reclaim the Dream’: Education Secretary Pressed Employees to Attend Sharpton Rally”
“A Message From Glenn”
“HuffPo Pulls Glenn Beck ‘Sex Tape’ Article”
“Black Robe Regiment: The Clergy of 8/28″
“NY Times Columnist on Beck: ‘I Underestimated the Man’”
“The Children of 8/28″
“Slideshow: Newspaper Coverage of 8/28
“Kurtz Defends Beck: He’s Not Like Al-Qaeda”
“In Memory of MLK: A Radical Leftist Agenda” (“Glenn Beck’s rally avoided politics, but Rev. Al Sharpton’s portrayed the legacy of Martin Luther King Jr. dream as an extension of the Democratic Party”)
Of course, an art group can’t survive without patrons, and that’s why community-minded organizations like Goldline and Dick Armey’s grassroots FreedomWorks organization have stepped up to the plate, buying plenty of banner ads.
You will of course want to visit TheBlaze.com, but at the time of writing it’s unavailable, due to an “Error establishing a database connection.” Presumably the site has been overwhelmed with traffic due to America’s abiding hunger for cutting-edge, nonlinear multimedia art. [The Greatest Website Ever Made] | Glenn Beck has jumped into the online news game with “The Blaze.” Will it live up to the hype? Here’s what people are saying: The Blaze is a great move for Beck, because it allows him to expand his media empire “without simply serving up more Beck” and risking overexposure, writes Lacey Rose of Forbes, recalling an interview in which Beck proclaimed his admiration for Walt Disney. “Right now, I’m Walt and Mickey,” he said. “I’d like to just be Walt.” The whole “conservative Huffington Post” thing would have made perfect sense—a decade ago, writes James Joyner of Outside the Beltway. But now “Tucker Carlson is already trying to fill that niche with Daily Caller,” and there are dozens of other conservative news sites besides. And that's part of the problem, writes one Political Byline blogger. "My fear and realist intuition tells me, however, that this site will mostly be—and I do hope that I'm wrong—just another Conservative echo chamber." Wonkette meanwhile mocks Beck’s entire enterprise, calling it “a longtime collaborative performance art project run by a team of situationist pranksters.” The Blaze is clearly intent on serving up "dadaist nonsense" and “beatnik wordplay.” Just look at the current headline (see image). |
Argentina's political upheaval in late 2001 that led to the resignation of President Fernando de la Rua should be viewed in the context of its historical political development. Before 1930, Argentina enjoyed some 70 years of political stability that facilitated rapid economic development and made Argentina one of the world's wealthiest countries. It ranked seventh in the world in per capita income in the 1920s. In contrast, from 1930 until 1983, Argentina experienced significant political instability, characterized by numerous military coups, 25 presidents, 22 years of military rule, and 13 years of "Peronism." When the military intervened in 1943, the regime came to be dominated by a colonel serving as Secretary of Labor, Juan Peron, who went on to build a formidable political base through support from the rapidly growing union movement. Peron's mobilization of the working class had an enduring effect on Argentina's political system over the next four decades. Even when Peron was ousted by the military in 1955, Peronism as a political movement survived despite attempts by the military and anti-Peronist sectors to defeat it. After his ouster, a series of civilian and military governments ruled until 1973 when Peron was reelected to office after 18 years of exile. Just a year later, however, Peron died and was succeeded by his second wife Isabel, who had little political experience. Economic and political chaos ensued, with political violence surging and Argentina experiencing its first bout of hyperinflation. As a result, the military intervened once again in 1976, but this time ruled directly until 1983, when it fell into disrepute in the aftermath of its failure in the Falkland Islands (Islas Malvinas) war with Great Britain in 1982. It was during this period that the military conducted the so-called "Dirty War" against leftists, guerrillas, and their sympathizers, and thousands of Argentines "disappeared." In 1983, Argentina returned to civilian democratic rule with the election of Raul Alfonsin of the moderate Radical Civic Union (UCR). Alfonsin was widely credited with restoring democratic institutions, but economic conditions during his tenure were chaotic, with hyperinflation and considerable labor unrest. As a result, Alfonsin left office six months before his six-year term ended, letting the winner of the 1989 election, Carlos Menem of the Justicialist Party (PJ, or the Peronist Party), take office early. Menem transformed Argentina from a state-dominated protectionist economy to one committed to free market principles and open to trade. Most state enterprises were privatized; hyperinflation was eliminated; and the economy was opened up to foreign trade and investment. In 1991, under the direction of Minister of Economy Domingo Cavallo, the government pegged the Argentine peso to the U.S. dollar and limited the printing of pesos to the extent that they were backed by U.S. dollars, a policy which helped keep inflation in check, but as is now known, became a major factor in Argentina's recent financial turmoil. (The dollar peg led to an overvaluation of the peso, and continued overspending led to large increases in external debt.) What made Menem's transformation of Argentina even more extraordinary was that he broke with the traditional Peronist protectionist policies favorable to the working-class and labor. Yet increasing corruption and high unemployment at the end of Menem's second term were factors that led to the defeat of his party in the October 1999 elections. Fernando de la Rua won the October 1999 presidential race as the candidate of a coalition known as the Alliance for Work, Justice, and Education, that brought together de la Rua's moderate Radical Civic Union (UCR) and the leftist Front for a Country in Solidarity (Frepaso). Although there was initial optimism when de la Rua took office in December 1999, that optimism had faded by the end of 2000 because of doubts about the government's ability to bring about economic recovery and because of corruption in the administration. While the government negotiated several financial arrangements with the IMF in 2000 and 2001, it was unable to fulfill IMF-imposed conditions relating to spending cuts. The IMF ultimately declined further financial support in December 2001, because Argentina could not produce a balanced budget. Argentines began rapidly withdrawing dollars from banks until the government limited withdrawals to $1,000 per month. The denial of access to bank funds, combined with already high poverty and unemployment rates after four years of recession, sparked widespread opposition to the government. As confidence in the government evaporated, widespread demonstrations erupted around the country, with thousands calling for the President's resignation. Protests turned violent with rioters battling police with stones and bottles; 27 people were killed in the protests and hundreds were injured. Some blamed riot police for overreacting to peaceful demonstrations. As a result of the violent protests, President de la Rua fled the presidential palace and resigned on December 20, 2001, paving the way for a series of interim presidents from the Peronist party. Peronist Senator Eduardo Duhalde ultimately became president on January 1, 2002, with a mandate from Congress to serve out the remainder of de la Rua's term. Duhalde, who had been Vice President under Menem from 1989-1991, Governor of the Buenos Aires province, and the PJ's 1999 presidential candidate, was one of the most well-known and powerful Peronist leaders. President Duhalde faced daunting political and economic challenges when he assumed office, most significantly the ability to quell social unrest associated with the country's financial instability. Protests against banks and politicians continued in the first half of 2002, but the widespread social violence of December 2001 was not repeated, and the Duhalde government survived. Duhalde initially promised such populist measures as increasing the state's role in the economy and protecting local industries, but he did not pursue a protectionist economic model. In the end, the Argentine economy stabilized under the Duhalde government. As part of his economic plan, Duhalde abandoned the Argentine currency's one-to-one peg to the U.S. dollar that had been in place since 1991 and ultimately adopted a unified floating exchange rate in February 2002. While the Duhalde government was unable to secure IMF financing in 2002 because of lack of progress on key fiscal and other structural reforms, it did secure a seven-month IMF arrangement in January 2003, valued at almost $3 billion. The Duhalde government was also able to clear Argentina's arrears with the World Bank and the Inter-American Development Bank, which allowed new loans in early 2003 to finance social safety net programs in order to reduce the impact of the economic crisis on the poor. Provincial governor Néstor Kirchner, a center-left Peronist, was inaugurated to a four-year term as president on May 25, 2003. Kirchner had emerged from the crowded 19-candidate first presidential election round held April 27 with 22% of the vote. Former President Carlos Menem, a center-right Peronist, topped the field with 24.36% of the vote, and the two candidates were scheduled to compete in a second round on May 18. But when it became apparent that Kirchner was forecast to win with nearly 70% of the vote, Menem pulled out of the race. During the campaign, Menem had advocated a neo-liberal free-market strategy to resolve Argentina's economic problems, including adoption of the U.S. dollar and increased economic linkages with the United States. In contrast, Kirchner advocated a continuation of Duhalde's economic policies and pledged to keep on the current Minister of Economy, Roberto Lavagna, viewed as the man behind the country's recent economic recovery. He attacked Menem's neo-liberal rhetoric and vowed to demand a reduction in debt and interest rates when negotiating with international creditors. Kirchner was viewed as somewhat of a political outsider, not associated with the corruption legacy of the past, and his candidacy attracted independents, an important factor given that traditional politicians had been discredited. President Kirchner's bold policy moves in the areas of human rights, institutional reform, and economic policy have helped restore Argentines' faith in government. He has attacked corruption in the federal police force and in Argentina's Supreme Court, which had been stacked with the supporters of former President Menem. Upon taking office, President Kirchner purged the military's top officers and vowed to prosecute current and retired military officials responsible for human rights violations conducted during the last era of military rule. At a dedication of a Museum of Memory commemorating the thousands of Argentines killed in the so-called "Dirty War," Kirchner asked "for forgiveness on behalf of the state for the shame of having remained silent about these atrocities during 20 years of democracy." He strongly supported the Supreme Court's June 2005 overturning of two amnesty laws from the 1980s that had blocked prosecution for killings under military rule. The action opened the door for trials of former military and police officials. In August 2006, a former federal police official was sentenced to 25 years in prison in the first trial since the Supreme Court's action, and in September 2006, the former police commissioner of Buenos Aires, Miguel Etchecolatz, was sentenced to life in prison. A key witness in the Etchecolatz case, Jorge Julio Lopez, disappeared after his testimony, provoking widespread concerns about a potential return of death squads intended to intimidate witnesses in future human rights trials. President Kirchner has called for Argentines to stay on alert so that the past is not repeated. In the economic arena, the Kirchner government has overseen a strong revival of the Argentine economy, with economic growth rates of 8.8% in 2003, 9% in 2004, 9.2% in 2005, and an estimated growth rate of 7.8% in 2006. Unemployment decreased from a high of about 24% in 2002 to about 11% in early 2006. In June 2005, the Kirchner government was successful in restructuring more than $100 billion in defaulted bond debt at about 34 cents on the dollar, saving the country more than $67 billion in the largest debt-reduction ever achieved by a developing country. Although Argentina's macroeconomic recovery has been impressive, many poor and middle-class Argentines have yet to see major improvements in living standards. Although poverty rates have declined over the past three years, about 34% of the population was still estimated to be in poverty in 2005, with almost 12% of the population living in extreme poverty. The Kirchner government also faces the challenges of curbing inflation, which is forecast to average 11% in 2006, while at the same time maintaining strong economic growth. Argentina's relations with the IMF under the Kirchner government have been contentious at times. In September 2003, after months of tough negotiations, Argentina reached a three-year stand-by agreement that provided a credit line of about $12.5 billion. Although IMF accords are not normally politically popular, the accord was widely praised in Argentina as an agreement with realistic fiscal targets that would enable Argentina to deal with such issues as employment and social equity. Argentina suspended its IMF loan program in August 2004 because of IMF pressure on completion of debt negotiations with bondholders and on Argentine progress in implementing key economic reforms. In January 2006, Argentina ultimately chose to repay its $9.5 million debt owed to the IMF in order to give the government autonomy on economic policy. Although the move was politically popular in Argentina, some critics argue that it would have been wiser to pay down other more expensive debt or to use the money on infrastructure or social spending. President Kirchner remains widely popular. For many observers, the October 2005 legislative elections served as a referendum on the Kirchner government and demonstrated continued strong support. One-third of the Senate and one-half of the Chamber of Deputies were contested in the elections. Kirchner emerged from the elections with his supporters having a majority of 40 seats in the 72-member Senate and 108 seats in the 257-member Chamber of Deputies, including a number of pro-Kirchner supporters from parties other than the PJ. The contest was significant because it asserted Kirchner's dominance over the Peronist party faction led by former President Duhalde. Most analysts believe that Kirchner would likely win the October 2007 presidential election if he chooses to run. U.S.-Argentine relations have been strong since the country's return to democracy in 1983 and were especially close during the Menem presidency. U.S. officials commend Argentina's contributions to peacekeeping operations worldwide, including a contribution to the current U.N. peacekeeping mission in Haiti. Because of its military contributions, the United States designated Argentina as a major non-NATO ally in 1997, a status that gives Argentina access to grants of surplus military hardware. Although U.S.-Argentine relations are close, at times there have been irritants in the bilateral relationship. The tough U.S. approach toward Argentina during its political and financial crisis in 2001-2002 caused some friction in the relationship. This turned around to some extent in 2003 when the United States supported Argentina in its negotiations with the IMF. In terms of trade, the United States exported $4.1 billion in goods to Argentina in 2005 (with machinery, organic chemicals, and electrical machinery exports topping the list) and imported $4.6 billion in goods, almost half consisting of oil imports. In 2004, the United States Trade Representative (USTR) placed Argentina on the Special 301 Priority Watch list regarding intellectual property rights protection because of serious concerns over the lack of adequate protection for copyrights and patents. Although the country made some improvements to its international property protection, USTR kept Argentina on the Priority Watch List for 2005 and 2006 because of continued problems with patent protection and copyright piracy. U.S. officials have highlighted concerns about the tri-border area (TBA) of Argentina, Brazil, and Paraguay because of activities of the radical Lebanon-based Hezbollah (Party of God) and the Sunni Muslim Palestinian group Hamas (Islamic Resistence Movement). The TBA has long been used for arms and drug trafficking, contraband smuggling, document and currency fraud, money laundering, and the manufacture and movement of pirated goods. The State Department's 2005 annual report on terrorism (issued in April 2006) maintains that the United States remains concerned that Hezbollah and Hamas were raising funds among the sizable Muslim communities in the region but stated that there was no corroborated information that these or other Islamic extremist groups had an operational presence in the area. U.S. officials in the past have lauded engagement with Argentina on counter-terrorism issues, including efforts to crack down on Middle East fund-raising activities in the TBA. In September 2006, however, a U.S. Treasury Department official maintained that Argentina could risk international financial isolation if it did not take action to criminalize terrorist financing. Congress has expressed concern regarding Argentina's investigation into the July 1994 bombing in Buenos Aires of the Argentine-Israeli Mutual Association (AMIA) that killed 85 people. In the 108 th Congress, both houses approved similar resolutions ( H.Con.Res. 469 and S.Con.Res. 126 ) in July 2004, that urged Argentina to provide resources to investigate all areas of the AMIA case. Allegations have linked Hezbollah to that bombing as well as to a 1992 bombing of the Israeli Embassy in Buenos Aires that killed 30 people. In September 2004, all 22 Argentine defendants charged in the 1994 bombing were acquitted by a three-judge panel that faulted the investigation of the original judge (the judge was ultimately removed from office for bribery in August 2005). Despite the acquittal, an Argentine court reconfirmed the validity of international arrest warrants for 12 Iranian nationals and one Lebanese official believed to head Hezbollah's terrorist wing. (Interpol suspended international wanted notices, or Red Notices, for the 12 Iranians, in October 2004, and cancelled the notices in September 2005, maintaining that new arrest warrants were needed.) A new Argentine investigation of the AMIA case began in September 2004, and in November 2005, the prosecutor named a Lebanese militant from Hezbollah as the suicide bomber in the AMIA case. In June 2006, the House approved H.Con.Res. 338 (Ros-Lehtinen), which "recognizes the potential threat that sympathizers and financiers of Islamist terrorist organizations that operate in the Western Hemisphere pose to the United States, our allies, and interests." The resolution also encourages the President to direct the U.S. representatives to the Organization of American States to seek support for the creation of a special task force to assist governments in investigating and combating the proliferation of Islamist terrorist organizations in the region. | Argentina's restructuring of over $100 billion in defaulted bond debt in June 2005 demonstrated the country's emergence from its 2001-2002 economic crisis that had caused severe stress on the political system. Current President Néstor Kirchner, elected in 2003, has made bold policy moves in the areas of human rights, institutional reform, and economic policy that have helped restore Argentines' faith in democracy. The October 2005 legislative elections demonstrated strong support for President Kirchner, whose popularity at this juncture bodes well for his re-election if he chooses to run in the October 2007 presidential election. Economic growth has rebounded since 2003, and in January 2006, Argentina paid off its $9.5 billion debt to the International Monetary Fund. Looking ahead, the government faces such challenges as reducing poverty and controlling inflation while maintaining strong economic growth. Issues of concern to Congress include continued cooperation with Argentina on counter-terrorism issues and progress in Argentina's investigation of the 1994 Argentine-Israeli Mutual Association bombing. For additional information, see CRS Report RL32637, Argentina ' s Sovereign Debt Restructuring , by [author name scrubbed] (pdf). |
The September 11 attacks illustrated the vulnerabilities in the visa process when it became known that all 19 of the terrorist hijackers had been issued visas to enter the United States. Before the attacks, the State Department’s visa operations focused primarily on screening applicants to determine whether they intended to work or reside illegally in the United States. In deciding on who should receive a visa, consular officers relied on the State Department’s consular “lookout” system, a name check system that incorporates information from many agencies, as the primary basis for identifying potential terrorists. Consular officers were encouraged to facilitate legitimate travel and, at some posts we visited, faced pressure to issue visas. The State Department gave overseas consular sections substantial discretion in determining the level of scrutiny applied to visa applications and encouraged streamlined procedures to provide customer service and deal with a large workload. As a result, according to State Department officials and documents, consular sections worldwide adopted practices that reduced the review time for visa applications. For example, some posts decided not to interview applicants who appeared likely to return to their country at the end of their allotted time in the United States. Since the terrorist attacks, the U.S. government has introduced some changes to strengthen the visa process. For example, the State Department has, with the help of other agencies, almost doubled the number of names and the amount of information in the lookout system. Further, the Department began seeking new or additional interagency clearances on selected applicants to screen out terrorists, although these checks were not always completed by other U.S. agencies in a thorough or timely manner. We also observed that consular officers at some of the posts we visited were spending more time reviewing visa applications and interviewing applicants; they were able to do so, at least temporarily, because the number of visa applications decreased dramatically after September 11. While these actions have strengthened the visa process, our work in 2002 showed that there were widely divergent practices and procedures among and within overseas posts regarding (1) the authority of consular officers to deny questionable applicants a visa, (2) the role of the visa process in ensuring national security, and (3) the types of changes in posts’ visa policies and procedures that are appropriate given the need for heightened border security. Also, the Departments of State and Justice disagreed on the evidence needed to deny a visa on terrorism grounds. Most consular officers at the posts we visited stated that more comprehensive guidance and training would help them use the visa process as an antiterrorism tool to detect questionable applicants. In July 2002, the Secretary of State acknowledged that the visa process needed to be strengthened and indicated that the State Department is working to identify areas for improvement. In addition, the State Department has stressed that it must have the best interagency information available on persons who are potential security risks in order to make good visa decisions. The additional data received from the intelligence and law enforcement community has increased State’s access to information for use in the visa adjudication process. In addition, State indicated that it will work with Homeland Security to establish the systems and procedures that will ensure seamless sharing of information in the future. We also found that human capital limitations are a concern, as some consular sections may need more staff if the number of visa applicants returns to pre-September 11 levels or if State continues to institute new security checks for visa applicants. At some posts the demand for visas combined with increased workload per visa applicant still exceeded available staff, as evidenced by the waiting time for a visa appointment and in overtime of consular staff. Moreover, several posts we visited reported that they could manage their existing workload with current staffing but would need more staff if they faced an increase in either security clearance procedures or visa applications. In our October 2002 report, we concluded that the visa process could be an important tool to keep potential terrorists from entering the United States but that weaknesses limited its effectiveness as an antiterrorism tool. The State Department needed to improve implementation of the visa process to increase its effectiveness and consistency among posts. To strengthen the visa process as an antiterrorism tool, we recommended that the Secretary of State, in consultation with appropriate agencies, establish clear policy on addressing national security concerns through the visa process that is balanced with the desire to facilitate legitimate travel, provide timely customer service, and manage workloads; develop comprehensive, risk-based guidelines and standards on how consular affairs should use the visa process as a screen against potential terrorists; reassess staffing for visa operations in light of the current and anticipated number of visa applications and, if appropriate, request additional human resources to ensure that consular sections have adequate staff with necessary skills; and provide consular training courses to improve interview techniques, recognize fraudulent documents, understand terrorism trends, and better use the name check system. To address visa issues requiring coordination and actions across several agencies, we recommended that the Department of Homeland Security coordinate with appropriate agencies to establish governmentwide guidelines on the level of evidence needed to deny a visa on terrorism grounds under provisions of the Immigration and Nationality Act; reassess interagency headquarters’ security checks on visa applicants to verify that all the checks are necessary and promptly conducted, and provide clear guidance to overseas posts and headquarters agencies on their roles in conducting these checks; consider reassessing, on an interagency basis, visas issued before the implementation of the new security checks; reexamine visa operations on a regular basis to ensure that the operations effectively contribute to the overall national strategy for ensure that law enforcement and intelligence agencies promptly provide information to the State Department on persons who may pose a security risk and, therefore, should not receive visas. In its response to our recommendations, the Department of State noted that it has acted on or is currently acting on some of the issues we reported and continues to reexamine its visa process. Moreover, in January 2003, the Assistant Secretary for Consular Affairs reported that State plans to use our recommendations as a roadmap for improvements within the Bureau of Consular Affairs and in consular sections around the world. State has also indicated that it is currently undertaking a number of initiatives to review visa policies, staffing, and training needs. Furthermore, State said it is looking at refining various screening programs and will coordinate with other agencies to reassess interagency headquarters’ security checks. In our recent work on visa revocations, we again found weaknesses caused by the lack of comprehensive policies and coordination between agencies. The visa revocation process can be an important tool to prevent potential terrorists from entering the United States. Ideally, information on suspected terrorists would reach the Department of State before it decides to issue a visa; however, there will always be some cases in which the information arrives after the visa has been issued. Revoking a visa can mitigate this problem, but only if State notifies the appropriate agencies and if those agencies take appropriate actions to deny entry or investigate persons with a revoked visa. In our June 2003 report, we identified the policies and procedures of several agencies that govern the visa revocation process and determined the effectiveness of the process. We focused on all 240 visas that State revoked for terrorism concerns from September 11, 2001, to December 31, 2002. Our analysis indicated that the U.S. government has no specific written policy on the use of visa revocations as an antiterrorism tool and no written procedures to guide State in notifying relevant agencies of visas that have been revoked on terrorism grounds. State and INS have written procedures that guide some types of visa revocations; however, neither they nor the FBI has written internal procedures for notifying appropriate personnel to take action on visas revoked by the State Department. State and INS officials could articulate their informal policies and procedures for how and what purpose their agencies have used the process to keep terrorists out of the United States, but neither they nor FBI officials had specific policies or procedures that covered investigating, locating, or taking appropriate action in cases where the visa holder had already entered the country. The lack of formal, written policies and procedures may have contributed to systemic weaknesses in the visa revocation process that increase the probability of a suspected terrorist entering or remaining in the United States. At the time of visa revocation, State should notify its consular officers at overseas posts, the Department of Homeland Security, and the FBI. State would have to provide notice of revocation, along with supporting evidence to the appropriate units within Homeland Security and the FBI, which would allow them to take appropriate action. In our review of the 240 visa revocations, we found that (1) appropriate units within INS and the FBI did not always receive timely notification of the revocations; (2) lookouts were not consistently posted to the agencies’ watch lists; (3) 30 individuals whose visas were revoked on terrorism grounds entered the United States and may still remain in the country; (4) INS investigators were not usually notified of individuals with revoked visas who had entered the United States and therefore did not open investigations on them; and (5) the FBI did not investigate individuals with revoked visas unless these individuals were also in TIPOFF. For instance: In a number of cases, notification between State and the appropriate units within INS did not take place or was not completed in a timely manner. For example, INS officials said they did not receive any notice of the revocations from State in 43 of the 240 cases. In another 47 cases, the INS Lookout Unit received the revocation notice only via a cable, which took, on average, 12 days to reach the Unit. In cases in which the INS Lookout Unit had received notification, it generally posted information on these revocations in its lookout database within 1 day of receiving the notice. In cases where it was not notified, it could not post information on these individuals in its lookout database, which precluded INS inspectors at ports of entry from knowing that these individuals had had their visas revoked. Moreover, the State Department neglected to enter the revocation action for 64 of the 240 cases into its own watch list. GAO’s analysis of INS arrival and departure data indicates that 29 individuals entered the United States before their visas were revoked and may still remain in the country. These data also show that INS inspectors admitted at least four other people after the visa revocation, one of whom may still remain in the country. However, in testimony on June 18, 2003, the FBI said that none of these 30 individuals posed a terrorist threat since they were not in TIPOFF, a State-operated interagency terrorist watch list that FBI’s Foreign Terrorist Tracking Task Force monitors. State Department officials told us during our review that State relied on sources of information in addition to TIPOFF in making visa revocation decisions. INS inspectors prevented at least 14 others from entering the country because the INS watch list included information on the revocation action or had another lookout on them. INS investigators said they did not open cases on these individuals with revoked visas who had entered the United States because their unit had not been notified that State had revoked visas because of terrorism concerns and that these persons had entered the country. They added that, in the 10 cases that were referred to them, they conducted a full investigation of possible immigration violations. INS officials said that it would be challenging to remove individuals with revoked visas who had entered the United States unless they were in violation of their immigration status. Homeland Security officials said that the issue of whether a visa revocation, after an individual is admitted on that visa, has the effect of rendering the individuals out-of-status is unresolved legally. FBI officials told us they were not concerned about individuals whose visas were revoked because of terrorism concerns unless the individuals’ names were in TIPOFF. They said that they had a system in place to monitor individuals in TIPOFF who enter the country but that they would not investigate individuals who were not in TIPOFF based solely on the revocation notice from State. FBI’s position indicates that FBI is not taking into account all sources of information that State uses in determining if a person may pose a terrorism threat. We concluded that the visa process could be an important tool to keep potential terrorists from entering the United States. However, there are currently major gaps in the notification and investigation processes. One reason for this is that there are no comprehensive written policies and procedures on how notification of a visa revocation should take place and what agencies should do when they are notified. As a result, there is heightened risk that persons who State believed should not have been issued a visa because of terrorism concerns could enter the country with revoked visas or be allowed to remain after their visas are revoked without undergoing investigation or monitoring. To strengthen the visa revocation process as an antiterrorism tool, we recommended that the Secretary of Homeland Security, in conjunction with the Secretary of State and the Attorney General develop specific policies and procedures for the interagency visa revocation process to ensure that notification of visa revocations for suspected terrorists and relevant supporting information is transmitted from State to immigration and law enforcement agencies and their respective inspection and investigation units in a timely manner; develop a specific policy on actions that immigration and law enforcement agencies should take to investigate and locate individuals whose visas have been revoked for terrorism concerns and who remain in the United States after revocation; and determine if persons with visas revoked on terrorism grounds are in the United States and, if so, whether they pose a security threat. In response to our recommendations, the Department of State testified that the Bureau of Consular Affairs is engaged in an effort to formalize standard operating procedures. The Department of Homeland Security also remarked that it was working to better standardize its procedures. The FBI determined that 47 of the 240 persons with revoked visas were in TIPOFF and therefore could pose a terrorism threat but that it had no indication that any of these individuals were in the country. The Department of State has recently issued guidance to its posts about using the visa process as an antiterrorism tool. In May 2003, the Secretary of State announced that, by August 1, 2003, with a few exceptions, all foreign individuals seeking to visit the United States would be interviewed prior to receiving a visa. The purpose of this guidance is to tighten the visa process to protect U.S. security and to prepare for the eventual fingerprinting of applicants that State must undertake to meet the legislated mandate to include a biometric identifier with issued visas. To comply with the new guidance, some posts may have to make substantial changes in how they handle nonimmigrant applications. State acknowledges that posts may find that personnel or facility resources are not adequate to handle the additional number of interviews. Even though State expects interview backlogs, the Department has indicated that posts are to implement the interview requirement with existing resources. It is not certain what impact the new policy will have on visa issuance. However, education, business, and government officials have expressed concern that it was already taking too long to issue visas and that without a commensurate increase in resources to accommodate the heavier workload that may result from the new requirement, there could be serious delays for those seeking to visit the United States. In March 2003, the House Committee on Science held a hearing on “Dealing with Foreign Students and Scholars in the Age of Terrorism: Visa Backlogs and Tracking Systems.” In June 2003, the House Committee on Small Business held a hearing on “The Visa Approval Backlog and its Impact on American Small Business. “ In both hearings, higher education and business leaders and agency officials testified on the negative impacts of delays in issuing visas. The testimonies also highlighted the difficulties of balancing national security interests with the desire to facilitate travel. At the request of the House Committee on Science, we are currently examining the amount of time taken to adjudicate visa applications from foreign science students and scholars. As part of this work, we will be looking at how the new interview policy will affect the process. Before I conclude my statement, I would like to raise some questions that the subcommittee may want to consider in its oversight role: Have the Departments of State, Homeland Security, and Justice reached agreement on how best to communicate information on individuals who should not be issued visas and on individuals whose visas have been revoked? Have the Departments of State, Homeland Security, and Justice agreed on the level of evidence needed to deny and revoke visas? Does the Department of State have adequate number of trained staff for visa processing, especially if the number of visa applicants or security checks increase? Do the Departments of Homeland Security and Justice agree on whether persons who are in the country and have visas that have been revoked on terrorism concerns should be investigated and, if so, by which agency? Mr. Chairman, I would like to reiterate our two overarching areas of concern for U.S. visa policy. First, the U.S. government needs to have clear, comprehensive policies governing U.S. visa processes and procedures so that all agencies involved agree on the level of security screening for foreign nationals both at our consulates abroad and at ports of entry. These policies should balance the need for national security with the desire to facilitate legitimate travel to the United States. The Departments of State and Homeland Security should coordinate to establish governmentwide guidelines on the level of evidence needed to deny a visa. There should also be a specific policy for the interagency visa revocation process, including the actions that immigration and law enforcement agencies should take to investigate and locate individuals with revoked visas who have entered the country. The second area of concern is the continued need for coordination and information sharing among agencies. If our intelligence or law enforcement community is concerned that an individual poses a security risk, we have to make sure that this information is communicated to the State Department so that consular officers can deny and, if need be, revoke visas in a timely manner. Similarly, when State revokes a visa for terrorism concerns, we have to make sure that full information on the revocation is communicated to immigration and law enforcement agencies. Mr. Chairman, this concludes my statement. I would be pleased to answer any questions that you or members of the subcommittee may have. For future contacts regarding this testimony, please call Jess Ford at (202) 512-4128. Individuals making key contributions to this testimony included John Brummet, Andrea Miller, Kate Brentzel, Janey Cohen, Lynn Cothern, and Suzanne Dove. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. | Since September 11, 2001, visa operations have played an increasingly important role in ensuring the national security of the United States. The Departments of State, Homeland Security, and Justice, as well as other agencies, are involved in the visa process. Each plays an important role in making security decisions so that potential terrorists do not enter the country. In two GAO reports, we assessed the effectiveness of the visa process as an antiterrorism tool. Our analysis of the visa process shows that the Departments of State, Homeland Security, and Justice could more effectively manage the visa process if they had clear and comprehensive policies and procedures and increased agency coordination and information sharing. In our October 2002 report on the visa process as an antiterrorism tool, we found that State did not provide clear policies on how consular officers should balance national security concerns with the desire to facilitate legitimate travel when issuing visas; and State and Justice disagreed on the evidence needed to deny a visa on terrorism grounds. In our June 2003 report, we found that State had revoked visas for terrorism concerns but that the revocation process was not being used aggressively to alert homeland security and law enforcement agencies that individuals who entered the country before their visas were revoked might be security risks; and the process broke down when information on revocations was not being shared between State and appropriate immigration and law enforcement officials. These weaknesses diminish the effectiveness of the visa process in keeping potential terrorists out of the United States. |
Hardware
The Nook Color / Tablet scored plenty of points for originality in the industrial design department, polarizing users in the process. The long, plastic-shelled body did a fine job of standing apart from the push toward all-screen slates that has gripped the vast majority of the industry over the past several years. That's thanks in no small part to a carabiner that wouldn't have looked altogether out of place strapped to your trusty hiking backpack. Devotees of that old design will find some solace in the slimmed-down and souped-up arms of the HD+. The HD, on the other hand, wouldn't seem too out of place hanging out at the open bar of a Simple Touch family reunion, with a stubby body, rounded corners and slightly concave back, created by Robert Brunner, the former Apple designer who breathed life in B&N's popular reader series.
Function over form is what Barnes & Noble is selling this time out. That's not to say the Nook HD is a particularly bad-looking device, but as with the Simple Touches, there's little doubt that the company sacrificed a bit of sleekness in favor of building a slate around the human hand, a noble enough pursuit so far as tablet industrial design is concerned. As with B&N's other recent products, the Nook HD's got bezel to spare -- a plastic affair that shields the sides of the screen from both dings and thumb prints, making sure those greasy digits don't smudge the pristine HD display at the center of the device. Next to this, you'll find a black display bezel that's wider on the top and bottom of the device.
The area's a bit of a no man's land along the top -- there's no camera to be seen on the Nook's front or rear. It's a sacrifice the company seemingly made in the name of keeping costs low -- one of the few fronts the company seems willing to admit it got beat by the Kindle Fire HD. While most consumers with money to spend on a new tablet are likely not lacking on the devices-with-cameras front, in late-2012 at least one built-in webcam seems like a pretty baseline feature. That's particularly true for an easy-to-hold, high-def product that might have made a nice little Skype device. On the bottom black bezel, you'll find the Nook's signature lowercase "n" physical home button. It's the one truly conspicuous input on the device, placed there, no doubt, for aesthetic consistency and, B&N tells us, so that you'll never forget which way is up -- not that such orientation makes a heck of a lot of difference when the accelerometer is hard at work.
A small seam splits the front plastic bezel from another, slightly shinier piece of plastic on the side of tablet. This bit houses the Nook's other buttons. You'll find two volume buttons on the right and power on the left (give the screen a second or so to turn on after clicking the power button). It's not quite as intuitive as having a power button on top, but let's face it; the dream of relatively uniform button placement went out the window years ago. Up top, you've got a headphone jack and small mic hole that allows you to, among other things utilize the company's great Read and Record feature for kids' books.
On the bottom, there's a proprietary charging jack. When asked why it went that route vs. the nearly ubiquitous micro-USB (the choice on the tablet's e-reader siblings), the company claims that it's, in part, due to the ability to speed up charging. Given how many micro-USB cables we've got floating around, that would have been a nice choice -- and hey, it's good enough for the Fire HD and Nexus 7, right? Barnes & Noble's quick to point out, however, that, unlike the Fire, the price of the Nook includes the necessary (again, proprietary) cable, along with a wall adapter. To the charging port's right, a small yellow light turns green when the battery's full. To the left of this port is a microSD door that'll let you expand the device's 8GB or 16GB by up to 64GB, always a welcome feature on Nook devices, particularly in the case of a tablet, where, unlike e-readers, you'll probably actually be storing some HD multimedia files. It's also a boon for those who found past Nook tablet devices such a delight to root.
The rear of the device has that familiar soft-touch feel, which really feels nice in-hand, and offers a bit of traction for those sweaty palm you get while using the device on the elliptical machine. As with the Simple Touch devices, the rear indents a bit, providing a slot for your fingers to rest in while reading. However, it's far less pronounced here and honestly doesn't really serve all that much of a purpose. In the center of all of this, as per usual, is a large, indented lower case "n," should you ever forget which tablet you bought when it's faced screen-side down.
Along the bottom of the rear, two small speaker grids flank a small "nook" logo and all of the requisite FCC information (interestingly, the pricier Nook HD+ only has a single speaker ). (Update: Barnes & Noble contacted us to clarify that the HD+ has two speakers, they're just both behind a single grille.) We prefer the spread-out placement of the stereo speakers on the Fire HD, which make it a bit harder to accidentally muffle the sound while holding the tablet during a movie -- not that the sound on the Nook HD is all that much to write home about, SRS TruMedia or no. It doesn't really get all that loud. For most occasions, we suspect we'll be relying on that headphone jack up top for our multimedia needs.
On a whole, Barnes & Noble's done a nice job here on the industrial design front, creating a tablet that's easily held, thanks in part to a slim width (7.7 x 5 x 0.43 inches to the Fire's 7.6 x 5.4 x 0.4) and light weight (11.1 ounces to the Fire's 13.9). The 7-inch 1,440 x 900 IPS display really does pop, offering up great viewing angles and the sort of high-definition playback it would have been hard to imagine on a $200 tablet not all that long ago. The Nook also scored a solid 1,271ms score in our SunSpider testing. The plastic bezel on the front provides a nice spot on which to deposit one's thumb and, like the Simple Touch, provides for a design that stands apart from the army of lookalike tablets that dominate the market.
Software
The Nook HD is running, hold onto your hats, Ice Cream Sandwich under the hood. Barnes & Noble is far less cagey about Android versions than Amazon. That's perhaps because, while it's a highly skinned version, it's far less so than the one you'll find on the Kindle Fire HD, which essentially secures that tablet's place as a content delivery device. Click the power button and you'll see a lock screen welcoming you back, along with the date and time. In the center is a lock icon surrounded by faces representing different user accounts. Drag yours to the center and you'll open up access to your content. When switching to a different user, you'll get a split second view of the content on the previous user's desktop, a small bug the company will hopefully fix with the next upgrade.
Barnes & Noble's calling skin "paper-like" (not to be confused, of course, with Paperwhite), a dull name, we'll admit, but it certainly gets to the heart of the matter. The company's gone a way toward providing a minimalist experience, not overcrowding things with flashy features that are unnecessary to core usage. At top is a black toolbar letting you know whose Nook you're looking at. There are notifications in the center that you can tap to read (rather than the customary notification pull-down), the time, WiFi indicator, batter listing and settings icon. Tapping Settings lets you adjust brightness, switch WiFi networks, enable airplane mode and toggle lock screen rotation.
By default, the desktop is mostly bare, with visible fibers that really drive that whole "paper-like" thing home. At top, you'll see the date, your account icon and another little welcome message custom-fit to the time of day. Below is the Daily shelf, a small carousel featuring quick, rotating access to your most recent content -- movies, newspapers, books, apps, comics, et al. It's not unlike what you get on the Kindle Fire HD, but it's far less central here. Below this is an open area onto which you can drag content and apps. There are five desktop pages in all, so you've got plenty of area to play around with. Toward the bottom of the page are links to your library, apps, the web browser, email and the Nook store. Down farther still are a search bar and a button that gives you quick access to all your open apps.
Barnes & Noble introduced Your Nook Today for this round of tablets. Clicking this will drop the page down with a cool little animation that breaks the sticker. The first time you launch the feature, the page will take a bit of time to populate -- especially on a lackluster connection. At the top, you'll get the current local weather, along with the current highs and lows, courtesy of AccuWeather.com (a hugely desired feature, according to B&N). The page also features reading recommendations, based on your habits and a quick "Three Minute Read," for the on-the-go person who wants to feel they've accomplished something in an exceedingly short space of time.
The library page offers up all of your content broken down by category -- books (including comics), magazines, movies and TV, apps, kids (including all content from all mediums that fit in the category), catalogs, newspapers and various methods for refining your own content, live shelves, scrapbooks and files. Content in the different categories is organized into rows that can be advanced with a swipe. Clicking on the header will bring you to a page that features all of that content laid out on grid. As with the homepage, the layout features a lot of white space -- a defining characteristic of the UI, which, compared to the vanilla Jellybean offered up on the Nexus 7, feels a little half-baked. Though for those looking for a simple tablet that doesn't overwhelm the senses, there's perhaps something to be said for Barnes & Noble's approach here. The aesthetic carries over to the Apps page. The icons certainly pop when placed on the dull white background, surrounded by so much white space.
Browser
Barnes & Noble's offered up a fairly straightforward browsing experience this time out -- precisely what one would look for in a starter tablet like this. At the top, you've got tabs which can be added to with the click of a plus sign. Below this, you'll find the navigation bar and buttons, and a bookmarks icon that will bring you to a list of browser thumbnails on a plain background. Along the bottom are icons for sharing (via email and Evernote), searching and the ArticleView, which adheres to the device's central reading focus by serving up web stories in a more magazine-like format. Clicking the top right lets you add a bookmark to the page you're currently reading and brings up access to further reading settings.
Reading
Reading is still the essence of the Nook line, and in a sense, like the Nook Color before it, the HD can be regarded as a reading device with some extra tricks up its sleeves. After all, the company clearly designed the form factor around the reading experience. Accordingly, in press materials for the company, reading is regularly mentioned ahead of things like movies and apps, in spite of the push toward a higher-definition display. Not much has changed on the prose-reading front. You get a page largely monopolized by text, save for the book title on the top and your progress on the bottom. Page turns default to a standard swipe, though fiddling with the settings make it possible to add a more book-like page curl animation that features some intentional image bleed from the page before it.
Click the progress at the bottom and you get a slider that lets you flip through the book. You can also get information on the book (cover, reviews, recommendations), word and phrase search, sharing and format adjustments -- which offer up eight text sizes, six font styles and six page colors, among others.
More visual texts are where the Nook HD really shines. Magazines like Details really do look stunning on the HD display. And while the Nook HD+ offers up a better form factor for such reading, you can home in on text with a pinch. For a more straightforward reading experience, Barnes & Noble is offering up the same ArticleView you get in the browser. Click it and the images disappear, offering up a layout similar to the printer-friendly format offered up by many news sites.
Tap the bottom of the screen, and you get a carousel of article pages. Below that is a link to a grid layout that offers up the whole book laid out as thumbnails on a single page. You can also view the contents via a more traditional TOC. The whole experience is tied together with excellent transition animations, making for a smooth and seamless reading experience. For all the unfinished feeling one gets navigating through the UI, it's clear that B&N invested a lot in magazine reading this time out.
Comics, too, are a pleasure to read on the Nook HD. The colors really pop and enabling ZoomView Letterboxing makes it possible to read panel by panel, really the ideal way to enjoy sequential art on a tablet device. As with magazines, you can also view a carousel of pages on the bottom of the screen, along with textual and visual tables of contents.
Barnes & Noble added shopping catalogs to its list of reading options. The viewing options are quite similar to those of magazines, only these get pushed to you for free, because, well, their sole reason for existing is to sell you products. The images feature hotspots, which, when clicked, bring you to product pages where you can purchase products. They look great, sure, but in a world in which catalogs are still widely considered junk mail for most consumers, it's hard to imagine the feature serving as a major selling point for most users.
Kids' books, meanwhile, have long been something of a secret weapon in Barnes & Noble's tablet offerings. The company has worked closely with manufacturers to offer up an experience that really goes the extra mile to harness the multimedia capabilities of the devices, adding sound effects, animation and music. Opening up the book offers up three different experiences: Read By Myself, which offers up no narration, Read and Play, which features built-in narration and Read and Record, which lets parents record narration for their kids.
As with other texts, clicking the bottom of the screen offers up a carousel of pages from the book. All of this, coupled with the low price, relatively durable design, small form factor and user profiles make a compelling argument for the Nook HD as a strong device for families. The whole process is extremely simple, and once a profile has been created, it will be synced over to other Nook devices linked to the same account.
Profiles
As evidenced by the lock screen, Barnes & Noble is really pushing the profile feature this time out -- and it's not hard to see why. Families share tablets, particular inexpensive ones. But while you might not mind handing off a $200 tablet, you don't necessarily want to put all of your content into your kids' hands. You can set up to six profiles per device by clicking your user icon on the home screen. From here, it will give you the option to create a profile for an adult or child. You can change the profile image using built-in clip-art or pictures stored on the device and pick a gender (you can also opt for a non-gender-specific version). Filling in the age on the child account helps Barnes & Noble determine "age-appropriate content."
On the following page is a checklist for different content types you can let the children access, as well as rating levels for movies and TV shows. Once you've filled all this out and picked a few interests, the Nook will recommend free content to you.
Shop
The Nook Shop design is fairly straightforward, offering up a rotating carousel of featured content in the upper left, with a list of pages of different content (book, magazines, movies & TV, et al) to its right. Below this are further recommendations broken up by categories like "Passion for Fashion" and "Your Favorite Heroes" (comics). If you know what you're searching for, however, just skip straight down to the search field at the bottom of the page.
It should be pointed out that, like the Fire, the Nook's skinned UI means you're getting no access to the Google Play store. The company is instead opting to work with developers to create apps that better fit their device. And while B&N claims to have all the popular apps, there are some conspicuous absences here -- searching for Spotify, for example, will only offer up a copy of the $12 e-book, "Spotify for Dummies." Who knew such a thing existed -- and really, without access to the app, who would ever need such a thing?
Wrap-up
Barnes & Noble invested a lot in the hardware, and it shows. The Nook HD has a great little screen, snappy performance and industrial design that stands out from the competition without proving quite as polarizing as its predecessor. Most of all, it's built to be held, a fact that echoes the device's focus on the reading experience. That core functionality spills over onto the software side, making visually interesting magazines, comics and kids' books a pleasure to read. Priced (ad-free) at $199 for an 8GB model and $229 for 16GB, it's a great little piece of hardware for those looking for a reader that can also handle casual gaming and high-def videos. And the addition of profiles makes this a tempting proposition for families with children.
The "paper-like" UI, on the other hand, doesn't feel as if it got quite as much attention. It's stark and at times buggy (though the company promises that a fix is coming shortly), missing both the content focus of the Kindle Fire and the full functionality (and Google Play access) of the Jelly Bean-rocking Nexus 7. Also, the lack of a camera feels like a strange oversight. All said, however, the Nook HD is a fine little tablet for the price, though in a space where the Kindle and Nexus have been crowned champions, asking people to make the leap feels like a bit of a hard sell. ||||| The new Nook doesn't have the most features, but it's got a good screen in a featherweight package -- and no ads.
Barnes & Noble
Barnes & Noble‘s new Nook HD, which arrives in the retailer’s stores this Thursday, competes with Amazon’s Kindle Fire HD about as directly as it’s possible for one product to rival another.
They’re both $199 tablets with 7″ screens. They both use customized versions of Android to provide experiences that emphasize the consumption of content — books, magazines, video, apps and more — that you’ve purchased from the company that sold you the tablet. It’s the same basic idea from two different bookselling behemoths.
And yet, for all their similarities, the two tablets aren’t carbon copies. Even if a company decides to forsake most or all of its profit in hopes of making it up on later content sales, it’s impossible to sell a decent $199 tablet without making certain tradeoffs. And some of the decisions Barnes & Noble made are substantially different than Amazon’s.
For instance:
The Nook HD has a higher-resolution screen. It’s got 1440-by-900 pixels, a meaningful increase over the Kindle Fire HD’s 1280-by-800.
It’s narrower and lighter. The Nook HD’s curvy case (available in white and gray versions) is 5″ wide vs. the Fire HD’s 5.4″, a difference that sounds insignificant but makes for a more single-hand-friendly design. And at 11.1 oz., it’s enough lighter than the 13.9-oz. Fire HD that you notice the difference as you hold it up to read.
It doesn’t have a camera. Skype video calls via the front-facing camera are a major selling point for the Kindle Fire HD, but Barnes & Noble says that it doesn’t think most consumers care all that much about video calling.
The $199 model has 8GB of memory rather than the Fire HD’s 16GB. The skimpier capacity won’t matter if you’re just downloading books, but might be tight if you’re storing video and other memory-hungry content. But the Nook HD, unlike the Fire HD, has a MicroSD slot, letting you add more capacity by plugging in a card. (A 32GB MicroSD will run you around $20.) Or you can spring for the 16GB Nook HD, which is $229.
If you’re doing your price-comparison math down to the last nickel, take note that the Nook HD comes with an AC adapter; with the Fire HD, that’ll cost you an extra 10 bucks.
A bigger difference between the two tablets: The Nook HD’s low price isn’t subsidized with the ads and other in-your-face marketing Amazon uses to help cover its costs. With the Nook HD, there’s no equivalent of the Fire HD’s “special offers” screensaver — which you can remove for $15 — and the Barnes & Noble shopping experience is all concentrated in one section you can explore or ignore, rather than distributed throughout the interface as it is on the Fire HD. Overall, the interface has a more low-key, customizable, less hypercommercial feel.
The Kindle Fire HD has a feature called FreeTime, enabled in a recent software update, which lets parents create custom profiles for one or more kids, limiting the content they see to appropriate materials and setting maximum amounts of usage per day. The Nook HD’s Nook Profiles feature is roughly comparable; it doesn’t have the usage-limit option, but does let up to six family members of any age share the tablet, with everyone getting their own personalized content library.
Overall, though, the Fire HD has more features, including X-Ray, which annotates books and movies with information on their creators, characters and more, and Immersive Reading, which lets you read a Kindle e-book while listening to the Audible audiobook version. Barnes & Noble also doesn’t have a counterpart for Amazon’s $79/year Prime membership, which lets you stream a growing library of video and borrow books at no extra charge.
With 3 million e-books (including picture books for kids), almost 500 magazines and 44 newspapers, Barnes & Noble was already in solid shape when it came to reading materials. But while Amazon has been building its collection of movies and TV shows for years; Barnes & Noble is a newcomer to selling and renting video, having relied on Netflix and Hulu in its previous color tablets. It says it’s signed up Disney, Fox, HBO, Sony, Starz, Viacom, Universal, Warner and other providers for its fledgling video service, and will have thousands of offerings by the time the first consumers get their Nook HDs on Thursday, and “a broad collection” by the holidays.
When I tried the service prior to public release, there wasn’t much there yet: My search for “Paul Newman” only retrieved one movie, for example. But the video I checked out was noticeably crisper than the same stuff on the Kindle Fire HD, presumably because of the higher-resolution display.
As for music — well, Barnes & Noble isn’t getting into that business itself, so it has no direct equivalent of Amazon’s well-stocked music store. Its app store does have some relevant offerings, including Rhapsody and TuneIn.
Speaking of apps, the Nook HD has access to 10,000 of them, including many Android notables, from Angry Birds to Flipboard. That should be enough to keep anyone productive and entertained, but it’s only around a third of what Amazon says it has in its Appstore. And it’s an even dinkier drop in the bucket compared to what you’ll get on a tablet which has unfettered access to Google’s Google Play Store. If having access to the most apps is important to you, the $199 tablet you want is Google’s own Nexus 7.
One last point in the Nook HD’s favor: The review unit I had ran nearly-final software that seemed to be in good shape. That was a refreshing change from the Kindle Fire HD in its initial, profoundly buggy form. (The recent software update from Amazon has made that tablet much more usable.)
The Nook HD certainly doesn’t trump Amazon and Google’s competitors, let alone the iPad Mini. (Here’s Jared Newman’s feature comparison of all four tablets.) And if you plan to watch much video, I’d confirm that Barnes &Noble’s movie and TV show selection is as impressive as the company claims before opting for the Nook HD over the Kindle Fire HD. But with its featherweight form factor, sharp screen and pleasant user interface, the Nook HD — which is being joined by a 9″ big brother, the $269 Nook HD+ — keeps Barnes & Noble in the cheap-tablet game it helped create with its original Nook Color. Anyone who’s got $199 to spend on a tablet should give this Nook a look. ||||| Barnes and Noble Nook HD Review
The 7-inch HD tablet market is bursting at the seams, but for most users, the buying decision comes down to which ecosystem you prefer. I’ve looked at virtually all the major devices and find most admirable-to-excellent. The Barnes & Noble Nook HD sits in the upper-range of that spectrum.
The book seller followed competitor Amazon into the e-reader market, but has quickly gotten up to speed on design and technology. Soon after Amazon unveiled its all HD lineup of tablets (the Kindle Fire HD 7-inch and Kindle Fire HD+ 8.9-inch), Barnes & Noble followed with its own line of redesigned HD tablets. I spent a weekend with the 7-inch tablet.
By Design
Barnes & Noble has come a long way since its first e-ink e-reader, which is almost the exact same size as the new 7-inch device. The newer and far more powerful LCD-based tablet is, at 11.1 ounces, actually lighter than the old e-reader.
At 7.7-inches x 5-inches x .43-inches the Nook HD is slightly wider than the Google Nexus 7 and considerably narrower that the Amazon Kindle Fire It’s also lighter than both competing devices. I have large hands and can comfortably hold any of these tablets in one hand. My wife, however, found the Kindle Fire HD unwieldy and the Nook HD just right. To be fair, the Kindle Fire HD devotes some of that extra space to a camera (the Nexus 7 has one, too). Barnes & Noble chose to leave out the camera since taking photos and videos was not among the top four activities people conduct with their tablets. In my testing, I never missed the camera.
The rest of the body is about as clean and workable as competitive devices, though I do prefer the Nook HD’s more visible power and volume buttons to the Kindle Fire HD’s completely flush ones (always have trouble finding those). Plus, the Nook has a physical home button (like the iPad’s), a feature I wish every tablet had. The soft-touch back is where you’ll find the speakers, there’s also a micro-SD card slot along the bottom edge for storage expansion and an audio jack along the top edge. One funny side note: While Apple is busy trying to rid the world of 30-pin interfaces, Barnes & Noble is giving them fresh support in the Nook HD.
Under the hood, the Nook HD is an admirably powerful 7-inch tablet, with a 1.3 GHz dual-core processor, a full GB of RAM and, at 1440 x900, a higher resolution screen than either the Kindle Fire HD or the Nexus 7, both of which feature 1280x800 resolution screens. Like many other manufacturers, Barnes & Noble laminates the screen, a process which removes air-gaps from between the LCD panel, touch technology and glass to reduce overall screen reflection. I did find the screen quality impressive. 720p videos, books, comic books, magazines and the new catalog content looked excellent, and every bit of text was crisp at even the smallest size. On the other hand, I have been similarly impressed with the image quality on the Nexus 7 and Fire HD.
One area where the Kindle Fire HD does have the Nook HD beat is in sound quality. Amazon stuffed a couple of Dolby speakers into the Fire HD chassis and they can delivery loud and sharp sound quality. The Nook HD has stereo SRS TruMedia Speakers that simply paled in comparison. If you plan on watching a movie or listening to music on the Nook HD, get out your ear buds (no, the device does not ship with a pair). Update: Barnes & Noble has promised an over-the-air (OTA) update that should address audio issues in Nook Video content.
The Best Face
Barnes & Noble’s Nook HD features my favorite interface of all the 7-inch tablets I’ve tested. Built on top of a thoroughly hidden Android 4.0, the user-centric interface is a complete do-over from the Nook Tablet and it’s completely effective and intuitive.
User profiles sit at the center of this redesign. When you hit the “N” or home button, all the user profiles are there. You simply drag your face to the lock and you’re inside your profile. All the content, email account settings browser bookmarks, parental controls (or lack of them) are keyed to each individual profile. The Nook HD tablet I tested came preloaded with three profiles: one for a man, one for a woman and one for a child. However, I found it easy to add additional ones: A tap on the welcome message at the top of the screen displays all the user profiles associated with the device and the option to create more. I added two more in a matter of moments.
Barnes & Noble chose to add profiles because their research showed that users regularly pass along the tablet to multiple family members and the benefit is obvious. If you enable your child’s profile and then hand the device to them, they only have access to their books, movies and may be blocked from, say, shopping and browsing the web. While I like the profile controls, you'll want to remember to enable password protection on your adult profiles. Without it, your child can easily switch between profiles and all of the content on the device and available online.
Each profile opens to a simple and intuitive home screen that offers a carousel (the latest interface metaphor craze) of recently viewed items (books, movies, games, apps, newspapers, magazines). Below that are links to your library of local content, apps, the Web browser, email and shopping. At the very top of the page is a welcome and a “your Nook Today” button. Tap it and you’ll see your local weather (brought to you by Accuweather), as well as books and magazine sections based on your interests and previous selections.
Both the e-mail and web browser interface are brand new and, like everything else on the Nook HD, they’re the picture of clarity. Amazon Kindle Fire HD’s email interface is plenty clear, too, but Barnes & Noble made a very smart choice with its key apps: it gave Mail, Web, Apps, Shop and your Library a permanent, fixed place on the homepage. It’s true, you can find Shop, Apps and the Web in a scrollable text menu at the top of the Kindle Fire HD interface, but it’s not a prominent and also not entirely fixed. Overall, the Nook HD interface is simpler and better than what you’ll find on the Kindle Fire HD.
Content
Where Amazon still outstrips the Nook is a comprehensive shopping and multimedia experience. Music is, at best, an afterthought on the Nook HD. There’s a Rhapsody App on the device, but I don’t need another music service. Amazon has its own MP3 library and also adds cloud services that make it easy to add your own tracks to the cloud and, by extension, the Fire HD tablet.
The Nook HD has almost pulled even in the video space, with a new, well stocked Nook Video service (under Shop) that features movies and TV shows you can rent and buy. Amazon offers the $75 a year Prime option which adds unlimited free streaming for movies in the Prime Library.
As a reading device, magazine and books look equally good on the Fire HD and Nook HD, but you’ll be happier holding the much lighter Nook HD for longer. Both make magazine content look amazing. You can switch between the standard magazine view, unadorned article view, and a bird’s eye view of dozens of pages with either device. The art of reading magazines on 7-inch devices has been all but perfected, and the choice in this area may come down to selection, though I noticed no major differences in reading options.
The App selection is as rich as you’ll find on any other Android device, but with an extra layer of security—Barnes & Noble curates its entire App library.
Going Shopping
As I write this, Google is unveiling a new Nexus 7 that is reportedly lighter and more powerful than the previous model. It includes 16 GB of storage and costs just $200. Amazon’s Kindle Fire HD is also $199 for a $16 GB model, but it includes sleep-state ads (which bother some, but not me) and does not include an AC adapter (which you can buy separately for $19.99). The Barnes & Noble HD 7-inch is ad free and does include an AC adapter. The 8 GB model is $199. You’ll pay $229 for the 16 GB model. All of these devices are Wi-Fi only.
To put all this in perspective, the new mid-sized tablet in town, the Apple iPad mini costs $329 for the base, 16 GB model. For that reason alone I see it has a somewhat separate device and one that those seeking a sub $250 device may not consider. For those shopping in that range, however, the Barnes & Noble Nook is an instant winner. It’s feature rich, fast, fluid, has an excellent interface and is well worth $200. It’s the obvious choice for previous Nook owners and deserves serious consideration for those in the other e-reader and mid-sized tablet camps who may be considering jumping ship. ||||| Editors' note, November 25, 2013: Due to increasingly stronger competition in the tablet space, CNET has lowered the score of the Nook HD.
The Nook HD is light, comfortable, and has the sharpest screen of any current 7-inch tablet. With full access to the Google Play store, "limited app availability" can now be crossed off as its major caveat.
The Nook HD's higher resolution screen makes movies and games look sharper than on any other small tablet. The OS still feels like a walled garden, but with access to now tons of apps and media content, that doesn't matter as much as it did when the tablet first launched.
While the Nexus 7 is still the best small tablet, the Nook HD's low price (especially now), sharp screen, expandable memory, and great app selection significantly increases its appeal.
Starting at only $129, the Nook HD is one of the best small tablets you can buy.
Design
I spent days comparing the Nook HD to the top 7-inch tablets available and if there’s anything I’ve learned in that time it’s this: the devil’s in the details. From a cursory glance, the average consumer might have a difficult time distinguishing one black, gray, or white slate from the next, but it’s the little things that set them apart. Stuff like weight, corner design, bezel width, and texture are small things that play a big part in comfort and feel.
The Nook HD comes in both smoke (medium gray) and snow (kind of like ivory) and has a soft, rubberized back with a volume rocker on the top-right edge and a power/sleep button opposite it on the left. On the bottom edge are a custom 30-pin charging connector and a microSD card slot covered with a door. The tablet includes a 30-pin to USB cable that plugs into the included AC adapter. Dual speakers sit on the lower back and the top edge of the tablet seat a headphone jack and microphone.
The home button and the home screen. These are your options. (Credit: James Martin/CNET)
In middle of the bottom border, right above the bezel, is the hardware home button, last seen on the Nook Tablet. Like on the iPad, the home button is a great “just press this if things get confusing” solution for the ever-evolving tablet interface. Unfortunately, there’s no built-in camera, no ambient light sensor, no Micro-USB, and no HDMI port.
The Nook HD’s corners are smoothly rounded and at only 0.69 pound, it’s the lightest 7-inch tablet available and feels perfectly comfortable when held. The device is as thick (depth-wise) as the Nexus 7 and a bit thicker than the Fire HD and though it’s wider than the Nexus 7, it’s noticeably narrower than the almost-too-wide Fire HD. Held vertically, the side bezel's width just about matches the Nexus 7; however you get a little extra space due to the black borders surrounding the Nook’s screen.
Barnes & Noble Nook HD Amazon Kindle Fire HD Google Nexus 7 Apple iPad Mini Weight in pounds 0.68 0.86 0.74 0.68 Width in inches (landscape) 7.65 7.7 7.8 7.87 Height in inches 5 5.4 4.7 5.3 Depth in inches 0.43 0.4 0.4 0.28 Side bezel width in inches (landscape) .3/.5 0.9 0.8 0.8
Even with its light weight, the Nook HD’s build feels solid and durable; however, it proves susceptible to screen warping with enough pressure in the right place. Applying pressure to the back or along the right bezel yields a visible screen warping effect on the tablet’ screen. Now, screen warping occurs to some extent on nearly every tablet; however, if you’re just holding the Nook HD while reading a book or watching a movie, you’ll likely have no cause to apply enough pressure to your Nook HD for this to be a problem.
The interface
The Nook HD's operating system uses Ice Cream Sandwich as its base, with a custom-designed skin that feels like an evolution of the original Nook Tablet's OS. The home screen sports a light gray, slightly textured aesthetic that permeates through all native apps and menus. The home screen shows Library, Apps, Web, Email, and Shop options near the bottom with a global search bar underneath. Directly above is a space to organize your content shortcut icons, and near the top of the screen sits your content carousel.
Once in your library, you'll have access to every piece of content available to you. (Credit: James Martin/CNET)
In the top-right edge of the screen is Your Nook Today, which shows the current weather as well as book and movie recommendations based on recent additions to your library. Also, if the opt-out-of-ads kerfuffle for the Fire HD turned you off, you'll be pleased to know that Barnes & Noble has no such ads on its tablets.
Settings can be accessed by tapping the gear at the very top right of the screen and includes options too many to name. If you've ever used a tablet before however, there’s nothing included in the settings that will surprise you. The default software keyboard, thankfully, includes a tab, but typing didn’t feel as as accurate as it does on the Nexus 7.
Nook profiles allow multiple users to use a single tablet, while keeping each person's content their own. (Credit: James Martin/CNET)
Nook Profiles can be accessed from the upper left-hand corner and allows users to set up multiple profiles on a single tablet. With a simple tap of the profile photo at the top of the screen, you can choose to switch to a new profile almost instantly. Once in the new profile, that user’s content (and only that user’s content) will be displayed and accessible. Lock-screen switching is also possible. Both adult and child profiles can be accessed and passwords can be added to adult profiles, ensuring that not just anyone can access your content. Nook profiles are simple to implement and feel secure and useful, likely appealing to families on a budget.
Overall, the interface is much cleaner and intuitive than the Nook Tablet’s; however, I still have a few problems with navigation. As much as I like the Home button, I feel the interface relies on it a bit too much. If looking at a magazine for example, there’s no built-in navigation to view all magazines and you’re forced to use the home button and then navigate to another piece of content if you want to switch. Not a huge deal, but it's annoying in the moment.
Now PLAYing: Google!
As of version 2.1.0 of the Nook OS, both the Nook HD and Nook HD+ include full Google Play support. All apps, music, videos, books, and magazines available on Google Play can now be downloaded directly to the Nook HD tablets. The Nook Store and its content is still available.
Google Play. Now that's more like it! (Credit: Screenshot by Eric Franklin)
The chief criticism of the Nook HD tablets when they launched was the severely limited apps and media content ecosystem. With the additional of Google Play however, this effectively becomes an non-issue. Google Play is second only to iOS in terms of available content.
Chrome is now the default Web browser and all (aside from Google now) Google service apps -- Gmail, Magazines, and Books, etc. -- are automatically downloaded to the tablet once the update is installed.
Among the most popular 7-inch tablets, the Nook HD is the only device that includes a microSD card for storage expansion. (Credit: James Martin/CNET)
Hey, I hear the Nook HD does pretty well with books. (Credit: James Martin/CNET)
If you have an Ultraviolet account, any movies added to your digital UltraViolet library will show up in your Nook HD+ library as well. A Netflix app is also available, but there are no plans to bring HBO Go just yet. The tablet supports MP4, 3GP, WEBM, and AVI video files, and MKV files.
Thanks to its high-resolution screen, text in books is crisp and clean whether in Google Books or the Nook’s own book app. On the Kindle Fire HD, reading options like X-Ray, the percentage-read counter, and immersion reading may give Amazon's tablet the slight edge here. For a pure reading experience on a large tablet, though, the Nook HD+ the best current solution thanks to its lightweight and comfortable build.
Like pure Android tablets, the Nook HD does not have access to the Amazon Instant Video app. Right now, the app is only available on Kindle Fire tablets and iOS devices. Something to consider if, like myself, you're an Amazon Prime member with a heavy Amazon video streaming habit.
The Nook’s magazine app is still the preferred way to view your favorite periodicals. I includes a smooth page-turning effect and the option to easily cut any page and include it in a virtual scrapbook. So, depending on your magazine(s) of choice, you could easily make a workout or recipes scrapbook, which is a lot less cumbersome than taking screenshots. Unfortunately, your clippings are only stored locally and (probably thanks to copyright laws) there's no way to share them online. You can, however, share them with other profiles on your Nook HD+.
Catalog support? Check! Oh, you didn't know that was a thing? Well, it is. (Credit: James Martin/CNET)
Catalog support is not something I ever thought I'd begin a sentence with in a tablet review, but here we are and the Nook HD+ has it. Catalogs can be downloaded through the Nook store and function much in the same way that magazines do. However, certain items (predetermined by the catalog's publisher) will have a distinct visual cue next to them called a hot spot. Tapping on the hot spot takes you to a page with more information about that particular item at which point you can add it to your scrapbook and be seamlessly directed to the company's Web page for that item. If thumbing through catalogs is your thing, it makes for a fairly convenient and entertaining way to shop.
Hardware features
The Nook HD houses a 1.3GHz Texas Instruments OMAP 4470 CPU with a PowerVR SGX544 GPU bringing up the rear. It comes in both 8GB and 16GB varieties and its microSD card slot supports up to 64GB cards. The tablet includes 1GB of RAM, has 802.11 b/g/n Wi-Fi support, and Bluetooth 4.0. There’s no gyroscope, compass, or GPS inside the tablet. There is however an accelerometer. | Barnes & Noble's Nook HD is by no means a world-changer, but most reviewers think those in the market for a modestly priced e-reader would be well advised to give the $199 device a close look. Dig into the source links for more details, but here are some bottom lines: Lance Ulanoff, Mashable: "It’s feature rich, fast, fluid, has an excellent interface, and is well worth $200. It’s the obvious choice for previous Nook owners and deserves serious consideration for those in the other e-reader and mid-sized tablet camps who may be considering jumping ship." Eric Franklin, CNET: It "can’t match competing tablets in media library breadth, but as long as you're not looking for bells and whistles, its sharp screen and comfortable body make it an ideal tablet choice for reading books and magazines. " Harry McCracken, Time: "With its featherweight form factor, sharp screen, and pleasant user interface, the Nook HD ... keeps Barnes & Noble in the cheap-tablet game it helped create with its original Nook Color. Anyone who’s got $199 to spend on a tablet should give this Nook a look." Brian Heater, Engadget: It's got a "great little screen" and "snappy performance," making it a "fine little tablet for the price." But "in a space where the Kindle and Nexus have been crowned champions, asking people to make the leap feels like a bit of a hard sell." |
For about 30 years, TCMP has been IRS’ primary program for gathering comprehensive and reliable taxpayer compliance data. It is IRS’ only program to measure noncompliance on a random basis, allowing IRS to make statistically reliable estimates of compliance nationwide. IRS uses the data for measuring compliance levels, estimating the tax gap, identifying compliance issues, developing formulas for objectively selecting returns for audit, and allocating audit resources. Congress and federal and state agencies have used TCMP data for policy analysis, revenue estimating, and research. The 1994 TCMP survey is planned to be the most comprehensive TCMP effort ever undertaken. That is because IRS is undertaking four surveys at once to collect comparable information on businesses organized in different ways. Currently planned to include about 153,000 tax returns, this TCMP was designed to obtain compliance information for individuals (including sole proprietors); small corporations (i.e., those with assets of $10 million or less); S corporations; and partnerships. This TCMP was also designed to obtain information at the national level as well as for smaller geographical areas across the country. About 120,000 of the sample returns are to cover businesses; about 33,000 are to cover individuals. This is to be the first time that IRS will conduct a TCMP audit for all four types of taxpayers at the same time. The 1994 TCMP sample is stratified by market segments, as opposed to type of return, income amount, and asset size, which were the characteristics used to stratify samples in prior surveys. A market segment represents a group of taxpayers with similar characteristics, such as taxpayers engaged in manufacturing. IRS plans to stratify taxpayers into 23 business and 4 nonbusiness (individual) market segments. IRS will also have one market segment for foreign-controlled corporations. IRS believes that stratifying in this manner would allow it to more effectively use TCMP data for identifying noncompliance trends and selecting cases for audit. To assure comparability with previous TCMP surveys, the sample can also be stratified into the traditional groupings (i.e., type of return). As planned, in the 1994 TCMP, IRS would audit about 40,000 more returns than the aggregate for all entity types from the latest TCMP surveys conducted on these entities. IRS’ primary reasons for this increase are the use of market segments and ensuring statistical validity for IRS’ 31 District Office Research and Analysis sites, which are located throughout the country. IRS considers the 1994 TCMP effort to be particularly important because it would be the first comprehensive effort to validate its current market segment compliance strategy for identifying and correcting noncompliance, and also because existing compliance data are getting old.IRS expects to have completed audits on about 30 percent of the sample returns by October 1996 and to have final TCMP data in late 1998. IRS plans to collect data on the reasons for noncompliance and the specific tax issues associated with the noncompliance. IRS also plans to place greater emphasis on quality audits to ensure that accurate data are collected. Finally, in its TCMP training for auditors, IRS plans to emphasize the need to make effective use of internal data to reduce the amount of information requested from taxpayers, thus reducing the burden imposed on those taxpayers. Our objectives were to (1) determine how IRS addressed the problems discussed in our 1994 TCMP status report and, if the problems persist, how they will affect final TCMP results; (2) identify informational resources other than TCMP that IRS could use to target its audits more effectively; and (3) assess the value of TCMP data for alternative tax system proposals. To determine the actions IRS took on the concerns we raised in our 1994 report, we reviewed TCMP documents and discussed the actions taken with IRS officials responsible for designing and implementing the program. To determine whether other information sources could be used to replace TCMP, we relied on work we had done on TCMP and we discussed with IRS officials how IRS could use other potential data sources, including state and nongovernment sources. To determine the relevancy of TCMP data for new tax system proposals, we reviewed various published documents on these systems and compared them to the current income tax system. Our observations in this report are based in large part on the work we have done over the years on IRS’ compliance programs in general as well as specific work on TCMP. We issued a report in May 1994 on all such work. We did our work in September 1995 in accordance with generally accepted government auditing standards. On September 29, 1995, we obtained oral comments on a draft of this report from officials responsible for planning and implementing TCMP in IRS’ Compliance Research Division, including the National Director of Compliance Research. We have incorporated their comments where appropriate. Our 1994 TCMP report discussed concerns dealing with various aspects of IRS’ plans for the upcoming TCMP. Basically, these concerns centered on IRS being able to (1) meet major milestones for starting audits, (2) collect audit adjustment data on partners and S corporation shareholders, (3) collect data on potentially misclassified workers, (4) develop data collection systems, (5) make it easier for researchers to access TCMP audit workpapers, and (6) develop a TCMP research plan. In our 1994 report, we raised a concern about IRS’ ability to meet its October 1, 1995, milestone for starting the TCMP audits. Our concern was based on the amount of work that had to be done to design and test the TCMP data collection system, develop training material, train auditors, and produce case file information. In early September 1995, IRS postponed the start of its TCMP audits from October 1, 1995, to December 1, 1995. IRS attributed the delay to the uncertainties about its fiscal year 1996 budget. IRS does not expect the delay in starting the audits to affect the March 31, 1998, date for completing all 153,000 TCMP audits. The delay in the start of the audits could allow IRS to complete various TCMP database testing, which has not been completed as originally scheduled. For example, IRS has not completed all its tests of the consistency of reported business return data, which were scheduled to be completed by August 31, 1995. The tests are designed to identify and eliminate inconsistencies in the data and need to be completed before audit cases can be sent to the field. According to IRS officials, the tests associated with reported return data on individual taxpayers (i.e., Form 1040 information) have been completed and returns are ready to be sent to field offices for audit. IRS expects to complete all tests of the business portion (i.e., corporations and partnerships) of the database by November 30, 1995. We are concerned that if major modifications have to be made to the data, the December 1, 1995, date to start audits of business taxpayers could be delayed. In our 1994 report, we raised concern about whether the amount of information IRS would be collecting on partnerships and S corporations would be adequate to measure the compliance levels for these two entities. In response to the report, IRS officials said they would collect more data on partnerships and S corporations but would not collect data on partners and shareholders. IRS has since decided that it would capture data on partners and shareholders. This additional data could increase the value of TCMP data for determining tax impacts of partnership and S corporation audits and measuring the tax gap associated with these entities. In our 1994 report, we were concerned that IRS would not be collecting sufficient information on businesses that misclassified their workers as independent contractors instead of as employees. We were also concerned that IRS would not be gathering data on taxpayers who file returns as sole proprietors, but who potentially may be employees and not independent contractors. According to IRS officials, IRS will be capturing tax data on referrals made to employment tax specialists on classification cases. Also, IRS has developed a detailed employment tax data collection instrument to gather in-depth data on the results of those employment tax issues that are identified in the TCMP audits. In our 1994 report, we commented on IRS’ concurrent development of two data collection systems for use by auditors to directly enter their audit results onto computers. We were concerned that IRS had not made a decision on which of these two systems to use. Our concern related to the time IRS would need to test the selected system, develop training materials, and train auditors on how to use it. IRS stated that it needed a back-up system to the primary system, which is the Totally Integrated Examination System (TIES), as an insurance plan in case TIES proves less than satisfactory. TIES was being developed for use in IRS’ regular audit program and is being modified to meet TCMP specifications. According to IRS officials, complete system acceptability tests will be done on both data collection systems. IRS officials said that they expect the tests to be done by November 22, 1995, and that TIES will be available for use by the time audits are scheduled to start. If major modifications need to be made to the systems as a result of the tests, we are concerned that IRS may not meet its December 1, 1995, revised milestone for starting audits. In our 1994 report, we suggested that IRS find ways to make TCMP audit workpapers available through electronic media so that the workpapers would be readily available for compliance research. In commenting on our report, IRS agreed to explore the feasibility of retaining the computer disks for those cases where the workpapers are generated by computer. IRS officials subsequently informed us that it is not technically feasible to automate all audit workpapers. However, IRS has included a 100-line comment section in the TCMP data collection systems and in the TCMP database to capture clarifying information on complicated cases, which could provide researchers with some of the additional information found in the audit workpapers. Adding the comment section to the TCMP database could enhance the overall value of the TCMP data and may be a good substitute, in some cases, for the audit workpapers. Therefore, it is important that auditors be instructed in the types of information to include in the comment section. The automated comment feature also provides IRS with an opportunity to collect information on issues that cannot be analyzed using the data elements currently planned to be on the TCMP database. For example, one criticism of TCMP audits has been that the audits are burdensome or overly intrusive for taxpayers. IRS could use the automated comment section to gather information on taxpayer burden, such as the time taxpayers estimate they spent preparing for the audit and the types of documents auditors had to get from taxpayers in order to verify tax return data. In our 1994 report, we pointed out that IRS did not have a research plan that defines the research questions and the data to be collected that would answer the questions. IRS still does not have a research plan. In response to our 1994 report, IRS officials stated that from past TCMP surveys they know what elements are needed to do compliance estimation, measure the tax gap, and develop return selection formulas. They said that since virtually all the data from sampled returns are collected, IRS will have appropriate and comprehensive information to meet its research needs. While the lack of a research plan may not directly lessen the value of final TCMP results, such a plan could put IRS in a better position to quickly analyze final TCMP data. One criticism of prior TCMP surveys has been that useable TCMP data were not produced in a timely fashion. To help formulate research questions, IRS could analyze preliminary TCMP results. For example, IRS expects to complete about 46,000 TCMP audits by the end of fiscal year 1996, which could be enough cases to formulate research questions. IRS is reluctant to use preliminary unweighted or partially weighted TCMP data because the data are not statistically valid. Even though preliminary data may not be statistically valid, these data could provide early information on possible noncompliance trends and other problems, such as complexity issues, which could be useful to both IRS and Congress when they are examining potential modifications to the tax system. IRS uses TCMP data to develop objective, mathematical formulas, which it uses to score returns for audit selection. As a result, IRS can make more efficient use of its audit resources and avoid unnecessarily burdening compliant taxpayers. For example, in 1969, the year before IRS started using this scoring system, about 46 percent of IRS’ audits resulted in no change to an individual’s tax liability. By using TCMP-based formulas, IRS has been able to more accurately select tax returns requiring changes, thus reducing the no-change rate to less than 15 percent in 1994. We are not aware of any other available data that can be used to develop return selection formulas that would allow IRS to target its audits as effectively as TCMP data. IRS is attempting to develop an Automated Issue Identification System that has the potential of selecting returns that should be audited. The system is being tested on individual tax returns in two IRS locations, and, according to IRS officials, the preliminary results are promising. However, this system would be dependent in part on the TCMP-developed return selection formula to identify the returns that should be audited. Also, this system would require that almost all tax return data be transcribed onto computers similar to the amount of data transcribed from returns that are selected for TCMP audits. IRS does not expect to have the technological capability to have all return information on computer until after the turn of the century. There are third-party databases that potentially could be used to supplement the compliance data that IRS obtains from its TCMP surveys. However, these databases cannot be used to develop return selection formulas because they either contain just aggregate data on businesses and individuals or have information just on specific tax issues. For example, Bureau of Labor Statistics and U.S. Census data can be used to make aggregate profiles of the population based on various income characteristics, such as average household earnings. Some states have databases that IRS could use to supplement its audit and other compliance activities, such as state sales tax data. Commercial sources for information on industry norms are also available to supplement IRS compliance activities. IRS currently uses these data sources in some of its compliance research projects. There are a number of proposals to change the current tax system. The proposals are as follows: A Flat Tax would levy a single-rate wage tax on individuals and a single-rate cash-flow tax on businesses. An Unlimited Savings Allowance (USA) Tax would provide for a three-bracket individual income tax, with a full deduction for income saved rather than consumed. On the business side, a single rate would apply to income from both corporate and noncorporate businesses, with an immediate deduction for capital investment and purchases of inventory. A Simplified Income Tax would broaden the tax base, lower the tax rate, and eliminate most current deductions and credits. A Value Added Tax (VAT), a consumption tax, would be collected at each stage of the production process. A Retail Sales Tax, a consumption tax, would be collected at the retail level in the form of a sales tax. To determine the relevancy of TCMP data to these alternative tax systems, we analyzed the tax return elements IRS plans to examine in its tax year 1994 TCMP and published documents on the systems. (See app. I for the results of this analysis.) In doing our analysis, we did not consider the TCMP costs and benefits or taxpayer burden for each of the proposals. Generally, we found that TCMP data could have some relevancy for each alternative tax system. The degree of relevancy depended on the number of current tax elements that would be retained under an alternative tax system—the more elements that are retained, the more relevant the TCMP data would be. Potentially, data obtained from TCMP audits could be used to guide both the final design and administration of a new tax system. While complete 1994 TCMP data would not be available until late in 1998, data on about 46,000 sample cases should be available by the end of fiscal year 1996. As questions arise during the process of drafting new tax laws, data from some of the 46,000 cases, while not statistically valid at the district level, may indicate obvious trends in nationwide data that could be used in making decisions on changes to tax law. With respect to the administration of tax laws, each of the current proposals would require that tax administrators implement some form of compliance strategy. Any such strategy would likely be dependent on compliance data. The 1994 TCMP should be able to provide much of the information necessary for implementing such a compliance strategy. For example, any new tax system would likely continue to rely on audits to ensure compliance. Accordingly, auditors would continue to need compliance information on business income and expenses and, for some of the proposals, compliance information on individual income and deductions. For the most part, this data could be provided by the 1994 TCMP. Some TCMP data would be useful in the design of all the proposed tax systems. For example, gross receipts, a key area of noncompliance in past TCMP audits, would be important in each of the new tax proposals. For this potential problem area, TCMP should show the compliance levels, provide specific tax issues associated with the identified noncompliance, and provide reasons for the noncompliance. The compliance data should help Congress to determine the potential extent of noncompliance that could be expected under the new tax system proposals. This would be important in setting tax rates. Similarly, data on the reasons why the noncompliance occurred and the specific tax issue involved could provide clues to legislative actions that may be needed to help prevent noncompliance under the new system or to help tax administrators identify noncompliant taxpayers more readily. Knowing these weak spots would be useful so that Congress could attempt to overcome these problems as it considers designs for new tax systems. To the extent that the proposals for tax reform retain elements of the current system, such as properly determining business receipts and expenses, TCMP data could play a prominent role in helping to evaluate and design those parts of the proposed new tax system. To the extent that a new tax system is adopted that differs radically from the existing system, TCMP data would still be useful. For example, TCMP information on gross receipts of retail businesses would be useful for designing and administering a retail sales tax system. Under this system, information on all business income and expenses could be relevant for profiling those retailers who would be more likely to underreport their gross receipts. Also, if a federal retail sales tax included consumer services not now covered by state sales taxes, TCMP could be the only source of information on underreporting of gross receipts by the sellers of these services. It must be recognized that the results from TCMP would reflect noncompliance under the income tax law and the administrative practices in place today. Incentives or opportunities to evade tax on certain transactions may increase or decrease under a new system. For example, if a business taxpayer fails to report a sale of an asset under the current income tax, the business might avoid paying tax on a capital gain, a fraction of the selling price. Under many consumption tax proposals, all the proceeds of an asset sale are taxable, but at a lower rate. The incentive to not report the sale may increase or decrease relative to the current system, depending on the circumstances. In addition, opportunities to not comply in some areas may change significantly depending on whether administrative tools such as withholding and information reporting were included as part of the system. In order to effectively select returns for audit under a new tax system, tax administrators may be able to use 1994 TCMP results in combination with information on the relative incentives and opportunities to avoid tax under that system, until direct measures of noncompliance under the new system became available. The preceding discussion dealt only with the usefulness of TCMP results for administering each of the proposed tax systems once the new system had been fully implemented. The results of the planned TCMP would also be of use in administering the current income taxes in the interim period before a new system would be completely phased in and the old system completely phased out. The 1994 TCMP data would become increasingly important if it proves impossible to fully implement a new tax system until after the turn of the century. This is because IRS would need to continue to audit returns under the current tax law, and existing return selection criteria are based on past TCMP survey data, which are growing older every year. The usefulness of the forthcoming TCMP during the interim would depend on the effective date of the replacement system and on the extent to which the enacting legislation would include transition provisions. The 1994 TCMP data used to develop audit selection formulas for the current tax system are not scheduled to be developed before late 1998. However, if a new tax system became effective before that time and had few transition provisions, IRS could still use interim TCMP data on noncompliance issues to direct audits of tax returns filed under current rules. If tax reform legislation were to take longer to pass, if the legislation provided for a significant period of time between the date of enactment and the effective date of the new system, or if the legislation contained numerous transition provisions, then the value of the planned TCMP would be greater. Items such as unused tax credits and deductions for depreciation, depletion, and net operating losses might be subject to transition rules. For example, it has been suggested that if a flat tax were enacted, businesses might be allowed to claim depreciation deductions during a transition period of several years for assets they purchased under the old system. Others have suggested that taxpayers could be subject to both the current income tax and a new consumption tax for a period of years, with the income tax rate declining as the consumption tax rate increases. If the planned TCMP were cancelled and the current income taxes were not completely phased out before the next century, then IRS would be compelled to select income tax returns for audit on the basis of compliance information that was over 10 years old. Administrators of the new tax system also would have only this same dated compliance information to guide their enforcement efforts for several years before data from any future TCMP became available. IRS has taken action on most of the concerns we raised in our December 1994 report. The delay in starting the TCMP audits because of budgetary concerns is fortuitous because IRS had not completed testing all the tax return database or data collection systems for the TCMP. These tests have to be completed before audits can start. If the tests show that major modifications have to be made to the database or data collection systems, then IRS may not meet its December 1, 1995, revised date for starting audits. There is still time for IRS to develop a research plan so that it could analyze final TCMP results more quickly. IRS could begin now to formulate research questions and could also use preliminary TCMP data as they become available to develop other questions. It is important that there are no further delays because the existing TCMP data are old, and, to our knowledge, there are no other data sources that IRS could use to develop formulas for selecting returns for audit. IRS is attempting to develop a system that could be used for selecting returns, but this system would not be operational until after the turn of the century. TCMP data could also be of value for helping with the design and administration of alternative tax systems. The value of the data would depend on how much of the current tax system would be retained under the new system. On September 29, 1995, we discussed a draft of this report with IRS Compliance Research Division representatives, including the National Director of Compliance Research. They generally agreed with our assessment of the actions taken on the concerns we raised in our 1994 report, the availability of other information sources to replace TCMP, and the relevancy of TCMP data for new tax system proposals. Copies of this report are being sent to various interested congressional committees, the Director of the Office of Management and Budget, the Secretary of the Treasury, the Commissioner of Internal Revenue, and other interested parties. It will also be made available to others upon request. Major contributors to this report are listed in appendix II. Please contact me on (202) 512-9044 if you or your staff have any questions about the report. This appendix discusses some ways the individual and business segments of the 1994 TCMP could be used to evaluate the design and administration of the five alternative tax system proposals. The proposals are described below. A Flat Tax would levy a single-rate wage tax on individuals and a single-rate cash-flow tax on businesses. An Unlimited Savings Allowance (USA) Tax would provide for a three-bracket individual income tax, with a full deduction for income saved rather than consumed. On the business side, a single rate would apply to income from both corporate and non-corporate businesses, with an immediate deduction for capital investment and purchases of inventory. A Simplified Income Tax would broaden the tax base, lower the tax rate, and eliminate most current deductions and credits. A Value Added Tax (VAT), a consumption tax, would be collected at each stage of the production process. A Retail Sales Tax, a consumption tax, would be collected at the retail level in the form of a sales tax. Under the VAT and Retail Sales Tax proposals, individuals would bear taxes as they consume goods and services, but, unless they were sole proprietors, they would not file tax returns. Therefore, the nonbusiness (e.g., individuals who are not sole proprietors) portion of the TCMP (about 18 percent of the sample) has no relevancy for these two types of taxes. The flat tax, the USA tax, and the simplified income tax would require returns for individual taxpayers who do not own businesses. Thus, TCMP data should have some relevancy in evaluating these alternative tax systems. Table I.1 shows the TCMP data elements for individuals that could be relevant to policymakers and tax administrators in developing and administering the flat tax, USA tax, and simplified tax systems. The TCMP data elements are essentially the same as the line items found on the Form 1040, Individual Income Tax Return. The “yes” in the columns in table I.1 indicates that the TCMP element would be relevant for evaluating the proposals. Those columns in table I.1 that do not contain “yes” indicate that TCMP data collected for these elements would not be relevant for that particular tax system. The sample sizes shown in table I.1 are the number of individual returns IRS plans to audit in the TCMP. Wages, salaries, and tips Taxable refunds or credits of state and local income taxes Capital gain or (loss) Income from rental real estate, partnerships, S corporationsIRA deductions for self and spouse One-half of self employment taxKeogh retirement plan and SEP deductionPenalty on early withdrawal of savings State and local income taxes (continued) Child and dependent care expenses Credit for the elderly or disabled Social Security tax on tip income Tax on qualified retirement plans (Table notes on next page) As indicated in table I.1, some of the TCMP individual tax elements should be relevant for evaluating the flat tax proposal. However, there would be no need to evaluate the compliance associated with investment-type income or deductions, such as charitable contributions or state and local taxes, because these elements are not part of the proposal. The relevant individual tax elements are filing status, exemptions, wages and salaries, pension income, and unemployment compensation. TCMP data could be used to determine how accurately taxpayers have reported these elements and the reasons why taxpayers have failed to comply under the current tax system. For example, the TCMP data may indicate that even under a flat tax, current requirements are too complex for many taxpayers to determine their proper filing status. The TCMP data could provide information on ways current law could be simplified to reduce complexity and improve compliance. As indicated in table I.1, almost all TCMP income elements for individuals would be included in the USA tax system and, thus, should be useful for evaluating this system. Under the USA system, taxpayers would be allowed unlimited deductions for net increases to savings; however, except for IRA deductions, taxpayers are not currently required to report these data. Therefore, TCMP data would not be useful for determining whether taxpayers would accurately report all investment deposits. On the other hand, TCMP data should be useful for determining the reporting accuracy of investment proceeds. Under the USA system, all deductions under the current income tax, except for mortgage interest and charitable contributions, would be eliminated. TCMP data should be useful in developing compliance statistics and programs for these two items. However, TCMP could not be used to evaluate the postsecondary education deduction allowed under the USA proposal. Similarly, TCMP data could not be used to evaluate the fringe benefits that would be taxable under the USA proposal because these benefits, such as employer paid medical insurance, are currently not taxable and would not be studied in the TCMP survey of individuals. However, data on fringe benefits would be gathered on the business portion of the TCMP. As indicated in table I.1, almost all of the TCMP elements should be relevant for evaluating compliance with income reporting requirements. On the deduction side, only TCMP data on mortgage interest would be relevant for evaluating this system. Like the USA tax system, fringe benefits would be taxed; thus, the individual portion of the TCMP would not be useful for evaluating this type of income. All five alternative tax systems cover businesses, which include sole proprietorships, corporations, S corporations, and partnerships. About 82 percent of the TCMP sample covers businesses. Table I.2 indicates the TCMP data elements that should be useful for developing and administrating the flat tax, USA, VAT, and retail sales tax systems. Table I.2 does not contain information on the simplified income tax system because we were not able to obtain any information on the business portion of this tax system. However, on the basis of information available on the individual portion, it would appear that almost all business income and deduction items in the current system would be relevant under the simplified income tax system. Income and cost of goods sold Net gain or (loss) from sale of business property(continued) Relevant TCMP data by proposal Information gathered on businesses includes small corporations, S corporations, partnerships, and sole proprietorships. Under the flat tax proposal, businesses would be assessed a tax on gross receipts less the costs of providing the goods or services. Therefore, as indicated in table I.2, almost all of the TCMP tax elements dealing with business gross receipts and deductions should be relevant for administering a flat tax, such as designing compliance strategies, identifying returns for audit, and estimating the tax gap. If this proposal were implemented, TCMP data on business investment income and interest expenses would not be relevant. As indicated in table I.2, many of the income and deduction items currently reported on business returns would still be reported on returns under the USA tax proposal. Thus, the TCMP data would be relevant for developing compliance programs, selecting returns for audit, and estimating the tax gap. Items that would not be relevant include investment type income (e.g., interest and dividends); and deductions for wages and salaries, interest payments, and contributions to employee pension programs. As indicated in table I.2, if a VAT were adopted as a replacement for the existing income tax, TCMP data on business gross receipts and purchases would be relevant for looking at potential compliance problems with VAT reporting. Thus, TCMP information would continue to be useful in developing compliance programs, selecting returns for audit, and estimating the tax gap. As indicated in table I.2, return information on gross receipts should be relevant for evaluating compliance problems under a retail sales tax system. A retail sales tax would generally apply only to businesses in the retail trade market segments. This group comprises about 24 percent of the planned 1994 TCMP sample. Lou Roberts, Evaluator-in-Charge The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (301) 258-4097 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a congressional request, GAO provided information on the Internal Revenue Service's (IRS) Taxpayer Compliance Measurement Program (TCMP) for tax year 1994, focusing on: (1) how IRS addressed the problems identified in a previous GAO report; (2) how persistent problems affect final TCMP results; (3) other informational sources that IRS could use to target its audits more effectively; and (4) the relevancy of TCMP data for alternative tax system proposals. GAO found that: (1) IRS has taken appropriate actions to correct the previously identified problems in the implementation of TCMP; (2) due to uncertainties about its fiscal year 1996 budget, IRS has delayed TCMP audits until December 1, 1995; (3) the audit delay will allow IRS to complete testing of TCMP database components and data collections systems; (4) the audits could be further delayed if the tests reveal additional problems; (5) IRS plans to collect data on partners, shareholders, and misclassified workers which should allow it to better measure compliance levels and TCMP audit results; (6) computerized auditor comments should make it easier for researchers to analyze TCMP results and allow IRS to collect data on other tax issues that are not a part of TCMP; (7) IRS still needs to develop a research plan that would allow it to more timely analyze TCMP data; (8) no alternative information sources exist that could help IRS better target its audits; (9) IRS is developing a new identification system for tax return audits, but it will not be available until after year 2000; and (10) TCMP could be useful in designing and administering a new tax system and identifying compliance trends. |
A non-profit charity founded by Newt Gingrich to promote freedom, faith and free enterprise also served as another avenue to promote Gingrich's political views, and came dangerously close, some experts say, to crossing a bright line that is supposed to separate tax-exempt charitable work from both the political process and such profit-making enterprises as books and DVDs.
The charity, Renewing American Leadership, not only featured Gingrich on its website and in fundraising letters, it also paid $220,000 over two years to one of Gingrich's for-profit companies, Gingrich Communications. It purchased cases of Gingrich's books and bought up copies of DVDs produced by another of the former House speaker's entities, Gingrich Productions.
"The spirit of operating a non-profit organization is to work for the public good regardless of the politics that are involved," said Daniel Borochoff, president of the American Institute of Philanthropy, in an interview with ABC News. "I believe it violates that spirit."
Asked about the allegations this morning prior to a speech in New Hampshire, Gingrich urged an ABC News reporter to focus on his speech.
"I'm not concerned about that. The American people aren't concerned about that. Try covering the speech," Gingrich said as he left a campaign event. When the reporter tried to follow up, Gingrich got in his waiting car and slammed the door.
ABC News was engaged for weeks in discussions with top Gingrich advisors about money from Gingrich's tax-exempt charity that went to his for-profit businesses -- known as related-party transactions -- which were never disclosed on the charity's tax forms. ABC News found evidence of the payments in a May 2011 audit commissioned by the West Virginia secretary of state's office. Many of ABC News's questions remained unanswered last week when Gingrich's presidential campaign team resigned en masse, citing dismay with the candidate's lackluster approach to his bid. Questions were resent to Gingrich's new team, but they did not generate a reply by the time of publication.
Tuesday afternoon, the Gingrich campaign released a statement saying the ABC News report "did not find any activity that was not fully supported by the law."
"That's because both [Renewing American Leadership] and Gingrich Communications took great care to make sure all resources were being used legally and ethically," the statement says.
One of those who quit the campaign, longtime Gingrich spokesman Rick Tyler, told ABC News in a series of email exchanges prior to his resignation that the charity spent no money on political activity and "did nothing to promote anyone's political career." Tyler also revealed that he personally was the beneficiary of the six-figure payments the charity made to Gingrich Communications – money he was paid to run the charity until he began helping prepare Gingrich for a presidential bid.
The blending of charitable and political activity has been a touchy area for Gingrich. In the late 1990s Gingrich became the first sitting House Speaker to be censured and fined by the House Ethics Committee after being accused of drawing money from a tax-exempt organization to help finance his political activities. The IRS later cleared him on the charges, but not before the House ordered him to pay a $300,000 fine.
Since leaving the speakership, Gingrich has built an elaborate conglomerate of businesses and political organizations that have all worked in concert to promote his ideas, sell his books, and keep him in the mix of political figures who shape conservative ideology and messaging. The profit-making portion of the Gingrich empire has helped him amass enough wealth to buy a $1 million home in suburban Washington, D.C., and have a now-infamous $500,000 line of credit at Tiffany's.
It is often difficult to tell where the work of one Gingrich entity ends and where the work of another begins. For instance, money raised by a political group he founded, American Solutions, paid for millions of dollars worth of charter jet flights Gingrich took to crisscross the country promoting the movies of his production company. He made paid public speeches that helped fill the accounts of his communications firm and promote the ideas developed by yet another business, a for-profit think tank called the Center for Health Transformation.
Charity Watchdog: Business 'Must Be Disclosed'
His wide range of activities appears to have been effective in making Gingrich money and infusing his ideas into public discourse. Some of this activity is disclosed in publicly available documents -- money donated to and spent by the political organization American Solutions is all chronicled in public IRS filings. Borochoff said Gingrich was not legally required to disclose the payments from the charity to his consulting firm because, while his name and image were peppered throughout the charity's materials, and he was identified as its founder, he never took a formal seat on its board. Instead, the charity's board was led by Tyler, who was then serving as Gingrich's personal spokesman.
"If you're a director and you're doing business with the charity, it has to be disclosed, these are federal requirements," Borochoff said. "But the fact that [Gingrich] is not a director or an employee, he can skirt those disclosure rules. He doesn't have to disclose if he's selling things to the charity or receiving money from the charity."
Tyler said he never asked Gingrich to join the charity's board because he "did not want to use any more of Newt's time," not because he was attempting to avoid any disclosure requirements.
Gingrich declined repeated requests to be interviewed by ABC News. Tyler responded to questions sent by email but did not provide a formal statement, other than to write that he did not want to participate in this report because he believed the network was "pursuing a piece that intends to deliberately malign the Gingrich family of businesses and the people who work for them."
ABC News did, however, speak for more than an hour with Jim Garlow, the San Diego pastor who agreed to take over the reins of the charity in March, when Gingrich started taking formal steps to launch his bid for the White House. Garlow said Renew American Leadership, or ReAL, was founded three years ago to try to study and address the nation's troubles using Christian principles, and any ancillary benefits that came to Gingrich were inconsequential. Asked if the charity was intended in any way to serve as a stalking horse for Gingrich's future presidential campaign, Garlow said he doubted that.
"I don't think so," Garlow said. "I think he's very concerned about those issues. I heard him speak on numerous occasions, and I think he, like many Americans, including me, is very concerned with the direction of this nation. And Renewing American Leadership is one of many organizations out there attempting to address what we see as some significant drift in our nation that concerns us deeply."
Garlow said Gingrich's timing also indicated the charity was not set up to promote his presidential ambitions. "If he had announced for the presidency at that time [he had formed the charity], and been running at that time, then that would be a conflict of interest," Garlow said. "And that's why the organizations are absolutely separated right now."
The charity's tax forms indicate it has raised more than $2 million, mostly from small checks sent in response to mail solicitations. ABC News obtained samples of two different mass mailings -- requests for contributions written on Newt Gingrich letterhead and signed by the former speaker. Both letters quoted President Obama saying that America is "no longer a Christian nation" and called on donors to help Gingrich restore Christian principles in Washington. (The quote, from a 2006 Obama speech, is accurate, though the web site Factcheck.org called it misleading for Obama's critics to use the partial quote. What Obama said was, "Whatever we once were, we are no longer a Christian nation -- at least, not just. We are also a Jewish nation, a Muslim nation, a Buddhist nation, and a Hindu nation, and a nation of nonbelievers.")
The fundraising mailers, along with the web site, represent the bulk of Renew American Leadership's efforts to fulfill its non-profit mission of educating the public about the need for more religious discussion in the public arena. Garlow told ABC News he is hoping to devote more of the charity's resources to pastor training and other outreach programs, though those efforts are still in their early stages.
The thousands of dollars spent by the charity developing a mailing list with the identities and contact information for people who respond favorably to Gingrich's appeal could have ultimately helped Gingrich the presidential candidate. The list of people who responded to Gingrich's appeals by sending checks to the charity was provided to Gingrich for his future use, Tyler confirmed. Any time Gingrich signs a fundraising appeal for someone, they "must share names of donors who respond," Tyler said.
Gingrich Publisher Charged Charity 'Full Price' For His Books
Borochoff, the charity watchdog, called the notion that the charity could have handed Gingrich any part of its fundraising list an abuse.
"If in fact Mr. Gingrich is receiving [Renewing American Leadership's] list for free then this is an abuse of the American charitable organization system," he said. "Charitable organizations are not allowed to intervene in political campaigns. Generating and then giving away a list of donors, who support and share the views of a particular political candidate is a misuse of tax-subsidized, charitable resources."
Garlow said the $220,000 in payments the charity made to Gingrich Communications went not to Gingrich but to Tyler for running the day-to-day operations of the organization -- "reimbursing what he was giving to ReAL during that time, which was a lot of hours. He worked hard on it." Renew American Leadership's tax forms report that Tyler worked 20 hours-a-week at the charity and had no reportable compensation. Tyler said the payments were channeled through Gingrich's consulting firm to insure Tyler was provided health insurance.
Garlow said he did, however, complain to Tyler about having to pay "full price" for Gingrich's books and DVDs, noting that he has always been able to negotiate a steep discount when his church buys copies of his own books. "My concern was, 'Is there any way we can get these a lot cheaper?'" Garlow said. "And we couldn't, and we didn't."
Joe DeSantis, communications director for the Gingrich campaign, said Tuesday, "The only books that were sold by Gingrich Communications to ReAL were sold 'at cost' at the same discounted publisher rate at which Gingrich Communications purchased them."
Since Gingrich first began running for president, the various organizations he launched have faced greater scrutiny. There have been published reports about his extensive use of charter jet service, paid for by donors to his political organization. And there has been discussion of the sizeable contributions -- several million dollars -- Gingrich's political organization received from Las Vegas casino billionaire Sheldon Adelson. While gambling can be controversial within some circles of conservative religious voters, Adelson and Gingrich have long seen eye to eye about the country's Israel policy.
Ellen Miller, co-founder of the Sunlight Foundation, told ABC News she was surprised to discover that, in addition to all his other for-profit and political ventures, Gingrich was back in the charity business, given the ethics issues he had encountered with charity work more than a decade earlier.
"The fact that Newt Gingrich was censured for mixing political and public education type activities is what makes the founding of this organization particularly odd," Miller said. "You'd think he would learn from previous experience, which didn't turn out very well for him."
Garlow told ABC News he is a strong supporter of Gingrich and does not want to see this charity lead Gingrich back into that ethical thicket. He said he has taken pains to untangle Renewing American Leadership from Gingrich's involvement to avoid the appearance that it is endorsing his candidacy. When asked by ABC News last week why the charity continues to advertise Gingrich's books in banner ads on its website, Garlow said that was a mistake. The ads were removed the following day. Similarly, Gingrich's full-throated endorsement of Rep. Paul Ryan's economic plan, posted on the web site after Gingrich was criticized from the right for referring to the Ryan plan as "too big a jump" and "right-wing social engineering" was also pulled down after Garlow's ABC interview.
When Gingrich's staff left him in large numbers last week, one concern they raised was his lack of vigor on the campaign trail and his decision to cut away so soon after he launched his bid for a Greek cruise. But that vigor has not been lacking from his efforts to promote his books and movies. His first scheduled event back in public last week came in New Hampshire -- it was the screening of a movie produced by Gingrich Productions. Today, Gingrich's publisher is releasing his latest book.
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Key stories on the Gingrich ethics probe.
Congressional Guide: The Speaker. On the Web
January 1997 special counsel report to the House ethics committee.
House Reprimands, Penalizes Speaker By John E. Yang
Washington Post Staff Writer
Wednesday, January 22 1997; Page A01 The House voted overwhelmingly yesterday to reprimand House Speaker Newt Gingrich (R-Ga.) and order him to pay an unprecedented $300,000 penalty, the first time in the House's 208-year history it has disciplined a speaker for ethical wrongdoing. The ethics case and its resolution leave Gingrich with little leeway for future personal controversies, House Republicans said. Exactly one month before yesterday's vote, Gingrich admitted that he brought discredit to the House and broke its rules by failing to ensure that financing for two projects would not violate federal tax law and by giving the House ethics committee false information. "Newt has done some things that have embarrassed House Republicans and embarrassed the House," said Rep. Peter Hoekstra (R-Mich.). "If [the voters] see more of that, they will question our judgment." House Democrats are likely to continue to press other ethics charges against Gingrich and the Internal Revenue Service is looking into matters related to the case that came to an end yesterday. The 395 to 28 vote closes a tumultuous chapter that began Sept. 7, 1994, when former representative Ben Jones (D-Ga.), then running against Gingrich, filed an ethics complaint against the then-GOP whip. The complaint took on greater significance when the Republicans took control of the House for the first time in four decades, propelling Gingrich into the speaker's chair. With so much at stake for each side -- the survival of the GOP's speaker and the Democrats' hopes of regaining control of the House -- partisanship strained the ethics process nearly to the breaking point. All but two of the votes against the punishment were cast by Republicans, including Rep. Roscoe G. Bartlett (Md.), many of whom said they believed the sanction -- especially the financial penalty -- was too severe. Two Democrats, Reps. Earl F. Hilliard (Ala.) and Gene Taylor (Miss.), voted against the punishment. Taylor said the measure should have specified that the $300,000 come from personal funds, not campaign coffers or a legal expense fund. Hilliard did not return telephone calls. In addition, five Democrats voted "present," many of them saying they believed the sanction was not severe enough. "If Newt Gingrich did what they said he did, he should have been censured," said Rep. Maxine Waters (D-Calif.), one of the five who voted "present." A censure, second only in severity to expulsion, would have threatened Gingrich's speakership. House ethics committee members took pride in yesterday's bipartisan resolution of the case. "We have proved to the American people that no matter how rough the process is, we can police ourselves, we do know right from wrong," said Rep. Porter J. Goss (R-Fla.), who headed the investigative subcommittee that charged Gingrich. But even as they brought the case to a close, committee Republicans and Democrats traded potshots over the chaos of the last two weeks, during which an agreement for lengthy televised hearings collapsed amid partisan bickering. The ethics case added to the last congressional session's fierce partisanship, as Democrats sought to embarrass House Republicans with it in last year's elections. Lawmakers in both parties said they hope the vote to punish Gingrich will help ease those tensions. "If our action today fails to chasten this body and bring a halt to the crippling partisanship and animosity that has surrounded us, then we will have lost an opportunity," said Rep. Nancy L. Johnson (R-Conn.), ethics committee chairman. Similarly, President Clinton, when asked about the matter, said: "The House should do its business and then we should get back to the people's business." For Gingrich, it was another humbling event in a remarkable series of peaks and valleys since 1994. That year, he led his party to the promised land of control of the House and Senate, only to threaten it when he was blamed for two partial government shutdowns during the battle over the budget, making him seem reckless. Then he complained about his treatment on a long flight aboard Air Force One, making him seem petty. The GOP narrowly retained its House majority last November, giving him a brief reprieve. The next month, he admitted to the charges brought by the ethics subcommittee. The speaker was barely visible yesterday, staying away from the House floor during the 90-minute debate and vote on his punishment. He was in his office and did not watch the proceedings on television, according to spokeswoman Lauren Maddox. Gingrich left late yesterday afternoon for a two-day GOP House leadership retreat at Airlie Farm and Conference Center in Fauquier County, Va. As he left, he was asked if he was glad the case was over. He smiled broadly and said "yes." House Democrats had considered trying to force a vote yesterday on reconsidering Gingrich's Jan. 7 reelection as speaker -- the first for a Republican in 68 years -- but decided against it, fearing it would distract from the harsh punishment being meted out. In addition, Democrats believe enough damaging information has been presented to tarnish the speaker, Democratic leadership aides said. "This is not a vote on whether Mr. Gingrich should remain speaker," said Rep. Benjamin L. Cardin (Md.), the ethics panel's top Democrat in the Gingrich case. "In the days and weeks to come, Mr. Gingrich and each member of this House should consider how these charges bear on the question of his speakership." In a strongly worded report, special counsel James M. Cole concluded that Gingrich had violated tax law and lied to the investigating panel, but the subcommittee would not go that far. In exchange for the subcommittee agreeing to modify the charges against him, Gingrich agreed to the penalty Dec. 20 as part of a deal in which he admitted guilt. Johnson called the reprimand and financial penalty "tough and unprecedented. It is also appropriate," she said. "No one is above the rules of the House." The ethics committee that handled the charges against Gingrich went out of business at midnight last night without resolving complaints that the speaker received improper gifts, contributions and support from GOPAC, the political action committee he once headed. House Democrats are likely to submit those charges to the new ethics committee. In addition, the Internal Revenue Service is looking into the use of tax-deductible charitable contributions to finance the college course Gingrich taught, which was at the center of the ethics case, and the ethics committee is making the material it gathered available to the tax agency. At a closed-door meeting of House Republicans yesterday morning, the speaker noted his agreement to accept the sanction, which the ethics committee approved on a 7 to 1 vote Friday night, and said he wanted to get the matter behind him, according to lawmakers who attended. Many House Republicans said they had trouble reconciling their leaders' characterization of Gingrich's rules violations as tantamount to a jaywalking ticket and the magnitude of the penalty. "That argument loses its steam [when] you talk about $300,000," said Rep. Fred Upton (R-Mich.). Rep. Mark Sanford (R-S.C.) said that had he known what was in the ethics committee's report, he would not have voted for Gingrich as speaker. "The gray got grayer when you read the report," he said. "When I think of my three boys and what kind of example I want to set for them for leadership in this country, gray is not the example." But some lawmakers said the $300,000 financial penalty, described as a reimbursement to the ethics committee for the additional cost Gingrich caused it when he gave it false information, was too severe. "I was willing to swallow hard and vote for the reprimand, but when they add the $300,000 assessment . . . that's excessive," said House Government Reform and Oversight Committee Chairman Dan Burton (R-Ind.), one of three committee chairmen to vote against the punishment. Rep. Lamar Smith (R-Tex.), who cast the lone dissenting vote on the ethics committee, said of Gingrich's violations: "They are real mistakes but they shouldn't be hanging offenses." House Majority Leader Tom DeLay (R-Tex.) gave a spirited speech calling the penalty unwarranted. Answering those who said a speaker should be held to a higher standard of ethical conduct, DeLay said: "The highest possible standard does not mean an impossible standard no American could possibly reach." He closed by declaring: "Let's stop this madness, let's stop the cannibalism." The last phrase echoed the May 31, 1989, resignation speech of House Speaker Jim Wright (D-Tex.), who called on lawmakers "to bring this period of mindless cannibalism to an end." Wright resigned in an ethics scandal triggered by a complaint filed by Gingrich. Despite the partisanship that surrounded the Gingrich ethics case for more than two years, DeLay's speech provided the only spark of yesterday's debate. With Gingrich willing to accept the punishment, the outcome was never in doubt. Still, more lawmakers were on the floor than for the average House debate; many of them were reading Cole's report. Rep. Doug Bereuter (R-Neb.), presiding over the debate, took the unusual step of reading aloud from the House rule that admonishes lawmakers to "maintain an atmosphere of mutual respect" at all times. As they have since Gingrich publicly admitted to the charges Dec. 21, Republicans sought to minimize the speaker's misdeeds while Democrats tried to make them more sinister. Rep. Steven Schiff (R-N.M.), a member of the ethics investigative subcommittee that charged Gingrich, called the speaker's submission of false information to the panel "a comedy of errors." But Rep. Nancy Pelosi (D-Calif.) called it a "violation of trust. . . . We trust each other that we will deal truthfully with each other." Republicans also sought to portray the question of using charitable donations to finance projects that appeared to have a political intent as a matter of unsettled tax law. But Rep. Thomas C. Sawyer (D-Ohio), a member of the ethics panel, countered that "ethical behavior may be more important when the lines are blurred than when they are clear." Rep. Jim McDermott (Wash.), who had been the ethics panel's top Democrat, was among those who voted "present." He withdrew from the Gingrich case last week after being implicated in the leaking of a tape recording of a telephone conference call involving the speaker, which Republicans said was illegally made. McDermott did not return telephone calls. Staff writer Kevin Merida contributed to this report.
© Copyright 1997 The Washington Post Company Back to the top | A nonprofit charity founded by Newt Gingrich has been advancing his political causes and making payments to his for-profit businesses that it didn’t disclose on its tax forms, according to an ABC News investigation. The charity, dubbed Renewing American Leadership, paid $220,000 over the past two years to the for-profit Gingrich Communications—which went to Gingrich’s personal spokesman, Rick Tyler, who was running the charity. It also bought several cases of Gingrich's books and DVDs at full price from Gingrich Productions. The charity didn’t have to disclose any of this because though Gingrich’s face is plastered all over its website and marketing materials, he’s not technically on its board, explains the head of one philanthropy watchdog. The charity also compiled a mailing list of donors and provided it to Gingrich’s campaign for free—which the watchdog group called an “abuse” of “tax-subsidized, charitable resources.” Tyler insists ReAL “did nothing to promote anyone’s political career” and says he was paid through Gingrich Communications so he’d have health care. It’s worth noting that as speaker of the House, Gingrich was fined $300,000 for—wait for it—misusing money from a charity. The IRS later cleared him of those charges. |
Abstract More than 80 incidences of fish predation by semi-aquatic spiders – observed at the fringes of shallow freshwater streams, rivers, lakes, ponds, swamps, and fens – are reviewed. We provide evidence that fish predation by semi-aquatic spiders is geographically widespread, occurring on all continents except Antarctica. Fish predation by spiders appears to be more common in warmer areas between 40° S and 40° N. The fish captured by spiders, usually ranging from 2–6 cm in length, are among the most common fish taxa occurring in their respective geographic area (e.g., mosquitofish [Gambusia spp.] in the southeastern USA, fish of the order Characiformes in the Neotropics, killifish [Aphyosemion spp.] in Central and West Africa, as well as Australian native fish of the genera Galaxias, Melanotaenia, and Pseudomugil). Naturally occurring fish predation has been witnessed in more than a dozen spider species from the superfamily Lycosoidea (families Pisauridae, Trechaleidae, and Lycosidae), in two species of the superfamily Ctenoidea (family Ctenidae), and in one species of the superfamily Corinnoidea (family Liocranidae). The majority of reports on fish predation by spiders referred to pisaurid spiders of the genera Dolomedes and Nilus (>75% of observed incidences). There is laboratory evidence that spiders from several more families (e.g., the water spider Argyroneta aquatica [Cybaeidae], the intertidal spider Desis marina [Desidae], and the ‘swimming’ huntsman spider Heteropoda natans [Sparassidae]) predate fish as well. Our finding of such a large diversity of spider families being engaged in fish predation is novel. Semi-aquatic spiders captured fish whose body length exceeded the spiders’ body length (the captured fish being, on average, 2.2 times as long as the spiders). Evidence suggests that fish prey might be an occasional prey item of substantial nutritional importance.
Citation: Nyffeler M, Pusey BJ (2014) Fish Predation by Semi-Aquatic Spiders: A Global Pattern. PLoS ONE 9(6): e99459. doi:10.1371/journal.pone.0099459 Editor: Trine Bilde, Aarhus University, Denmark Received: December 2, 2013; Accepted: May 14, 2014; Published: June 18, 2014 Copyright: © 2014 Nyffeler, Pusey. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Funding: The authors have no funding or support to report. Competing interests: The authors have declared that no competing interests exist.
Introduction A diverse array of predators feed on fish, including piscivorous fish, birds (e.g., egrets, herons, cormorants, gulls, osprey, kites, eagles), fish-eating bats, otters, bears, snakes, certain turtles, etc. [1]–[5]. Predation by a few large arthropods, that spend all, or at least part, of their life cycle in the aquatic environment and are generally well-adapted at catching aquatic prey such as small fish, tadpoles, frogs, etc., has also been documented [6]–[7]. For example, water scorpions (Nepidae), giant water-bugs (Belostomatidae), backswimmers (Notonectidae), and water boatmen (Corixidae) are known to kill and eat small fish [7]. A caddisfly species, Plectrocnemia conspersa (Polycentropodidae), has been observed preying on fish fry [6], and nymphs of the dragonfly Cordulegaster dorsalis (Cordulegastridae) have been reported to kill fish of >2.5 cm in length [7]. Furthermore, diving beetles (Dytiscidae) and scavenger water beetles (Hydrophilidae) often predate small fish [7], highlighting the plethora of predatory arthropods with trophic interactions with freshwater fish. Another group of predaceous arthropods known to catch and eat small fish is spiders, particularly large, semi-aquatic pisaurid spiders of the genera Dolomedes and Nilus (‘fishing spiders’). The notion of fish-catching spiders is rather peculiar if we consider that spiders, as a whole, are traditionally viewed as the classic example of a predator that feeds on insects, yet some spiders are well-adapted for life near, or on, the water surface [8]. Despite the widespread assumption of spiders primarily being insectivores, piscivory is not altogether surprising considering that a number of spiders (e.g., Araneidae, Nephilidae, Pisauridae, Sparassidae, Theraphosidae, and Theridiidae) occasionally supplement their arthropod diet with small vertebrates including frogs, toads, salamanders, lizards, snakes, mice, rats, bats, and birds [7], [9]–[10] and many spiders may be found at the land-water interface. Photographic evidence supporting the existence of fish-catching by ‘fishing spiders’ has been published [11]–[13] but published accounts of open-field assessment of fish predation are often anecdotal, from very old literature sources and originate from only few locations [14]–[19]. Additionally, the majority of published photographic sources depict spiders preying upon fish in captivity [11]–[13]. More recently, evidence of the extent of fish predation by spiders in laboratory [20]–[24] and field experiments [25], suggests it is more widespread than traditionally thought. However, the propensity for spiders to feed on fish and the importance of this trophic relationship under natural conditions remains unclear. We conducted a global analysis of all available literature on fish predation by spiders and unpublished information from biologists and naturalists (arachnologists, ichthyologists, aquatic ecologists, photographers, etc.) to provide a broad, conceptual framework for this trophic relationship placed within the context of spider behavior and nutritional ecology.
Concluding Remarks It has been long-known that semi-aquatic spiders of the family Pisauridae occasionally predate small fish; however, past studies focused on just two genera of a single family (i.e., Dolomedes and Nilus [8], [163]–[164]). We found that the diversity of spider families engaged in fish predation is much higher than previously thought and encompasses at least eight spider families. Fish predation by spiders is geographically widespread but largely limited to the warmer areas between 40° S and 40° N. Semi-aquatic spiders capture a wide diversity of fish species but are constrained in the size of prey they can capture. The capture and consumption of fish by spiders represents a significant departure from the average dietary patterns and predator-prey size ratios reported in the literature and fish might be an occasional prey item of substantial nutritional importance. A better understanding of the nutritional ecology of the semi-aquatic spiders and their ecosystem role is needed.
Acknowledgments Many people have contributed to this review paper. First we wish to thank those scientists who identified fishes based on photographs - including James Albert (University of Louisiana), Jeanette Carpenter Haegele (USGS Denver Field Station), Glen Collier (University of Tulsa), Dean Hendrickson (University of Texas), Jeffrey Hill (University of Florida), Brett Johnson (Colorado State University), Frank Jordan (Loyola University New Orleans), Mark Kennard (Griffith University), Maurice Kottelat (National University of Singapore), Edith Marsh-Matthews (University of Oklahoma), Larry Page (Florida Museum of Natural History), Lynne Parenti (National Museum of Natural History), Andrew Simons (University of Minnesota), Rainer Sonnenberg (Zoologisches Forschungsinstitut Alexander Koenig), Donald Stewart (State University of New York), Melanie Stiassny (American Museum of Natural History), and Richard Vari (National Museum of Natural History). Antonio Brescovit (Instituto Butantan), Ansie Dippenaar-Schoeman (University of Pretoria), G.B. Edwards (Florida State Collection of Arthropods), Hubert Höfer (Staatliches Museum für Naturkunde Karlsruhe), Kelly Kissane (Blinn College), Astri Leroy (The Spider Club of Southern Africa), Robert Raven (Queensland Museum), Adalberto Santos (Universidade Federal de Minas Gerais), and Estevam L. Cruz da Silva (Field Museum of Natural History) identified spider species in the photographs. Tadashi Miyashita (University of Tokyo) conducted a survey among spider researchers in Japan, using a mailing list of “kumo-net”. Appreciation is also expressed to the following people who helped us in various ways: David Dudgeon (University of Hong Kong), Thierry Gasnier (Universidade Federal do Amazonas), James Harwood (University of Kentucky), Alison King (Charles Darwin University), Mirjam Knörnschild (University of Ulm), Witold Lapinski (University of Ulm), Markus Metz (University of Ulm), Dolores Schuetz (University of Bern), Helen Smith (www.dolomedes.org.uk), I-Min To (Tunghai University), and Jakob Walter (Fischzuchtanstalt Neuhausen) and of course, the many people who provided unpublished information and photographs. ||||| Adult male spider caught a Characiform near Samona Lodge, Cuyabeno Wildlife Reserve, Ecuador. (Photo: Ed Germain, Sydney, Australia)
Spiders are pretty well known as good hunters, feeding mainly on other insects. But new research is showing just how many of them are good at catching — and dining on — fish as well.
The study in the journal PLOS ONE by zoologist and spider expert Martin Nyffeler, from the University of Basel in Switzerland, and Bradley Pusey, from the University of Western Australia, documents more than 80 incidents of spiders killing fish across the world, confirming that spiders do not exclusively eat insects.
At least 18 different spider species have been observed catching fish in the wild, according to the study.
"The finding of such a large diversity of spiders engaging in fish predation is novel," Nyffeler said.
Most of these fish-killing spiders are semi-aquatic, with the ability to swim, dive and walk on the water's surface. These spiders are equipped with powerful neurotoxins and enzymes that help them kill and digest fish that can be two times their size.
To catch their prey, spiders would wait near the surface of the water on the edge of a stream with their hind legs anchored on a stone or plant and pierce the skin of the fish as it swam by with a venomous bite. The spider would then drag the fish to a dry place to begin the feeding process, which could take several hours.
"(The spiders) have evolved very potent neurotoxins (for) killing fish within seconds to minutes," Nyffeler told USA TODAY in an e-mail. "They are well-adapted for a life near and in the water."
The catches take place in every continent except Antarctica, and most occur in warmer climates. North America has the most documented incidents, especially in the Florida wetlands. Nyffeler hypothesizes that water contains lower oxygen levels at warmer temperatures, causing more fish to come to the surface to breathe and feed. This makes fish more likely to be caught by spiders who operate on the water surface.
The fish caught by spiders were all freshwater fish ranging from less than 1 inch to 2 inches long, Nyffeler said. They were among the most common fish species in their respective geographic areas, including the mosquitofish in southeastern U.S. and the killifish in Central and West Africa.
Some spiders occasionally catch other small vertebrates including frogs, toads, salamanders, lizards, snakes, mice, rats, bats and birds, Nyffeler said.
Spiders who only prey on fish are very rare and most likely restricted to areas where spiders have easy access to small fish, such as in artificial rearing ponds or small, shallow water bodies, according to Nyffeler.
Researchers still don't know the full extent of the nutritional value of fish, but it is most likely "high quality prey," Nyffeler said. The researchers hope to conduct a new study expanding on their findings.
"One of the purposes of this study was to stir up the interest among scientists for these very interesting semi-aquatic animals," Nyffeler said.
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This is an adult male of Ancylometes sp. (possibly Ancylometes rufus) that caught characiform (Cyphocharax sp.) near Samona Lodge, Cuyabeno Wildlife Reserve, Ecuador.
Spiders are most famous for dining on insects, but scientists have discovered many species of spiders who also catch and devour fish.
These spiders can be found on every continent except Antarctica, reports a new study published by zoologists Martin Nyffeler of the University of Basel, Switzerland, and Bradley Pusey of the University of Western Australia.
Although the fish these spiders eat are small by human standards – just 2 to 6 centimeters long – these fish are an average of 2.2 times the length of the spiders' bodies and up to 4.5 times their weight.
How do they do it? Fish-eating spiders are largely semi-aquatic, so they can walk on water, swim, or at least reside comfortably near water.
Some of the species observed capturing or devouring fish have included different types of nursery web spiders, wandering spiders, long-legged water spiders, and wolf spiders. Most of these are considered hunting spiders, that is, spiders that capture food without using a web.
One species of wandering spider, the Ancylometes rufus, can dive under the water for up to 20 minutes, according to the researchers. Adults can have a leg span of 20 centimeters, which helps them catch their prey underwater.
A smaller spider, the water spider Argyroneta aquatica, actually lives underwater. In a lab, researchers witnessed this spider using venom to kill fish.
Other semi-aquatic spiders hunt safely above the water. They brace themselves with their back legs, using a plant or a stone. Then their front legs are free to grab their prey.
Many of these spiders' mouths are large and strong enough to bite into the fish. The spiders use venom, sometimes containing neurotoxins specific to vertebrate nervous systems, to paralyze or kill their prey. To consume the large meal, the spiders must inject their prey with digestive enzymes that dissolve tissue.
Following capture, the spiders usually drag their prey to dry land as quickly as possible. This allows them to eat without fear of the fish slipping away. They also must find a safe spot, because it can take several hours for the spiders to eat such a large meal.
Drs. Nyffeler and Pusey compiled 89 accounts, published and unpublished, of spiders eating fish from around the world. Additionally, they contacted photographers who captured the predation and probed for more information about what they witnessed.
“Our evidence suggests that fish might be an occasional prey item of substantial nutritional importance,” said Nyffeler in a news release. Although the spiders’ diet still mainly consists of insects, fishy meals may provide a strong addition of protein. The researchers think the fish diet may be especially helpful for female spiders during mating periods, as the large meal provides much needed energy.
This isn’t the first time spiders have been found to supplement their insect-only diet with a more protein-rich meal. Some fishing spiders have been captured on video eating frogs, while other spiders have been seen eating mice, snakes or even small birds. Nyffeler coauthored a similar study last year compiling evidence from around the world that spiders catch and eat bats too. | If you aren't already arachnophobic, this might be enough to turn you: Spiders don't just hunt insects; they also like to fish, and are apparently rather good at it. So say scientists who have observed at least 18 species of spiders on every continent but Antarctica hunting and feasting on fish—and North America is home to the most documented incidents. The spiders tend to be semi-aquatic, meaning they can often walk on water or swim. While the fish they eat tend to be on the smaller end, from 0.8 to 2.4 inches long, that's still on average 2.2 times the length of the spiders themselves, and the arachnids are capable of hunting fish up to 4.5 times their weight, reports the Christian Science Monitor. One small spider, the Argyroneta aquatica, actually lives underwater. Another, the Ancylometes rufus, can dive under water for a whopping 20 minutes. Others hunt from above water, using their hind legs to cling to nearby plants or rocks. But most drag their prey to land soon after capture, with mouths big and strong enough to bite into the fish and inject paralyzing venom and enzymes that dissolve the fish into a more edible state. Spiders, it turns out, "have evolved very potent neurotoxins [for] killing fish within seconds to minutes," one researcher tells USA Today. The Monitor points out spiders have also been observed dining on frogs, bats, mice, snakes, and even small birds. (Click to read about deadly spiders hatching out of grocery store bananas.) |
RS20798 -- Taiwan: Findings of a Congressional Staff Research Trip, December 2000 January 31, 2001 Background. Elected in March 2000 with 39% of the popular vote, (1) Taiwan President Chen Shui-bian hassince faced an uncooperative legislature and has endeavored to establish a firm grip on his government. Chen'sDemocratic Progressive Party (DPP) currentlyholds only 67 seats in Taiwan's 225-member legislature, the Legislative Yuan. The Nationalist Party, orKuomintang (KMT), which lost the presidential election- the first time it has not ruled the Republic of China (ROC) - holds a plurality of 109 seats. Together, threeopposition parties - the KMT, the New Party, and thePeople First Party (PFP) - which tend to be economically and politically conservative compared to the DPP andmore inclined to consider eventual unificationwith China, have blocked, thwarted, and defied many of Chen Shui-bian's policies. Because the DPP lacksadministrative experience, many leadership postswithin the government remain filled by KMT members. Chen Shui-bian has faced several contentious issues during his first several months as President. These include: an economic downturn; labor demonstrations; Chen's anti-corruption campaign aimed at KMT vote-buying and gang-related politics ("black gold"); and PremierChang Chun-hsiung's announcement that workon Taiwan's fourth nuclear power plant, a project begun by the previous KMT government, would be halted. Opposition members have threatened to introducemotions of no confidence in Premier Chang and to recall President Chen. However, they have recently backeddown, partly in response to public demands toreduce political deadlock. Research Trip Findings. Taiwan's democracy is experiencing a period of rancor and instability as it undergoesa process of political maturation. Some Taiwanese government and party officials repeated the saying that "theDPP has not yet learned how to rule while theKMT has not yet learned how not to rule." The congressional staff delegation observed severalimportant features of Taiwan's "transition politics." One, thepolitical system lacks institutions for moderating partisanship and facilitating the transfer of power. For example,few formal and informal procedures andprecedents have been established for divided government. Two, Taiwanese political parties do not have experienceforming coalitions and creating stableparliamentary majorities. Three, voter identification tends to be unstable and unpredictable. A DPP representativeexplained that political personalities, ratherthan party ideologies, drive Taiwanese politics. An American observer stated that intra-party factionalism furtherdestabilizes Taiwanese politics. Four, the massmedia, though "free," lack traditions of objective reporting. A spokesperson for the Government Information Officestated that most mass media in Taiwan,including newspapers and television, are government- or party-affiliated and politically-biased. (2) There are no firm indications about how Taiwan's political parties will fare in the December 2001 legislative elections, although no party is expected to attain amajority in the Legislative Yuan. According to an American observer at the American Chamber of Commerce(AmCham) in Taipei, while the KMT continues towield economic clout and political influence, its popularity has continued to wane for several reasons: it has notdemocratized from within, expanded its partybase, created a compelling alternative vision for the country, or produced a charismatic leader. Background. President Chen faces some troubling economic indicators. At the end of 2000, Taiwan's stockmarket had fallen by more than 50% since Chen's election and unemployment had reached a 15-year high. (3) Taiwanese investment in the People's Republic ofChina (PRC) nearly doubled in 2000, which resulted in the transfer of many skilled and high tech jobs to themainland. According to some estimates,non-performing loans have reached 12-17 percent of all Taiwan bank loans. (4) Research Trip Findings. An expert at the American Institute in Taiwan (AIT), which conducts U.S.-ROCrelations, stated that the notion of a "troubled" Taiwanese economy is more a perception than a reality. Nonetheless,AIT officials envisioned several long-termtrends that would challenge the Taiwanese economy. These include declining exports to the United States,increasing imports from abroad if Taiwan joins theWTO, (5) greater economic competition from China,the loss of global competitive advantage of some Taiwanese export items, and falling consumer demand athome. Some American and Taiwanese economic analysts viewed China as the key to Taiwan's continueddevelopment. They told the delegation that the PRC'saccession to the WTO and direct trade, transportation, and communication between the mainland and Taiwan wouldfurther open China to Taiwanese investmentand exports. Because of a common language and culture, Taiwanese investors and traders on the mainland alreadyhave an edge over their American, Japanese,and European counterparts. However, ROC government officials stated that some restrictions on investment inmainland China were necessary in order to helppreserve Taiwanese technological superiority, economic autonomy, and political leverage. DPP Policy. The platform of the DPP has long advocated independence for Taiwan. (7) However, in hisinauguration speech of May 20, 2000, Chen Shui-bian promised that, as long as the PRC did not use military forceagainst Taiwan, he would not declareindependence. (8) Analysts have posited several factorsand considerations that may explain Chen's break from past positions and pro-independence members inhis party, including Chen's pragmatic nature, pressure from the PRC, Taiwanese public opinion, and U.S.-Chinarelations. Opposition Party Efforts. While President Chen and the PRC government have made little progress in breakingthe impasse on opening formal talks, many opposition lawmakers - up to one-third of the legislature - reportedlyhave gone to Beijing to engage in informaldiscussions on cross-strait issues. They and the PRC government have appeared eager both to resume the dialoguethat broke off in 1995 and to underminePresident Chen's role in the process. (9) Chen Shui-bianhas expressed a willingness to resume cross-strait talks, but without agreeing to the PRC's "one-Chinaprinciple" as a starting point. By contrast, opposition leaders have been more accepting of the "one-China" principleas a basis of negotiations. (10) Research Trip Findings. Taiwanese and American political experts told the delegation that following the March2000 presidential election, both the DPP and the KMT have taken more conciliatory stances toward the mainland. The KMT has downplayed former PresidentLee Teng-hui's suggested "state-to-state" framework for negotiations. The DPP has conveyed greater acceptanceof the idea that some political accommodationwith the PRC is inevitable, while the independence faction within the party has been marginalized. Severalgovernment officials privately suggested that VicePresident Annette Lu, an ardent member of the independence faction, does not enjoy widespread public support. An official at the ROC Mainland Affairs Council (MAC) stated that DPP and KMT positions on cross-straitissues have converged somewhat. Both partiessupport the "status quo" - a position of neither independence nor unification - for the time being. Both put forthdemocratization on the mainland as a conditionfor substantive moves toward greater political ties or unification. A DPP authority on international affairs cautioned,however, that the maintenance of Taiwan'ssovereignty is still a central goal of the party. He suggested that sovereignty could be achieved in two ways -through independence or a cross-strait politicalarrangement that is mandated by the Taiwanese electorate. Background. Despite the uncertain and often tense political atmosphere, cross-strait economic ties have grownconsiderably since the late 1980s. Bilateral trade was worth $25.8 billion in 1999, up 14.5 percent from 1998. Inthe first half of 2000, cross-strait trade increased29%. According to PRC data, Taiwan is China's largest source of imports. Taiwanese firms have invested anestimated $40 billion in more than 40,000enterprises on the mainland. Some analysts report that business interests on both sides of the strait are pursuinggreater economic cooperation in preparation forPRC and ROC accession to the WTO. (11) Research Trip Findings. Taiwanese leaders explained that growing economic ties with the mainland havecreated a dilemma for the new government. On the one hand, the mainland economy provides ample opportunitiesfor Taiwanese businesses. Economicinterdependence may also discourage the PRC from using force against Taiwan. On the other hand, Taiwaneseofficials worried, increased investment may causeTaiwan to lose jobs and technological know-how to the mainland. Furthermore, if the Taiwanese economy wereto become too intertwined with that of themainland, it may become vulnerable to economic shocks on the mainland or Taiwan may become beholden to PRCpolitical demands. Nonetheless, the DPP hascautiously encouraged greater trade and investment. President Chen has considered easing existing restrictions onTaiwanese businesses, which apply tolarge-scale investment, construction, and high tech manufacturing on the mainland. On January 2, 2001, the Chenadministration formally opened two ROCoffshore islands to trade and travel with the mainland as a precursor to broader direct links. (12) Research trip findings. (13) Officials of the ROC government and military establishment discussed military andpolitical solutions to the cross-strait tensions. Officials at the Ministry of National Defense raised several concerns. First, they articulated Taiwan's requirementsfor more sophisticated U.S. armaments in general. (14) Second, Taiwanese military leaders discussed their inability to fully utilize some U.S. hardwarebecause ofthe need for components, military training, and joint exercises. Third, they expected the PRC-Taiwan dialogue toresume within two years and help diffusetensions. Fourth, they expressed the desire not to unnecessarily aggravate strains in U.S.-PRC relations. ROC defense officials asserted that a mainland military attack was possible but not likely in the short-term. They stated, on the one hand, that the PRC still lackedthe capability to successfully invade the island. Furthermore, one official contended, although the PRC carried outmilitary exercises on a frequent basis, not all ofthem constituted preparation for an attack. An ROC general maintained that although the PRC White Paper ofFebruary 2000 added a condition for the PRC's useof force - Taiwan's "refusal" to enter into negotiations - it did not indicate greater imminence than before of amainland attack. On the other hand, Taiwanesedefense leaders argued that currently the mainland could pressure Taiwan through conducting missile tests, shootingdown Taiwanese fighters or sinking its ships,or taking over offshore islands. An American military specialist in Taipei concurred that although the ROC'sequipment and training were still superior to themainland's, a PRC missile attack could "wreak havoc" on the island and China's capabilities were expected toimprove substantially over the next five years. However, AIT officials suggested that the mainland's military buildup was not the only factor influencing the PRC's actions toward Taiwan. First, the PRCleadership is likely split between hardline and liberal factions. Second, the PRC leadership is torn betweenconflicting goals: the PRC government's antipathytoward foreign interference in China's "domestic affairs" and frequent exploitation of Chinese nationalism may fuelmilitaristic behavior; China's emphasis oneconomic development and aspirations for international prestige may discourage a military solution. Thus,considerations of coercive actions against Taiwan maybe checked by their perceived economic and political costs. AIT officials described the critical U.S. policyobjectives as encouraging liberal forces in PRCpolitics and raising the economic and political as well as military costs to the PRC of using force against Taiwan. Two trends have helped to stabilize PRC-Taiwan relations in the short term. First, the development of real political competition in Taiwan has encouraged themajor parties to appeal to the center of the political spectrum. Democratic politics has given strong voice sinceChen's election to the current majority view thatthe status quo in cross-strait relations should be maintained. Although Beijing, the DPP, and opposition parties maydisagree about means and objectives, thestatus quo at least allows for future talks on the issue. The timing of negotiations, however, may depend upon theoutcome of the December 2001 legislativeelections. Second, cross-strait economic ties, which have been bolstered by the prospect of WTO membership forboth sides, have raised the economic andpolitical costs of a military conflict for Beijing and Taipei. Other factors may add to tensions in the future. PRC foreign policy mishaps or social unrest stemming from economic reforms may trigger renewed governmentemphasis on Chinese nationalism. China's military modernization also bears watching. | This report summarizes findings from a congressional staff trip to Taiwan (Republicof China), December 10-17,2000, with supplemental material from other sources. The staff delegation met with Taiwan government andmilitary officials, political party representatives,leading private citizens, and United States officials and business persons in Taipei, the capital. The findings includemajor factors that have shaped relationsbetween Taiwan and the People's Republic of China (PRC) since Chen Shui-bian's election as President of Taiwanin March 2000. Taiwan's democratization andthe growth of cross-strait economic ties have, in some respects, helped to stabilize relations in the short run. Taiwan's legislative elections in December 2001 willlikely focus largely on domestic issues; its impact on cross-strait relations is uncertain. Chinese nationalism andmilitary modernization in the PRC will likelycontinue to contribute to tensions. This report will not be updated. |
On the evening of January 9, 2012, the Mexican actress Kate del Castillo poured a glass of wine, sat down at her computer, and opened Twitter. She had just returned home, to Los Angeles, after a Caribbean cruise with her sister and her parents. The previous year had been difficult: in November, her marriage to the actor and model Aarón Díaz had ended. Del Castillo had spent much of the year starring as a drug trafficker in “La Reina del Sur” (“The Queen of the South”), a sixty-three-episode telenovela on Telemundo. Her character, Teresa Mendoza, a small-town Mexican woman whose love life enticed her into the narcotics trade, was given to ruthlessly practical observations. “Life’s a business,” Teresa once said. “The only thing that changes is the merchandise.” The series had dominated ratings in the Spanish-speaking world, and made her a household name, particularly in Mexico, but for del Castillo, who is forty-three, the experience had been overwhelming; at one point during filming, she had received medical treatment for exhaustion. Now she thumbed through a few notebooks filled with song lyrics and observations, and then started typing in an app that allowed her to write longer tweets. “Today I want to express what I think, and if it suits anybody else, great,” she began, in Spanish. During the next half hour, she proceeded to free-associate on love and politics: “I don’t believe in marriage, I believe in love . . . I don’t believe in either punishment or sin . . . I don’t believe in the Pope and the Vatican and all their wealth . . . I am alive and for that I thank God every day, for who I am, for good or bad.” Then she turned to Joaquín Guzmán Loera, known as El Chapo, or Shorty—the leader of the Sinaloa drug cartel. El Chapo had escaped from prison in 2001, and had been at large since then. He was widely understood to be the most powerful drug lord in Mexico, if not the world, and was considered responsible for the deaths of thousands of people. Yet many Mexicans saw him as a populist antihero rather than as a murderer, because of his humble origins, his defiance of a corrupt and ineffective federal government, and his reputation for benevolence to Sinaloa’s poor and downtrodden. Del Castillo wrote, “Today I believe more in El Chapo Guzmán than I do in the governments that hide truths from me, even if they are painful, who hide the cures for cancer, AIDS, etc., for their own benefit. MR. CHAPO, WOULDN’T IT BE COOL IF YOU STARTED TRAFFICKING WITH THE GOOD? . . . COME ON SEñOR, YOU WOULD BE THE HERO OF HEROES. LET’S TRAFFIC WITH LOVE, YOU KNOW HOW.” She signed off, “I love you all, Kate,” pressed Send, brushed her teeth, and went to bed. Shortly afterward, Del Castillo went to Tijuana, where a friend was undergoing breast-implant surgery. In the hospital, the popular talk show “Tercer Grado” was playing on TV, and del Castillo and her friend watched as the guests took turns denouncing her tweet. Carlos Marín, the editorial director of the publishing company Grupo Milenio, was particularly savage. “This actress wrote a truly stupid thing on Twitter,” he said, “and she displays an abysmal ignorance about the problem of cancer, the problem of AIDS.” He added that this “beautiful, lovely, great actress” was “encouraging the commission of crime.” For weeks, the Mexican public obsessed over del Castillo’s tweet, debating whether she was an apologist for the cruelty and bloodshed committed in El Chapo’s name. Her father, Eric del Castillo, who is also a well-known actor, defended her to the media but then e-mailed her a line-by-line critique of her manifesto. Her older sister, the journalist Verónica del Castillo, says that she angrily reminded Kate, “You are not Teresa Mendoza.” Last month, I met del Castillo at her house in a gated community in the Brentwood neighborhood of Los Angeles. She was sitting on a sunny terrace beside an infinity pool and an array of saguaro cacti. She poured two glasses of a reposado tequila called Honor, a brand she is a part owner of. She wore tight jeans, a blouse, and very high heels, and had a small gold earring in her right lobe that read “Fuck.” “I was so upset,” she said, of the reaction to her tweet. “You know, why are they crushing me? I’m not saying all of this is true. This is just what I believe!” Four years after the fact, del Castillo still seemed bewildered. Her mother, who is also named Kate, told me, “Everything she does is that way—without thinking about the consequences.” The consequence that del Castillo had least anticipated was that the man she had addressed in her tweet might actually respond. “I find it comforting to have Off-Broadway plays in the background.”
As del Castillo tells the story, in the late summer of 2014 she received an e-mail from one of El Chapo’s associates. Through the Mexican actors’ guild, he had found her parents’ telephone number in Mexico City and told her mother that he was a movie producer who wished to speak to Kate about a project. The first messages he sent del Castillo were vague. Only when she replied that she was too busy for such inquiries did the man state his business: Soy licenciado de Señor Joaquín Guzmán Loera. (“I am Señor Joaquín Guzmán Loera’s lawyer.”) He told her that the drug lord, who had been re-arrested that February, was interested in making a movie about his life. He asked if she would come to Mexico City to discuss the prospect. (Del Castillo says that her computer has not saved these e-mails, and that she is relying on her memory of the exchange.) “I immediately said yes,” she told me. The lawyer, Andrés Granados Flores, had approached del Castillo at a propitious moment. She was in Miami, filming another “narco-series” for Telemundo. Despite the success of “La Reina del Sur,” most people in the U.S. had never heard of her. She had moved to L.A. in 2001, to break into the American movie industry. Patricia Riggen, who cast del Castillo as an undocumented immigrant in her 2007 film, “Under the Same Moon,” told me, “She went from a place where everyone knew her to a place where no one did.” She added, “I think it took a lot of courage.” For her first U.S. role, in the 2002 PBS series “American Family,” del Castillo says that she was made to dye her brunet hair black, so that she would appear more Latina. She was turned down for other roles, because her accent was too pronounced. In an effort to burnish her acting credentials, she sought out edgy roles, playing a transgender prison inmate in “K-11” and a Bolivian prostitute in “American Visa.” She also appeared in the Showtime series “Weeds,” playing a nefarious Mexican politician who is killed when she gets whacked with a croquet mallet. But such opportunities were rare. She said, “I’d go to auditions, and all the time it’s ‘You’re too Latina,’ or ‘You’re not Latina enough.’ ” Meanwhile, she continued to act in telenovelas like the one she was filming in Miami, in which she again played a wily and glamorous drug trafficker. On September 29th, del Castillo took a private plane from Miami to an airstrip near Mexico City. Before boarding, she photographed the plane’s tail number and sent it to a friend with instructions to trace the plane if she did not hear from del Castillo that evening. As she emerged from immigration, two men in suits smiled in recognition. One was Granados, who had a youthful appearance, with a wide face and close-cropped hair. Accompanying him was another lawyer, named Óscar Manuel Gómez Núñez, who was short and chubby, with a mustache. El Chapo, they said, had instructed them to take her to dinner at one of the nicest restaurants in Mexico City. Fearing possible encounters with the paparazzi, del Castillo suggested that they go to a nearby taquería instead. “Señorita, if he knows we’ve taken you to get tacos, he’ll kill us,” she recalls one of them saying. When she blanched, they laughed and assured her that they were joking. They settled on a restaurant by the highway, where they ate at a secluded table. The attorneys told del Castillo that, while El Chapo had received numerous offers from Hollywood producers, he trusted del Castillo and wanted to give her the rights to his life story. “I was, like, ‘You are kidding me,’ ” del Castillo told me. “ ‘O.K., hold on. First of all, is he interested in a movie, a book, a documentary, a series?’ They said, ‘Anything you want. He’s giving you the rights.’ ” After a minute, del Castillo asked the inevitable question: “Why me?” According to del Castillo, the lawyers replied, “Because you’re very brave. Because you’re outspoken. Because you always tell the truth, even when it’s about the government. Because you come from a great family. And because he’s a fan of yours from ‘La Reina del Sur.’ ” Del Castillo and the lawyers talked for two hours. After lunch, one of them told her, “You know what—we first tried to contact you right after you wrote on Twitter. He wanted to send you flowers.” But they were unable to find her address. In the next several months, del Castillo wrapped shooting for the Telemundo series and then, in early 2015, began rehearsals for “The 33,” a film directed by Patricia Riggen and based on the Chilean miners who were buried underground for two months, in 2010. (Del Castillo played the wife of the main character, portrayed by Antonio Banderas.) All the while, del Castillo imagined visiting El Chapo and conducting a series of interviews to develop the film project. “I was still deciding between a documentary or a movie,” she says, though his preference was clear: “He wanted a big movie, and he wanted me to star in it.” It was not clear to her what strong female roles existed in the life of El Chapo. She mentioned her new project to almost no one. One exception was an Argentine producer named Fernando Sulichin, whom she had met in early 2012, at a reception hosted by the director and screenwriter Oliver Stone. Sulichin had told del Castillo that he was a fan of her work. Later, the two had lunch at the Polo Lounge, in Beverly Hills, where del Castillo recalls Sulichin telling her, “I read your tweet. Please, please—if you ever have contact with the guy, let me know.” “Sarah has two mommies and both of them are good cooks.” After she told Sulichin about her meeting in Mexico, he introduced her to another Argentine, José Ibáñez, who had produced the Oliver Stone documentary “South of the Border” with Sulichin. She conveyed their interest to El Chapo’s attorneys. In December, 2014, El Chapo sent del Castillo a handwritten letter: Thank you so much for what you did for me, because, paisana, you did me the favor of speaking for me. Thanks, amiga, I cannot pay you back for what you did for me. I’m letting you know that I’m O.K. . . . With respect to the rights, you and my lawyers should come to an agreement. With respect to the rights, I want it to be clear that you are the one that decides everything that is done, what you want and what you don’t want. Then El Chapo referred to “Visitantes,” a Mexican horror film in which del Castillo played a doctor driven mad by apparitions: On another subject, some friends told me that they went to the movies to see a horror film you were in, amiga. They told me it’s really cool. Hopefully they’ll play it soon on some TV channel. . . . I love your acting, you really go for it. I congratulate you. I imagine acting can’t be so easy, amiga. I hope to say hello to you in person someday. Hopefully soon. Say hello to your dad, and your whole family, for me. I watch your father very often, because they show movies where he’s the main character. O.K., amiga, my respects to you. You’re a love. Thanks so much. Your friend, Joaquín Guzmán. On January 9, 2015, Guzmán signed over his story rights to Kate del Castillo, for a project to be co-produced by Sulichin and Ibáñez. A notary at the Altiplano prison witnessed his signature. Around the same time, he wrote her a second letter, in which he described his Christmas meal (turkey and Coca-Cola) and also his New Year’s Eve dinner (pork and Coca-Cola). He wrote, “I tell you, that series that you made, I saw it and I loved it. I’ve seen it many times—you’re a great actress in it. I’m referring to ‘La Reina del Sur.’ ” That one of the world’s most cunning criminals would entrust his life story to an actress he had never met would seem fantastical even in a movie. But, del Castillo told me, “maybe he thought I could understand his world, in a way.” El Chapo’s apparent conflation of truth with fiction—Kate del Castillo as La Reina—suggests a flicker of innocence. “When you meet an actor, you think you know that person really well,” Patricia Riggen said. “So I’m sure El Chapo believed he knew Kate. It’s like John Gotti saying, ‘I’ll only give my role to Al Pacino. He’s the only one who would know how to play me right.’ ”
On July 11, 2015, del Castillo attended a prizefight in L.A. with the boxer and promoter Oscar de la Hoya. Afterward, as she was having a drink at a downtown bar, a friend called and told her that El Chapo had escaped from prison, using a tunnel that ran directly to his cell. The trafficker’s attorney, Granados, later texted her, “I’m celebrating!” She responded, “Me even more.” Del Castillo insists that she was shocked by the news—her exclusive story had just vanished. When she told Sulichin that their project was now worthless, he assured her that this was not the case. “It just got juicier,” she remembers him telling her. Sulichin had been discussing El Chapo’s prison break with a friend of his, the actor and director Sean Penn. Penn was known for his interest in Latin-American politics—he had met the late Venezuelan leader Hugo Chávez and Fidel Castro’s brother Raúl—and his denunciations of the war on drugs. Del Castillo and her two producers believed that their project stood a better chance of being picked up by a film studio if a major figure in American movies, like Penn, was attached to it. When Sulichin told Penn that he knew a Mexican actress who was in close contact with El Chapo, Penn requested a meeting with her. Penn, Sulichin, and del Castillo met for lunch at Fig, a restaurant in Santa Monica’s Fairmont Hotel. Because del Castillo had an appointment early that afternoon*—she was about to take the oath to become an American citizen—she cut their discussion short. Penn did not indicate any interest in del Castillo’s movie project. Instead, referring to El Chapo, he asked, “Do you think we can go and see him?” She says that she replied, “That sounds really dangerous. The guy’s on the run, you know. But I can try.” “Ask him,” he said. Three days later, on September 25th, del Castillo flew to Guadalajara to attend a friend’s birthday. That evening, she met Granados and Gómez. They handed her a BlackBerry and told her that their boss would like to hear from her directly. In these text messages, which were later leaked to the Mexican press—not by del Castillo, almost certainly not by the drug trafficker, and therefore likely by someone inside the Mexican government—El Chapo said that she could come to the Sinaloa resort town of Mazatlán and spend a day with him at a nearby ranch. Then he wrote, “Amiga, if you’ll bring the wine, I’ll also drink yours. . . . I’m not a drinker, but your presence will be a lovely thing and I very much want to get to know you and become very good friends. You are the best in this world. . . . I will take care of you more than I do my own eyes.” Sean Penn and del Castillo pose with El Chapo. Photograph courtesy Kate del Castillo Photograph courtesy Kate del Castillo Del Castillo replied, “It moves me so much that you say you’ll take care of me—nobody has ever taken care of me, thank you! And I’ll be free next weekend!” Del Castillo then left to join her friends, while the lawyers stayed on the BlackBerry to tell El Chapo that she was planning to bring along the two producers as well as Sean Penn, “one of the most famous actors in Hollywood.” El Chapo had never heard of Penn. Gómez then explained that “he made the film ‘21 Grams’ ” and was a “political activist” who had been a critic of the Bush Administration. El Chapo did not object. The following day, the lawyers gave del Castillo a BlackBerry, so that she could contact El Chapo. They began texting again just after 11 P.M. He told her that he would be glad to welcome her and her friends. She was effusive but also strategic: “Thanks to you I’ll get to meet you—you have no idea how emotional this makes me feel. Thanks for your confidence. I’ve been putting together an important team with people who are highly respected in Hollywood. I want you to hear them out.” “Amiga,” he replied, “have confidence that everything will be fine—otherwise I wouldn’t be inviting you. I’ll take care of you, you’ll see that when you come, I’ll get to drink your tequila with you. As I told you, I’m not a drinker, but with you I’ll drink to the feeling of being together. Thanks so much for being such a fine person. How beautiful you are, amiga, in every way.’’
Del Castillo flew back to Los Angeles the next day. On October 1st, Penn came over to her house in the late afternoon. He stayed for several hours, even joining a tasting of her tequila that del Castillo was holding. He gave her his passport information so that her assistant could book a charter flight to Guadalajara the following morning. (Del Castillo wired the fee for the plane—$33,720.37—from her bank account. Penn later reimbursed her for a portion of the sum, though their memories differ on the amount.) Penn was eager to hear every detail about how she had come to form a bond with the world’s most famous fugitive. Del Castillo interpreted these inquiries as coming from a potential partner in her film project. In fact, Penn was asking as a journalist, though he was not taking notes or recording the conversation. By this time, he had contacted Jann Wenner, the founder of Rolling Stone, and told him that he was about to take a clandestine trip to meet El Chapo. Rolling Stone was struggling. In 2014, the magazine had published a story about a gang rape at the University of Virginia. After an investigation by the Columbia Journalism School determined that the article had not been sufficiently fact-checked, the magazine retracted it. Three lawsuits have been filed against Rolling Stone. Wenner assigned Penn the story, and on October 2nd del Castillo, Penn, and the two producers, Sulichin and Ibáñez, boarded an eight-seater jet in Van Nuys. Del Castillo had put together a gift package for El Chapo. It included a novel she had written, called “Tuya” (a fictionalized account of her first marriage), a book of poetry by Jaime Sabines Gutiérrez (with her personal favorites underlined), a bottle of her tequila, and two movies on DVD: “Under the Same Moon,” in which she starred, and Penn’s “21 Grams.” Penn was carrying a letter of assignment from Wenner, saying that Penn, Sulichin, and Ibáñez would be the story’s authors. (Del Castillo says that she did not know about the letter.) On the plane, Penn read “ZeroZeroZero,” the Mafia narco-trafficking best-seller, by the Italian journalist Roberto Saviano. El Chapo’s son, Alfredo Guzmán, met the group at a hotel in Guadalajara, where they left their luggage and their cell phones. At a nearby dirt airfield, they boarded two small planes. During the turbulent two-hour flight, Penn and del Castillo took turns drinking from her gift bottle of tequila to steady themselves. After they landed, in a marshy area, two S.U.V.s drove them seven hours through mountainous forest until they arrived, at about nine in the evening, at a spot near the city of Cosalá, in Sinaloa. Del Castillo saw a few run-down buildings that, it appeared, had been sparsely furnished for this meeting. El Chapo, who wore a clean long-sleeved shirt and jeans, was standing outside and embraced del Castillo immediately. The group sat outside on metal chairs around a wooden table, while several other men hovered nearby. Del Castillo pulled out the tequila bottle, apologizing for its being half-empty, and introduced her companions to El Chapo, adding, “We still don’t know what we’re going to do—a documentary or a movie.” “Whatever you want, amiga,” El Chapo assured her, smiling broadly, as he did throughout the evening. “I have a whole closet full of running clothes I never wear.” Over tacos and tequila, del Castillo and El Chapo exchanged small talk about her family and his life on the run. Then Penn asked her to translate on his behalf. He said that he was there to write a story for Rolling Stone, and that he would like to do a series of interviews with the drug trafficker. Del Castillo says that she was taken aback. Penn later said in a statement, “Kate was a valued partner in our journey, which was embarked upon with total transparency and full knowledge of our collective interests. From our first meeting, I discussed with her my intention to interview Joaquín Guzmán for an article in connection with the meeting that she facilitated. We discussed it again during the flight and the trip to Mexico with our partners.” Sulichin believes that the article was discussed on the flight to Guadalajara; Ibáñez believes that it was discussed at their hotel in Guadalajara. Del Castillo says that Penn’s claim that he told her about his idea for an article at their first meeting is “total and complete bullshit,” and that his mention of the story to El Chapo was the first she had heard of it. “This was not how I was expecting the night to be,” she told me. “But at the moment I thought, Maybe we can base the movie on this article.” For several hours, del Castillo served as translator. They discussed Hugo Chávez, the Mexican government, and Donald Trump. El Chapo seemed genuinely curious about whether the American public knew who he was. Penn told him that he would like to hang around for two more days. El Chapo replied that this was impossible. He suggested that they reconvene eight days later. Penn said that he would be happy to do so. He also offered to give their host final approval of the story. Of that decision, Wenner told the Times, “It was a small thing to do in exchange for what we got.” Throughout, El Chapo was solicitous of del Castillo—pulling out her chair for her, pouring her tequila, asking why she was not eating. “Amiga, I think you have to go to sleep,” he said, eventually. He stood, telling the others that he was going to escort del Castillo to her bedroom. As he led her down a corridor, he held her elbow. They stopped in a doorway to a room filled with several beds—one of them, presumably hers, behind a screen. She believed, she said, that El Chapo might assault her: “So I say, ‘What the fuck, I might as well say my last words.’ I told him, ‘Amigo, you know why I’m here. And you know what I wrote about you. You’re a very powerful man. And you can do a lot of good. There’s a good man inside of you. So let’s do it.’ ” “You know what, amiga?” she recalls him replying. “You have a big heart.” He gestured to the bed behind the screen. “This is where you’ll sleep,” he told her. “You’re not going to see me after this, because I don’t sleep where my guests are. It’s for their security.” He added, “Thanks for giving me one of the best days of my life.”
Penn and El Chapo never met again. A few days later, Mexican troops began conducting raids in the area. One evening in early November, del Castillo and Penn met with Ibáñez at the Beverly Hills Hotel, where he was staying. On his iPad, they filmed a video in which Penn proposed to El Chapo that he be interviewed on tape. Later, Penn sent del Castillo an encrypted e-mail with twenty-two questions for her to translate and send to El Chapo. She did so, while telling the trafficker, “After this article, we’ll begin with the movie.” On December 5th, a package from El Chapo was sent by courier from Mexico to New York, where del Castillo flew to retrieve it. Inside an envelope was a cell phone with a seventeen-minute video of the drug lord nervously and perfunctorily answering only some of Penn’s questions, which were read aloud to him by a man off-camera. Some of the questions Penn had submitted were pointed, if open-ended: whether his products “contribute to the destruction of mankind,” how he justified the use of violence, whether he regarded his business as a “cartel,” whether the Mexican government and the United States Drug Enforcement Administration were corrupt, how he laundered his money, what he thought of the movement to legalize drugs. To most of these El Chapo responded indirectly or not at all. Other, more fanciful lines of inquiry—did he have recurring dreams, how would he describe his relationship with his mother, what kind of future did he wish for his children—elicited game but uncomprehending replies. Before receiving El Chapo’s responses, Penn had begun writing an initial version of the story. Rolling Stone translated a draft into Spanish, and del Castillo sent it to El Chapo for his approval. He texted back, “Amiga, I approve.” She took this message to Penn’s house in Malibu, where Jason Fine, the managing editor of Rolling Stone, was helping him with revisions. A few realizations began to dawn on del Castillo, she says now. One was that though she and Sulichin had hoped that Penn might eventually show interest in joining their movie project, it had become clear that he had no such desire. Moreover, El Chapo had given his approval to a version of a story that was still being revised by the writer and his editor. Most of all, del Castillo had been slow to recognize the trouble that awaited her. She had been surprised when Penn told her, early on, that she should retain the services of a criminal-defense attorney. But now she did so. “Well I think you’re wonderful.” On December 19th, del Castillo spoke by phone with Alonso Aguilar Zinser, a prominent criminal-defense attorney in Mexico City. Del Castillo described in detail her interactions with El Chapo, including the meeting with Sean Penn and the imminent publication of the story in Rolling Stone. Zinser advised her that he did not think she was guilty of any crimes. He said that he would be back in touch with her after he returned from a two-week vacation. But on Thursday, January 7th, Zinser told her that he would not be taking the case, citing a conflict of interest with existing clients. (In response to my questions, Zinser did not elaborate, beyond saying that he was not representing anyone in the federal government or any of Guzmán’s associates.) That evening—the unofficial beginning of Golden Globes weekend—Penn invited del Castillo to join him and two friends for an after-dinner drink at the Sunset Tower Hotel, in West Hollywood. When she sat down, Penn handed her his phone. On its screen was the final layout of his story, “El Chapo Speaks.” In this version were details that had not appeared in the earliest drafts that she had discussed with a lawyer for Wenner Media. Penn had apparently misheard her description of how El Chapo’s lawyers had been unable to find her mailing address. Penn’s rendition in the story—“She nervously offered her address, but with the gypsy movements of an actress, the flowers did not find her”—made it seem, in her mind, that she had been encouraging Guzmán’s courtship even before a movie project had been on the table. (Penn maintains that his version is correct.) Del Castillo scrolled through Penn’s article, and, according to his friends, she gave no indication that she was upset. She says that she left the bar without reading the story in its entirety. Later, she noticed a scene that had not appeared in the version that had been sent to El Chapo. In a draft that had been sent to del Castillo around Christmas, there was a note from Fine, remarking on the long drive to see El Chapo: “DESCRIPTION FEELS A LITTLE TOO GENERALIZED. LET’S ADD MORE DETAILS OF THE RIDE, THE EXPERIENCE, THE TERRAIN, WHAT PEOPLE SAY—BLOW BY BLOW OVER THAT SEVEN HOURS.” The final version included this addition: “And then, as it seems we are at the entrance of Oz, the highest peak visibly within reach, we arrive at a military checkpoint. Two uniformed government soldiers, weapons at the ready, approach our vehicle. Alfredo lowers his passenger window; the soldiers back away, looking embarrassed, and wave us through. Wow. So it is, the power of a Guzmán face. And the corruption of an institution.” This scene, del Castillo maintains, did not occur: they didn’t go through any military checkpoint, much less one where government soldiers waved them on. Sulichin and Ibáñez, who were in the car ahead of del Castillo and Penn, also have no recollection of encountering a military checkpoint. (Penn maintains that his version is correct.) The lawyer for Wenner Media apparently did not bring up this incident to del Castillo, but a representative for Rolling Stone pointed out that she saw the final version on Penn’s phone and did not mention the discrepancy before publication.
The following day, January 8th, at 12:19 p.m., Enrique Peña Nieto, the President of Mexico, exulted on Twitter. “Mission accomplished: we have him,” he wrote. “I wish to inform the Mexican people that Joaquín Guzmán Loera has been captured.” A few hours later, Arely Gómez González, the country’s attorney general, told reporters that the government had been tracking El Chapo’s whereabouts for months, thanks in part to his interactions with people who had no obvious connection to his drug empire. Gómez said, “He established communication with actresses and producers, which is part of a new line of investigation.” When del Castillo heard that, she said, “I wanted to die.” The next morning, Gerardo Reyes, a reporter with Univision, called her. Reyes had learned from a source in the Mexican government that one of the actors the attorney general had referred to was del Castillo. She hung up on Reyes. After a second reporter contacted her, she recalls thinking, I’m calling Sean, I’m calling everybody. She told Jason Fine that her name had been leaked to the press. That evening, two days earlier than planned, Rolling Stone posted Penn’s story on its Web site. The article, which was ten thousand words long, was widely circulated, but criticism quickly followed. In the San Francisco Chronicle, John Diaz wrote, “For those of us who care about the profession, and the daily threat to our brethren who practice it in one of the most dangerous countries in the world for journalists, Penn’s scoop was nothing to envy.” On Twitter, people used the hashtag #NoSeanPenndejos—which can be roughly translated as “Don’t be stupid assholes”—to heap scorn on the actor. This January, during a lengthy interview on “60 Minutes,” Penn said, “My article has failed.” He added, “The entire discussion about this article ignores its purpose, which was to try to contribute to this discussion about the policy in the war on drugs.” “Not just a wheel, Trog, but a wheel of aged Parmigiano Reggiano!” Penn conceded that the story was what he termed “experiential journalism,” a characterization that the press picked up on. “You’re talking to the biggest criminal in the world, and you ask him if he loves his mother,” Sabina Berman, a Mexican essayist and playwright who has written extensively about El Chapo, said to me. “And you don’t ask him, O.K., is the Army working with you? Who distributes the drugs in America? Who are your partners, or are you distributing them yourself? How about the police in America, the D.E.A.—is it true that they have a pact with you? What about the heroin trade that is growing in America—is it you or is it someone else?” She added, “This was no interview. This was a publicity stunt.” Later, Fine texted del Castillo and asked if he could meet her in Los Angeles and interview her for another Rolling Stone story. “I didn’t even answer him, I was so mad,” she says.
Del Castillo “has always been impulsive and straightforward,” the Mexican TV host and clothing designer Montserrat Oliver, one of del Castillo’s closest friends, told me. During the 2000 Presidential election, she had vocally supported the opposition candidate, Vicente Fox, incurring the displeasure of her employer, Grupo Televisa. A few months after del Castillo’s initial tweet, she played a starring role in “Colosio,” a historical drama about the Mexican Presidential candidate Luis Donaldo Colosio, who was assassinated in 1994. The movie’s release coincided with the 2012 elections, and it was widely thought to have been timed to embarrass the country’s powerful Partido Revolucianario Institucional. “This time, I think it went further than what she thought might happen,” Oliver continued. “The government must be very mad at her. If I were the President and these actors come and make a fool out of me, I’d be pissed, too.” The Mexican historian and essayist Enrique Krauze told me, “There’s an immense risk in approaching a person that has done such harm with a sympathetic view. Even as a biographer, I can tell you that. I don’t care if his father didn’t like him—I’m not moved by that, any more than I’m moved by Hitler’s pathetic past. The main point is that she was talking to a mass murderer. And, in the process of doing that, reality became fiction. While travelling to see him and exchanging messages, she was living out her most outrageous and extraordinary film work.” After the capture of El Chapo and the publication of Penn’s story, it soon became evident that the Mexican government was singling out del Castillo as a target of investigation. Though El Chapo may well have exchanged texts with a number of people while in hiding, only the conversations with del Castillo were leaked to the Mexican media. In an interview with El Universal on January 19th, Attorney General Gómez said that her office was investigating del Castillo for money laundering. Gómez referred to the actress’s tequila business and to the movie project as potential areas of financial collusion with the drug trafficker. Asked if other people were being investigated in connection to the movie project, Gómez replied, “For the moment, no. The only person involved for the moment is her, and the investigation will inform us if there are other persons.” As for Penn, Gómez said only, “The federal attorney general’s office affirms that he is not being investigated for anything.” This public statement appeared to be a violation of Mexican law, which forbids disclosure of any information pertinent to an ongoing investigation, including the name of the person being investigated. Indeed, a spokesperson for Gómez declined my request for an interview with her to discuss the case, writing, “Under the guarantees of the law and of due process, we are barred from fulfilling your request.”
In Mexico, the saga of El Chapo y Kate has provided a distraction from far graver domestic issues: the unsolved disappearance, in 2014, of forty-three students in Guerrero; the deaths, that year, of an estimated eight thousand people in activity related to organized crime; the decrease in value of the peso against the dollar to all-time lows. The charges that del Castillo could face—all of which she vigorously denies—are nonetheless serious. Money laundering, for example, carries a penalty of between five and twenty-five years, and the wording of the law is unusually broad. According to one of del Castillo’s Mexican lawyers (who, fearing reprisals from the government, requested anonymity), “It’s so broad that anyone can be found guilty under that definition. As an actual example, she used the planes of El Chapo to go to their meeting.” On the advice of her attorneys, del Castillo has remained in Los Angeles. Federal law in Mexico permits the authorities to place her under house arrest, without bringing charges against her, for up to eighty days. She had been expecting to be in Mexico now, filming scenes for a new Netflix series, “Ingobernable.” It features del Castillo as Emilia Urquiza, the First Lady of Mexico, whose husband is mysteriously killed, prompting her dangerous quest for justice. A representative for Netflix told me that del Castillo will remain in the series. Epigmenio Ibarra, the creator of “Ingobernable,” said, “We thought about the series with Kate in mind for over a year now.” He added, “Through her past roles, she has redefined what a female character can be in Hispanic television.” ||||| Mexican-born actress Kate del Castillo finally spoke out at length about her and Sean Penn's meeting with then-fugitive Joaquin "El Chapo" Guzman, claiming that parts of Penn's recollection of what led to the encounter aren't true.
In an article in The New Yorker that was available online Friday, del Castillo expresses frustration over Penn's lengthy Rolling Stone article following the meeting, which she said she didn't hear about until she and Penn were in the presence of the drug lord.
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In the lengthy piece, Penn wrote that the group who traveled to meet Guzman — while he was on the run — was stopped at a military checkpoint, but allowed through when soldiers recognized Guzman's son, Alfredo Guzmán, who was traveling with the group.
"This scene, del Castillo maintains, did not occur; they didn't go through any military checkpoint," The New Yorker article, by Robert Draper, said. Two producers traveling with del Castillo and Penn also don't recall the military checkpoint, according to the article.
Sean Penn, Joaquin "El Chapo" Guzman and actress Kate del Castillo AFP-Getty Images; FilmMagic
Penn maintained to the New Yorker that his article is accurate. To The Associated Press, Penn said, "I stand by my piece."
Del Castillo also said that, while Penn maintains he told her he intended the trip to be a journalistic endeavor, she was taken aback when he told El Chapo he had been assigned a Rolling Stone story about the infamous drug lord.
Related: Who Is Kate del Castillo, And What Did She Write to El Chapo?
"From our first meeting, I discussed with her my intention to interview Joaquín Guzmán for an article in connection with the meeting that she facilitated. We discussed it again during the flight and the trip to Mexico with our partners," Penn said in a statement, according to The New Yorker.
The reason del Castillo says she traveled to meet Guzman was because he had signed over the rights to his life story to her and tasked her with creating some sort of movie, miniseries or documentary out of it.
Guzman had never met del Castillo, but was able to communicate to the outspoken actress, through his lawyers, that he admired her, The New Yorker reported.
"Maybe he thought I could understand his world, in a way," del Castillo told The New Yorker.
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Months after the actors and producers met with Guzman, he was recaptured by Mexican troops.
Mexican officials said that it was Guzman's communication with actors and producers that helped them nail down his whereabouts. "I wanted to die," del Castillo told the New Yorker.
Related: Texts Purportedly Reveal El Chapo's Eagerness to Meet Actress Kate del Castillo
Del Castillo said she was left exposed when her name was excluded from a "journalist on assignment" letter that Rolling Stone's founder gave to Penn before the trip.
But she couldn't have asked to have her name on the letter because she didn't know about the article until the group got to Guzman, del Castillo said.
Amid the investigation, del Castillo is keeping a low profile in California. She said she still plans on following through with the making of a movie about El Chapo ||||| The Diane Sawyer Special Edition of “20/20” Airs Friday, March 18 at 10:00 PM EST
The Interview with del Castillo Will Air Across All ABC News Platforms
ABC News Anchor Diane Sawyer has the first sit down television interview with actress Kate del Castillo.
Del Castillo, the woman who was at the center of the controversy with Joaquín “El Chapo” Guzmán, discusses what happened and the danger surrounding the takedown of one of the most wanted men in the world.
The Diane Sawyer special edition of “20/20” will air Friday, March 18 (10:00-11:00 p.m. EST) on ABC.
Sawyer’s special will air on all ABC News programs and platforms, including “Good Morning America,” “World News Tonight with David Muir,” “Nightline,” ABCNews.com, ABC News Radio and ABC NewsOne.
David Sloan is senior executive producer of “20/20.”
Facebook: www.facebook.com/DianeSawyer and www.facebook.com/ABC2020
Twitter: @DianeSawyer and @ABC2020
– ABC – | Kate del Castillo, the Mexican actress who befriended notorious drug lord Joaquin "El Chapo" Guzman and inadvertently aided in his recapture, gave her first major interview to the New Yorker. In the interview, she claims that actor Sean Penn lied about parts of their journey to visit El Chapo and also misled her on his reasons for wanting the visit, NBC News reports. She believed Penn was potentially interested in her movie project on El Chapo. She claims she didn't know he had actually been hired by Rolling Stone to write an article about the fugitive drug lord until they were in El Chapo's presence. It eventually became apparent to del Castillo that Penn had never been interested in her movie and was only using her for his article. She calls his claims that she knew about the article from the beginning "total and complete bullshit." She says she was frustrated with the final version of the Rolling Stone article, which was not the one sent to El Chapo for approval and included at least one scene—being stopped at a military checkpoint—she says never happened. Del Castillo tells the New Yorker she "wanted to die" after learning authorities used El Chapo's contacts with "actors and producers" to find him. Read the full New Yorker piece here. Diane Sawyer and 20/20 will have the first television interview with del Castillo on March 18, according to ABC News. |
Sharon Bialek says she came forward with her accusations against GOP presidential candidate Herman Cain after her 13-year-old son told her, "You need to tell on him."
Bialek said she got on the phone with her son the night before she came forward Monday and asked him what he thought she should do.
"He said, 'Mom, you have to do the right thing,’" Bialek told CNN this morning. "I think you need to tell on him."
"That confirmed it for me," she said. "If my son is saying it, I want to be the role model for him and for other kids growing up and set the example that this is not appropriate behavior and it starts when they're about that age.”
Bialek has accused Cain of making an inappropriate sexual advance toward her in 1997 while the two were in a car and at a time when Bialek was seeking his help in finding a job.
Asked about the criticism -- even derision -- that has been leveled at her, Bialek said "I expected it. I still knew I had to come forward."
After Bialek make the rounds of morning news shows, Cain's advisers issued a statement asking "Who is Sharon Bialek?"
The document outlined what it called her "long and troubled history, from the courts to personal finances." It contrasted that with Cain's "four decades spent climbing the corporate ladder, rising to the level of CEO at multiple successful business enterprises."
But Bialek insisted she has "nothing to gain" and a lot to lose by coming forward.
"I'm just doing this because it's the right thing to do," she said in one interview.
Bialek said she was neither paid nor offered a job to go public with her allegations. She said she waited so long to come forward because "I was embarrassed ... and I just kind of wanted it to go away."
Bialek said she encountered Cain at a tea party event earlier this year. "I shook his hand and he remembered me," she said. "He looked a little uncomfortable."
Bialek said that lawyer Gloria Allred has taken her case without charging a fee. She acknowledged in another appearance that she faced dire financial difficulties a decade ago, and that she had filed for bankruptcy protection.
"It was after the death of my mother," Bialek said, adding that she was helping her father pay medical bills and was facing the costs of a custody battle.
"Like millions of other people out there, we're struggling,” she said. “I could have actually sold my story, but I didn't (because) my whole objective is to tell the truth and also help other people out there that may have been in similar situations."
Asked about Cain's characterization of her charges as a "total fabrication," Bialek stood her ground, saying she went public because "I wanted to give him a platform to come clean, to tell the truth."
She said, "I was trying to be nice about it and it just didn't work."
Bialek expressed concern for Cain’s wife, Gloria. “What is his wife going through? That's who I feel for the most in this whole thing," she said.
Told that Cain has said his wife believes and supports him, Bialek responded: "I hope that's the case, but I have to believe that she's going through her own personal turmoil."
Bialek appeared with Allred Tuesday morning on CNN, ABC's "Good Morning America," CBS's "The Early Show" and NBC's "Today" show.
Associated Press contributed. ||||| Story highlights Kraushaar tells CNN her complaint wasn't about Cain's height remark
Cain says accusations are fabricated and intended to defeat his presidential bid
Lawyer for one accuser says there were multiple incidents of sexual harassment
Sen. Murkowski says the allegations, if true, will sink Cain's campaign
Herman Cain on Tuesday vehemently denied all sexual harassment allegations against him and said he had no memory of the first accuser to publicly describe claimed misconduct by the Republican presidential hopeful.
"They simply didn't happen. They simply did not happen," Cain insisted of the accusations of inappropriate sexual behavior, and at least one incident of alleged sexual groping, when he was head of the National Restaurant Association from 1996 to 1999.
But Karen Kraushaar, one of the women who have made allegations, told CNN Tuesday night that Cain is a "serial denier." While declining to comment on Cain's Tuesday remarks, Kraushaar said she wanted to meet with the other accusers about their cases.
At a news conference he held to respond to the latest accusation, made Monday by Sharon Bialek, a Chicago woman who once worked at the restaurant group, Cain described her as a "troubled" woman put up to making false allegations by forces trying to derail his presidential bid.
Cain said it could be the "Democrat machine" behind the allegations but added that he didn't know for sure. He also said he expected further attempts to smear his name and reputation and vowed that he would not be deterred.
"As far as these accusations causing me to back off and maybe withdraw from this presidential primary race? Ain't going to happen," Cain said.
In an earlier interview with ABC News, Cain responded "yes" when asked whether Bialek was lying when she said at a news conference Monday that Cain made an unwanted sexual advance in 1997.
Saying he didn't remember Bialek or the alleged incident, Cain added, "I have absolutely not acted inappropriately with this woman or anyone else in my entire life."
JUST WATCHED Cain denies knowing Sharon Bialek Replay More Videos ... MUST WATCH Cain denies knowing Sharon Bialek 01:12
The latest twist came as more details emerged involving two other former employees at the restaurant association who received payouts and left their jobs, reportedly after accusing Cain of inappropriate behavior.
JUST WATCHED Cain accuser: Experience like Bialek's Replay More Videos ... MUST WATCH Cain accuser: Experience like Bialek's 02:49
News reports identified one of the woman as Kraushaar, director of communications at a bureau within the Treasury Department who worked at the restaurant association from 1998-99.
JUST WATCHED Who is Gloria Allred? Replay More Videos ... MUST WATCH Who is Gloria Allred? 03:07
Kraushaar's lawyer, Joel Bennett, said Tuesday that she complained of "multiple incidents over multiple days" in 1999 "that constituted sexual harassment."
JUST WATCHED Cain's first accuser identified Replay More Videos ... MUST WATCH Cain's first accuser identified 03:37
In addition, Bennett challenged Cain's contention that he was unable to remember what Kraushaar had accused him of doing 12 years earlier. The restaurant association said at the time that it investigated the accusations and Cain denied them, Bennett noted.
At the news conference, Cain said the only complaint he could recall regarding Kraushaar involved a comment he made that she was about the same height as his wife, as he held his hand up to his chin. He said Kraushaar's complaints had been found to be baseless at the time, and the restaurant association negotiated a severance agreement with her rather than a legal settlement regarding any sexual harassment charges.
Kraushaar told CNN Chief Political Analyst Gloria Borger that the height remark was not the basis for her complaint. And, Kraushaar told CNN, she received a $46,000 sexual harassment settlement, rather than a severance agreement.
JUST WATCHED Cain accuser gives graphic account Replay More Videos ... MUST WATCH Cain accuser gives graphic account 02:47
Kraushaar said she would like to organize a joint press conference some time in the near future with some of the other women. "There is safety in numbers," she said. "It is important that it happen in one conference."
Bennett told CNN that Gloria Allred and Bialek have agreed to participate.
Cain was introduced at the news conference by Georgia attorney Lin Wood, who said the candidate is having to respond to hearsay, not admissible evidence, in the "court of public opinion."
JUST WATCHED Allred talks about client's claims Replay More Videos ... MUST WATCH Allred talks about client's claims 04:49
"He comes before you today to defend his reputation," said Wood, who represented vindicated Olympic Park bombing suspect Richard Jewell and John and Patsy Ramsey, parents of child murder victim JonBenet Ramsey. "A reputation that he has built over 40 years of being a good and decent man and a successful business person. I ask you at least afford him fairness."
JUST WATCHED Cain's case of 'he said, she said' Replay More Videos ... MUST WATCH Cain's case of 'he said, she said' 02:31
Meanwhile, a longtime friend of one of Cain's unidentified accusers said Tuesday that Cain mentioned a possible job promotion at the same time he made the accuser uncomfortable with sexual innuendo and overtures.
JUST WATCHED Friend of Cain accuser speaks out Replay More Videos ... MUST WATCH Friend of Cain accuser speaks out 02:39
The woman, who spoke on condition of not being identified, said she spoke extensively with her friend about Cain's conduct in 1998 at the time the accuser was allegedly being harassed by Cain while both worked at the restaurant association.
According to the woman, the accuser worked in government relations for the restaurant association in 1998 and told her it was well-known that Cain behaved badly.
Bialek said earlier Tuesday that a reason she came forward with her account of Cain's alleged misbehavior 14 years after the fact was encouragement from her 13-year-old son.
"He said, 'Mom, I think you need to do the right thing. I think you need to tell on him,' " Bialek said on CNN's "American Morning." "That confirmed it for me. If my son is saying it, I want to be the role model for him and other kids growing up."
Bialek's story was the first public, detailed account of alleged misbehavior by Cain. She alleged that Cain groped her following a dinner in 1997, shortly after she was laid off by the restaurant association.
Cain unexpectedly put his hand on her leg beneath her skirt and reached for her genitals and pushed her head toward his crotch after a dinner at which she sought his help finding a job, she said.
Bialek said Cain told her, "You want a job, right?" but stopped when she protested.
"I respected him. I looked up to him. And it just was shocking to me that he would use that power in such a way," Bialek said.
She didn't file a complaint at the time because she no longer worked for the association, said Bialek, who also denied wanting any money for going public, despite a bankruptcy stemming from costs related to her late mother's medical bills.
Cain vigorously dismissed the claims in an appearance on ABC's "Jimmy Kimmel Live" Monday night.
"The feelings that you have when you know that all of this is totally fabricated: You go from anger, then you get disgusted," he told Kimmel. "There's not an ounce of truth in all of these accusations."
In a written statement, campaign spokesman J.D. Gordon said there was "no record, nor even a complaint filed" to support Bialek's accusation.
Bialek's bombshell came as Cain was in his second week of battling the sexual harassment allegations that have overwhelmed his front-running campaign for the Republican presidential nomination.
Cain has come from far back to join former Massachusetts Gov. Mitt Romney atop the polls, and his campaign said it raised $2 million in the week since the sexual harassment accusations first surfaced in an October 30 report by Politico. By comparison, the campaign raised $2.8 million in the three-month quarter from June through October.
However, Republican Sen. Lisa Murkowski of Alaska said Tuesday that Cain should quit the race if the allegations against him are true.
"It takes incredible courage for an individual to come forward," as Bialek has done, Murkowski said. "So it does cause me to wonder exactly what is out there. I am concerned."
Bialek's fiance, Mark Harwood, backed her up in an interview with CNN affiliate WGN-TV.
"This isn't for fun. You don't go on a political stage and make these kinds of press conferences unless you really stand by your convictions," he said. "There was no money motive to this. She's got the same political interests as Herman Cain in terms of party, so it wasn't like there was opposing political gain here at all."
In denying all the allegations, Cain said Tuesday that he still has the support of his wife of more than 40 years.
"She knows that's not something I would do," he said.
Cain, a favorite of tea party conservatives, has risen to the top of the polls after strong performances in several debates and the release of his "9-9-9" tax plan, which sets flat 9% rates for corporate and income taxes and creates a 9% national sales tax.
He has complained that the sexual harassment allegations amount to a baseless media onslaught against his campaign.
Several unaffiliated Republican operatives said Cain must say more about the allegations, because his current message is not putting the controversy to rest.
"He needs to be upfront, forthright and get this story behind him," said Bob Vander Plaats, a leading Iowa Republican activist. The ongoing allegations, he adds, are a "test of Cain's leadership" and "a tipping point for his campaign."
Cain will be in Iowa on November 19 for an event sponsored by Vander Plaats called the Family Leader Forum. An expected 2,500 potential caucus-goers will be in attendance, and Cain will probably have to address the issue in some form.
"You cannot let this dominate the campaign," Vander Plaats said, a sentiment echoed by other analysts. He said Cain can "approach this with humility and sincerity" and people will listen. "Iowans are fair."
Allred said her client is a registered Republican and described Cain's behavior at the time to her then-boyfriend and a longtime mentor. Both have given sworn statements supporting her account, Allred said. She told CNN Tuesday that Cain and the women should testify under oath. ||||| Witness: Sharon Bialek hugged Herman Cain during Tea Party meeting a month ago By MICHAEL SNEED [email protected]
Herman Cain backstage at the recent TeaCon with Amy Jacobson shortly after Cain’s alleged encounter with accuser Sharon Bialek.
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Related Stories Cain to hold press conference on sexual harassment allegations
Updated:
The Cain Encounter ...
They hugged each other backstage in a full embrace like old friends.
She grabbed his arm and whispered in his left ear.
She kept talking as he bent to listen, and he kept saying “Uh, huh. Uh, huh.”
Huh?
“I don’t know if what she was giving him was a sucker punch, but he didn’t put his arm down while she was talking to him,” said the Sneed source.
◆The “he”... is GOP presidential contender Herman Cain, who has been accused of sexual harassment by several women.
◆The “she”... is Chicagoan Sharon Bialek, who held a news conference Tuesday as the only woman to PUBLICLY accuse Cain of sexual harassment.
◆The Sneed source ... is WIND radio co-host Amy Jacobson, who tells Sneed she witnessed the Cain/Bialek encounter a month ago while backstage at the AM 560 WIND sponsored TeaCon meeting in Schaumburg Sept. 30-Oct. 1 at the Renaissance Hotel and Convention Center.
◆Quoth Jacobson: “I had turned on TV to find out who was Cain’s accuser, and I almost fell over when I saw it was Sharon Bialek accusing Cain of groping her genitals.”
“I was waiting for Herman Cain’s ‘Accuser No. 4’ to surface — and up pops Sharon!”
“I couldn’t believe it. I was shocked.”
“I recall Sharon was hell bent on going backstage at the TeaCon convention — where she cornered him,” said Jacobson.
“I was surprised to hear she claims she did not know Cain was going to be there. Cain was expected and was late.”
Bialek told the media on Monday: “I went up to him and asked him if he remembered me. I wanted to see if he would be man enough to own up to what he had done 14 years ago.”
◆The encounter: “It looked sort of flirtatious,” said Jacobson. “I mean they were hugging. But she could have been giving him the kiss of death for all I know. I had no idea what they were talking about, but she was inches from his ear.”
◆The introduction: “It all began when I took a convention break and joined my pals at the hotel bar. Sharon was drinking Mimosas with them. She said she was a Republican, a Tea Party member, had once dated [White Sox sports announcer’ Steve Stone] and had worked at WGN radio.”
◆The rendezvous: Sharon also said she was anxious to meet Cain again and had once gone to an afterparty with him and her boyfriend years ago. But she never mentioned he had sexually harassed her.”
◆The upshot: Bialek has since applied for employment in sales at WIND radio and is scheduled for a second interview Thursday.
So it goes.
Blago beat ...
Pencils poised: Former Gov. Rod Blagojevich’s sentencing on federal corruption charges is set for Dec. 6. Watch for a Christmas request.
A Royal note...
The goods news: Prince William and wife, Kate (nee Middleton) get to move into the Kensington Palace apartment the lesser royals have always coveted: the late Princess Margaret’s digs.
◆The bad news: The rooms are painted pink and turquoise ... colors apparently loved by ladies who tipple and smoke.
The Jackson trial …
How convenient: Betcha the jury in the trial of Michael Jackson’s personal physician, Dr. Conrad Murray, relied heavily on the juror who has a degree biochemistry and medical laboratory sciences.
Sneedlings ...
Today’s birthdays: Christie Hefner, ageless; Bonnie Raitt, 62, and Morley Safer, 80, and belated wishes to Grant DePorter and Fay Saltzman. | It was Sharon Bialek’s 13-year-old son who convinced her to go public with her sexual harassment allegations against Herman Cain, she told CNN this morning. "He said, 'Mom, you have to do the right thing. I think you need to tell on him.'" As for the derision that’s followed in the wake of her statement, "I expected it," she said. But she insists she has "nothing to gain" and has not been paid even though she could have sold her story, the Chicago Tribune reports. She also acknowledged seeing Cain at a Tea Party event this year, and says she "shook his hand and he remembered me. He looked a little uncomfortable." But a source who witnessed the encounter tells the Chicago Sun-Times Cain and Bialek fully embraced as she whispered in his ear. "It looked sort of flirtatious," says the witness. "I mean they were hugging. But she could have been giving him the kiss of death for all I know." Click for more from a fifth woman who has a sketchy story about Cain. |
The dead apparently can get driver's licenses, registrations and other motor vehicle documents in New Jersey.
A state audit found that documents were obtained from the state Motor Vehicle Commission, using social security numbers of more than 300 people after the date that the federal Social Security Administration listed them as being officially deceased.
GOT QUESTIONS? Ticked off about mass transit? Wondering about road construction? E-mail your questions to Ticked off about mass transit? Wondering about road construction? E-mail your questions to NJ.com's transportation expert Larry Higgs . He'll answer your questions in an upcoming online feature. You can also Tweet @CommutingLarry
The audit of state Motor Vehicle Commission data security also found that 32 lucky people were issued documents with no expiration dates.
The review, conducted by the state auditor, found more than 6,000 motor vehicle documents where the social security number belonged to a dead person.
Most of those had been issued prior to when the person's death was reported to social security, but 56 documents had been issued after social security had been notified the person was deceased, the audit found.
The report recommended further investigation of these cases and periodic checks of driver/vehicle owner data bases. Over 8.2 million MVC records were audited. State motor vehicle officials implemented checking social security numbers for driver's licenses and other identification documents in 2003.
Many of those records that showed documents issued to deceased drivers have now been listed as "deceased," said Raymond Martinez, MVC chief administrator in a letter replying to the audit.
The MVC conducted its own check after the audit, he said. The MVC is in the process of replacing it's old mainframe computer system.
Larry Higgs may be reached at [email protected] . Follow him on Twitter @commutinglarry . Find NJ.com on Facebook ||||| The following script is from "Dead or Alive" which aired on March 15, 2015. Scott Pelley is the correspondent. Pat Shevlin and Gabrielle Schonder, producers.
It was Benjamin Franklin who wrote, "nothing can be said to be certain but death and taxes." Turns out, with taxes that may be true, but not so much with death. In America, the job of ultimately accounting for who is dead or alive belongs to the Social Security Administration which compiles something called the Death Master File. There are about 86 million names on this national list of the deceased. And it's deadly serious business because when you're added to the file, that means that banks, the IRS, Medicare, law enforcement and the like, scratch you out of existence. But we found that the Death Master File is often fatally flawed. A lot of people who pass on, don't get on the list which costs taxpayers billions of dollars in fraudulent payments to people standing in for the departed. And then, there are those who are on the Death Master File who are very surprised to hear that they're dead.
Scott Pelley interviews Americans wrongly declared dead by the SSA CBS News
Scott Pelley: How many of you have been declared dead by the federal government? All of you. You're looking pretty well to me.
This would be a séance except these are living, breathing Americans that we conjured up from around the country-- all declared dead by the Social Security Administration. Don Pilger passed away when he tried to report the death of his wife.
Scott Pelley: This is a form from the Social Security Administration. The idea was you were going to call this number and essentially report that your wife had passed.
"I was in college. I walked into the bank to open up an account and same thing. 'We can't help you.' 'Well, why?' 'You're coming up as deceased. You need to go to Social Security office.'"
Don Pilger: Exactly. And that's what I did on the following Monday. Eight days later I went to access my bank account and it was-- they kept saying, "Invalid pin." So I went to the bank and I give the lady the problem I was having. She typed my numbers into the computer and she grabbed my hand, she says, "Mr. Pilger, I don't believe this. They reported you deceased and not your wife."
Kristina Pace's life was cut short at an early age.
Kristina Pace: I was in college. I walked into the bank to open up an account and same thing. "We can't help you." "Well, why?" "You're coming up as deceased. You need to go to Social Security office." And I did. But just randomly years later it would come up. I'd want to get a car or something. "Oh no. Oh, let me guess. I'm dead?"
Betty Denault was summoned to her Social Security office where the computer read like an epitaph.
Betty Denault: And she pointed on the screen up in the corner and it said, "DOD." And I said, "What does DOD mean?" And she said, "Date of death." And I said, "Well, how did you come up with this?" And she said, "All it takes is somebody to input on the computer the wrong numbers. And it just makes a big difference, of course."
Most people never find out how it happens but when the federal computer says you're dead, you might as well be. The terrible news is relayed by the government to banks and credit agencies. Judy Rivers told us she had $80,000 in her accounts, but when she tried to use a bank card at a store, they assumed she was an identity thief.
Scott Pelley: You couldn't get access to your bank accounts. You couldn't get a credit card. How did you live?
Judy Rivers: Well, for a time I lived in my car. And I couldn't get an apartment. I had my debit cards, which were, of course, no good. I used one without knowing the consequences, and was actually taken to jail and questioned because they thought I was an identity thief.
Scott Pelley: You ended up arrested? Ended up living in your car because of all of this.
Judy Rivers: For six months.
Scott Pelley: You had been eliminated from the human race.
Judy Rivers: Cyber ghost.
Scott Pelley: Cyber ghost.
Don Pilger: Cyber ghost.
Scott Pelley and Judy Rivers CBS News
Judy Rivers now haunts a borrowed camper in Alabama and while her finances were ruined, she found that the government makes a tidy profit selling the Death Master File to credit agencies. So, word of her death was nearly immortal in dozens of databases. And it came back again and again. She protested to a credit agency called ChexSystems for what seemed like an eternity.
Judy Rivers: Finally, ChexSystems responded to me and told me to send my information in, and they would consider it, after I had sent it to 'em over 20 times.
Scott Pelley: They would consider whether you were still alive.
Judy Rivers: Correct.
We looked in the Alabama Vital Records Office for Rivers' death notice but it's not there. No one seems to know how she got in the federal Death Master File.
God may judge the quick and the dead but it's the states that collect the data. They pass it along to Social Security and there is plenty of room for error. Record bureaus get death notices from doctors, hospitals, funeral homes or families. And every state has its own rules. Perhaps because the dead don't vote, many of the states don't spend much keeping tabs on them.
This is the State of Alabama Vital Records Vault. It is a place so secure that you need a key and a fingerprint to get inside. But once in here, the technology becomes pretty 19th century. These are death certificates from 1912, for example. All in all, there are 17 million paper records in here. Now, the State of Alabama is moving toward an electronic system. And it's about 60 percent of the way there. But there's so little funding around the country for that kind of transition that there are about a dozen states in America that do not have a statewide electronic filing system for death records.
Scott Pelley: How accurate is the Death Master File?
Patrick O'Carroll: I guess, the best way to say it is as accurate as it can be.
Patrick O'Carroll is the Social Security Administration's inspector general. His office investigates how the Death Master File is used and abused.
Patrick O'Carroll: Right now, that the Death Master File has in it about 86 million records in it, and it gets about 2 million records every year from the states. And we're probably, as with everything else, as strong as the weakest link, in terms that some states are reporting electronically, have very good data. And then with other states, it's done on a more haphazard level. So again, there's going to be some falling through the cracks there.
But O'Carroll told us that live people "falling through the cracks" isn't what keeps him up at night--the much more costly problem is in the millions of Americans who do die and are not recorded.
Scott Pelley: Your office found that Social Security had no death data for 6.5 million people over the age of 111. Do you really believe that there are 6.5 million people over the age of 111 in this country?
Patrick O'Carroll: No, and in fact that's why we did the audit on it. What we were finding is that people that were over 112 years of age, were opening up bank accounts. And it got us suspicious and we found that 6.5 million was not recorded as being deceased in SSA's records.
Scott Pelley: How many people are over the age of 111 in this country?
Patrick O'Carroll: I'm thinking 10.
Most federal agencies depend on the Death Master File. So if a death isn't listed, federal payments just keep coming. We wondered what that would add up to during the course of a year, but it turns out, no one in the federal government is keeping an overall count. The best we could come up with was a few reports from individual agencies.
For example, the Department of Agriculture paid farm subsidies and disaster assistance to more than 170,000 dead people over six years. That came to $1.1 billion. The Office of Personnel Management paid dead federal retirees a little over a billion. And in 2010 alone, the IRS paid more than $400 million in refunds to the dead. Social Security doesn't know how many retirement and disability checks are cashed by the relatives of the dead like Sandra Kimbro.
Sandra Kimbro: I'm a wife, a mother, a grandmother, and now a felon.
Like a lot of people, she took in her aging, ill, mother and had a joint bank account with her. When her mother died, the disability benefits kept coming.
Scott Pelley: When did she die?
Sandra Kimbro: She died--1984.
Scott Pelley: When she died, did you report her death to Social Security?
Sandra Kimbro: I did not.
Scott Pelley: Why not?
Sandra Kimbro I thought perhaps it would have been taken care of by the funeral director at some point.
Scott Pelley: Were you surprised that these benefits kept coming to you?
Sandra Kimbro: No, not initially. Because I had had a conversation with my mom prior to her death, that I would be entitled to the benefits. So I had just assumed and went along with that, thinking that I was entitled.
Scott Pelley: And what did it come to?
Sandra Kimbro: Over a 30-year period, $160,000.
Though she took the checks for three decades, otherwise, Sandra Kimbro is no one's idea of a thief. She and her husband had good, full-time jobs through retirement, a solid middle class life, and raised two children. But then, came an unexpected call from Social Security.
Scott Pelley: The investigator from Social Security must've asked where your mother was?
Sandra Kimbro: Oh, well I explained to him immediately. I didn't try to say that she was alive. I said that she was deceased.
Social Security suspected as much because it is using a clever new tool.
Patrick O'Carroll: So, we go to Medicare and see if anybody hasn't been to Medicare for three years. And if they haven't been, we then, you know, try to go out and make a phone call to 'em, see if they're, you know, still here. Also we look at people that reach 100 years of age, and try to reach out, and see if they're, you know, doing well.
Sandra Kimbro's mother would have been 93 and hadn't used Medicare in 30 years. Kimbro was charged with theft, pled guilty, and is now looking at at least a year in prison. She spoke with us, she said, to warn others.
Sandra Kimbro: I've spent 66 years, no criminal history. Haven't done nothing wrong, lived a good life, did everything I was supposed to do, be a law-abiding citizen. And succumbed to this human error. And this is where I am. And obviously "felon" is not compatible with the other three things that I said. But it is my reality.
Inspector General Patrick O'Carroll says that Social Security is managing about 150 convictions a year, a fraction of the total. But it adds up to about $55 million in fraud.
Patrick O'Carroll: What we're tryin' to do, is get the word out there, is if you do take it, and you're not supposed to do it, we're gonna find you, we're gonna arrest you, and we're gonna get the money back.
Over the last decade, O'Carroll has made 70 recommendations to Social Security to reform the Death Master File. But he says there's little sense of urgency.
Scott Pelley: Is part of the problem here, that in Washington $50 or $100 million a year just isn't a very big number?
Patrick O'Carroll: It's interesting you bring that up, because I deal in very big numbers. About $2 billion go out every day. So when you start taking a look at percentages of $2 billion, that's what to you, me, to a general taxpayer is gonna be is extremely large amounts of money, really, percentage wise, is small, compared to what's going out every day.
As for the living who've been declared dead, Social Security told us "we... work very hard to correct errors when we learn of them."
The agency said that its error rate is only one third of one percent. But that still, adds up to about 9,000 Americans killed off by the government each year. For them, it can be a long road to resurrection. It took Judy Rivers five years. And today, she carries a few credit cards. And something else.
Scott Pelley: You carry a letter around with you--
Judy Rivers: All the time.
Scott Pelley: Everywhere you go. What does it say?
Judy Rivers: It's from the Social Security Office. And I have it updated once a month. And it says that-- who I am, what my Social Security number is, that I have been mistakenly declared as deceased in the past, and that that it's not correct. And I'm alive and well, or at least alive.
Scott Pelley: And you have that updated every month?
Judy Rivers: Every month.
Scott Pelley: Why?
Judy Rivers: Because when you get to about three months, people look at the date and say, "Well, this is old. You know, you could've died since then."
Tomorrow the U.S. Senate's Homeland Security and Governmental Affairs Committee will hold a hearing on all of this. Senators Ron Johnson and Tom Carper will introduce a bill to ensure that improper payments to the dead stop, and the living stay off the Death Master File. | Zombie apocalypse preppers in New Jersey can rest a little bit easier. A bill moving through the legislature there would prevent driver’s licenses and other DMV documents from being issued to dead people. A March 2015 audit of its Motor Vehicle Commission found that driving documents were released to more than 300 people who, according to the Social Security Administration, were dead, reports NJ.com. In response to the discovery, Assemblyman Wayne DeAngelo sponsored a bill that would require the MVC to check SSA’s records on a monthly basis. The proposed legislation was released by the Transportation Committee yesterday and moves to the House, per an NJ.com update. Unfortunately, SSA has its own issues with keeping track of who’s dead or alive. About 9,000 living people are declared deceased by the agency each year, according to a report by CBS News published in March. There are also millions of deceased persons—including about 6.5 million over the age of 111—that the office shows as still being alive. (The SSA's inspector general guesses there are actually only 10 people over 111 who are alive in the US.) And since Social Security numbers are used in just about every legal transaction, the problems at SSA pour into countless other government offices, banks, credit reporting agencies, and other life-affecting organizations. The SSA says it is working on it. "We ... work very hard to correct errors when we learn of them," a spokesperson told CBS. |
The DRA continues the TANF block grant created in the 1996 welfare reform law through FY2010. In general, TANF funding levels, rules for use of funds, and program requirements continue unchanged through FY2010. With respect to funding, there are some exceptions: Supplemental grants paid to 17 states that have met criteria of low historic grants per poor person or high rates of population growth are continued at current levels only through FY2008. TANF bonuses totaling $300 million to states are repealed. The DRA established new project and demonstration grants for promoting healthy marriages ($100 million per year) and "responsible fatherhood" ($50 million per year). The DRA makes some significant changes to TANF work participation. These changes require most states to engage more of their caseloads in activities and/or reduce cash assistance caseloads from FY2005 levels. As originally enacted and also under DRA, TANF sets minimum work participation standards that a state must meet or be penalized by a reduction in its block grant. The standards are performance measures computed in the aggregate for each state, which require that a specified percentage of families with an adult or minor head of household receiving assistance be considered engaged in specified activities for a minimum number of hours. A state must meet two standards each year: 50% of all families with an adult recipient or minor head-of-household recipient must have a work participant; and (2) 90% of two-parent families must meet participation rules. However, the 1996 welfare reform law included a caseload reduction credit , which provided that the standards were reduced one percentage point for each 1% decline in the assistance caseload that had occurred since FY1995. States were not given credit for caseload declines that resulted from eligibility changes that had occurred since FY1995, the year before enactment of the federal welfare reform law ( P.L. 104-193 ). After the federal and state welfare reforms of the mid-1990s, many states had large declines in their cash assistance caseloads. Though the rate of caseload decline varied among the states, most states received fairly substantial caseload reduction credits which reduced their effective (after-credit) TANF work participation standards well below 50%. In FY2004, caseload reduction credits were large enough to reduce to 0% the effective (after-credit) work participation standard for 18 states. The DRA revises the caseload reduction credit, so that states will receive credit only for future caseload reductions. Effective in FY2007, states will only receive credit for caseload reductions that occur from FY2005 forward. The FY2007 credit will be based on caseload declines (if any) that occur from FY2005 to FY2006; the FY2008 credit will be based on caseload declines that occur from FY2005 to FY2007 and so on. As under prior law, states are not given credit for caseload declines that occur because of eligibility changes that occurred from the base year for measuring caseload changes; the base year will be FY2005 under the DRA. The TANF program was created in 1996 by consolidating three programs that provided matching grants to states, with the federal government funding approximately 55% of expenditures made in these predecessor programs. TANF requires states to meet a maintenance of effort (MOE) requirement, which is to spend, from their own funds, at least 75% of what they had spent in FY1994. State spending to meet the MOE need not be in the TANF program, but must be for needy families with children and for the same types of activities allowed under state TANF programs. Under the 1996 law, most TANF requirements, including the work participation standards, did not apply to families receiving assistance under separate state programs (SSPs): programs with expenditures countable toward the MOE but designated by the states as outside the TANF program. States used SSPs to, among other things, assist two-parent families, which freed them from the 90% standard applicable to that part of the caseload; operate "Parents as Scholars" programs for recipients attending college; and assist special populations such as families with a disabled member, permitting them to be exempted from work requirements without negatively affecting participation rates. The DRA requires that states count families in SSPs in determining their work participation rates. The major impact of this change is that states will have to meet a 90% standard for the two-parent portion of its caseload. This change will also subject special populations to the TANF work participation standards and, together with the HHS regulations defining TANF work activities, affect states' ability to allow recipients to attend college without negatively affecting work participation rates. Though the 1996 welfare reform law established TANF participation standards, minimum hours requirements, and a list of 12 categories of activities that count toward meeting the standards, much of the detail in operating and enforcing these standards was left to the states. The DRA required HHS to issue regulations to "ensure consistent measurement of work participation rates" by further defining TANF work activities beyond the current statutory list; requiring uniform methods for reporting hours of work; and determining the circumstances in which parents must be included in the work participation rate calculation. The HHS regulations were issued in interim, final form on June 29, 2006. Table 1 , at the end of this report, shows the specific work activities that may be included in each of the 12 federal statutory categories, as defined by HHS. These definitions prohibit states from counting participation in a four-year college degree program as vocational educational training. They also provide that activities such as substance abuse and mental health counseling may be counted as a "job readiness activity," countable together with job search for up to six weeks (12 weeks under some circumstances) in a fiscal year. Additionally, the HHS regulations also include requirements that activities be "supervised," many on a daily basis. The DRA requires states to have procedures to verify recipients' work participation, which identify who is subject to or excluded from work standards, how recipients' activities represent countable TANF work activities, and how reported hours of work are verified. HHS regulations require states to submit a description of these procedures in a state work verification plan. Preliminary work verification plans were due to HHS on September 30, 2006; final plans are due on September 30, 2007. Under the 1996 welfare reform law, all child-only TANF families (families where there are no adult recipients) were excluded from the work participation calculation. The DRA required that the HHS regulations specify the types of families with parent caretakers that should be included in or excluded from the participation rate. HHS regulations specifically exclude from the participation rate immigrant parents who are ineligible for assistance (with citizen children eligible for assistance). It allows states to make a case-by-case determination of whether to include in the participation rate a parent receiving Supplemental Security Income (SSI). Other nonrecipient parents must be included in the participation rate, particularly affecting parents removed from the assistance unit because of a time limit or sanction. These regulations do not affect the status of non-recipient, nonparent caretakers, such as grandparents, aunts, and uncles caring for children, who are exempt from the work participation standards. The regulations also allow states to exclude parents caring for a disabled family member from the participation rate calculation. From FY2002 through FY2005, mandatory child care funding for the Child Care and Development Block Grant has been set at $2.717 billion per year. The DRA increases mandatory child care funding to $2.917 billion per year for FY2006 through FY2010, an increase from current levels of $200 million per year or $1 billion over five years. The DRA establishes new categorical grants within TANF for healthy marriage promotion and responsible fatherhood initiatives. As originally enacted and continuing under DRA, TANF law allows states to use block grant and MOE funds for activities to further any TANF purpose, including promotion of the formation and maintenance of two-parent families. However, state expenditures in this category have generally been small. The healthy marriage promotion initiative is funded at approximately $100 million per year, to be spent through grants awarded by the Secretary of HHS to support research and demonstration projects by public or private entities; and technical assistance provided to states, Indian tribes and tribal organizations, and other entities. The activities supported by the healthy marriage promotion initiatives are programs to promote marriage to the general population, such as public advertising campaigns on the value of marriage and education in high schools on the value of marriage; education on "social skills" (e.g. marriage education, marriage skills, conflict resolution, and relationship skills) for engaged couples, those interested in marriage, or married couples; and programs that reduce the financial disincentive to marry, if combined with educational or other marriage promotion activities. The DRA requires applicants for marriage promotion grants to ensure that participation in such activities is voluntary and that domestic violence concerns be addressed, including through consultation with experts on domestic violence. Additionally, the DRA makes available up to $50 million per year for responsible fatherhood initiatives. These initiatives will be funded through competitive grants made by HHS to states, territories, Indian tribes and tribal organizations, and public and nonprofit community organizations (including religious organizations). Responsible fatherhood initiatives are defined as including activities to promote marriage; teach parenting skills through counseling, mentoring, mediation, and dissemination of information; support employment and job training services, and develop and promote media campaigns and a national clearinghouse focused on responsible fatherhood. (See CRS Report RL31025, Fatherhood Initiatives: Connecting Fathers to Their Children , by [author name scrubbed] for more on these initiatives.) | The Deficit Reduction Act of 2005 (DRA, P.L. 109-171 ) includes a scaled-back version of welfare reauthorization. More extensive versions were considered during the preceding four-year debate. (See CRS Report RL33418, Welfare Reauthorization in the 109 th Congress: An Overview , by [author name scrubbed], [author name scrubbed], and [author name scrubbed] for details.) The DRA extends funding at current levels for basic state grants under the Temporary Assistance for Needy Families (TANF) block grant through Fiscal Year (FY) 2010. It requires most states to either raise participation in work activities among families receiving cash welfare from TANF or further reduce the cash assistance rolls. DRA also required the Department of Health and Human Services (HHS) to issue regulations to define activities countable toward work participation standards and set rules for state enforcement and verification of participation in activities. These regulation were published on June 29, 2006. The DRA also extends Child Care and Development Fund (CCDF) mandatory funding through FY2010, increasing mandatory child care funding by $200 million per year from previous levels (a total increase of $1 billion over five years). The DRA further establishes $100 million per year in TANF research and technical assistance funds for "healthy marriage promotion" initiatives and $50 million per year for "responsible fatherhood initiatives." This report will not be updated. |
CHCS is a comprehensive medical information system that Defense has developed to provide automated support to its military medical treatment facilities. As shown in figure 1, the system is multi-faceted and complex, composed of nine integrated modules and shared capabilities, such as order-entry, results retrieval, and electronic mail. The modules are used to create and update the integrated patient database, which can be accessed by all authorized users. We describe the CHCS shared capabilities and modules in more detail in appendix II. CHCS supports high-volume workloads generated by numerous physicians and other health care professionals using the system simultaneously and enhances communications within and among medical treatment facilities. In acquiring CHCS, Defense awarded a contract to Science Applications International Corporation (SAIC), in March 1988, to design, develop, deploy, and maintain CHCS. This contract recently completed its eighth and last year and ended on February 29, 1996. CHCS has become an important part of Defense’s inpatient and outpatient medical operations. From the time a patient is admitted into a medical facility to the time of discharge, CHCS records information on the patient’s condition and treatment and makes it available to physicians, nurses, and technicians. For example, CHCS establishes a medical record as a new patient registers at the facility. As the results of tests that physicians order (as well as other patient information) are entered into CHCS, they become immediately available for medical care decisions. Further, if medication is prescribed, CHCS, in processing the prescription, checks it against the patient’s medical record for potentially dangerous medical interactions. CHCS is also integral to Defense’s implementation of Tricare, its nationwide managed health care program. Defense’s goals for the Tricare program are to improve access to high-quality care while containing the growth of health care costs. Tricare, which is being implemented over a 3-year period, calls for coordinating and managing care on a regional basis using all available military hospitals and clinics supplemented by contracted civilian services. The Managed Care Program submodule of CHCS is the application through which active duty members and beneficiaries choosing the health maintenance organization option will be enrolled in Tricare. Tricare managers will use CHCS to assign enrolled beneficiaries to primary care providers from either the military medical treatment facility or the civilian provider network. CHCS will also assist Tricare managers in maintaining the provider network and scheduling appointments with military and/or civilian network primary care providers and specialists. Finally, CHCS is critical to measuring Tricare’s success because it enables managers to track enrollment and disenrollment in Tricare. To assess Defense’s actions relating to CHCS deployment and operations, we met with program officials at the Office of the Assistant Secretary of Defense for Health Affairs and CHCS program officials at Defense, as well as contractor officials at the following eight medical treatment facilities: Walter Reed Army Medical Center, Washington, D.C.; National Naval Medical Center Bethesda, Maryland; 89th Medical Group, Andrews Air Force Base (AFB), Maryland; 20th Medical Group, Shaw AFB, South Carolina; Moncrief Army Community Hospital, Ft. Jackson, South Carolina; Naval Medical Center Portsmouth, Virginia; 1st Medical Group, Langley AFB, Virginia; and McDonald Army Community Hospital, Ft. Eustis, Virginia. We also contacted CHCS program officials by telephone and mail at the following nine CHCS medical treatment facilities: Naval Hospital Great Lakes, Illinois; Darnall Army Community Hospital, Ft. Hood, Texas; Tripler Army Medical Center, Honolulu, Hawaii; Eisenhower Army Medical Center, Ft. Gordon, Georgia; Blanchfield Army Community Hospital, Ft. Campbell, Kentucky; 59th Medical Wing, Lackland AFB, Texas; 96th Medical Group, Eglin AFB, Florida; 81st Medical Group, Keesler AFB, Mississippi; and 82nd Medical Group, Sheppard AFB, Texas. To assess Defense’s continuing efforts to address past problems, we examined (1) Defense’s August 1994 Performance Management Plan Version 5.0, (2) Defense’s August 1993 deployment plan, Implementation and Use of the CHCS, (3) Defense deployment schedules through October 4, 1995, (4) monthly progress reports provided to Defense by the CHCS contractor through December 1995, (5) Defense’s May 1995 report on VAX/PC system sizing algorithms, (6) Defense’s June 1995 report on high-end system sizing algorithms, and (7) Defense’s July 1995 report on the high-end computing platform for CHCS. We met with CHCS users to ascertain their use of and satisfaction with CHCS, and to observe CHCS in operation. In addition, we reviewed Defense documentation relating to the results of CHCS operational tests. We also received formal briefings from Defense on projects and programs related to CHCS, such as Defense’s Clinical Integrated Workstation project, Defense’s managed health care program, CHCS’ Benefits Realization Improvement Program, and Defense’s Pacific Medical Network project. We worked closely with and briefed senior CHCS program officials at Defense to discuss our concerns as they arose and to confirm our understanding of potential problems and their implications for the achievement of CHCS objectives. We requested written comments from the Secretary of Defense. They were provided by the Assistant Secretary of Defense for Health Affairs and are incorporated as appendix I. At the end of 1995, Defense completed deployment of CHCS to 526 of its 815 medical treatment facilities worldwide. CHCS deployment involved the installation of computer equipment and software to carry out CHCS outpatient and inpatient functions. Given the complexity of the design and development of CHCS and the number of facilities involved, this was not an easy task. Key to the successful development and deployment of CHCS has been the leadership provided by the Deputy Assistant Secretary of Defense for Health Services Operations and Readiness and the CHCS program manager and their application of a set of fundamental information management practices that we refer to as best practices. With worldwide deployment, Defense can realize the full benefits of CHCS, such as the time savings associated with physicians having immediate and facility-wide access to patient information. Instrumental to the successful development and deployment of CHCS worldwide has been Defense’s application of some of the best practices of leading private and public organizations for strategic information management. For example, it has been shown that the involvement and commitment of line management are crucial to making information management decisions and implementing projects. Over the past 5 years, the Deputy Assistant Secretary of Defense for Health Services Operations and Readiness, as the chief executive for the CHCS project, obtained such line management involvement and commitment by (1) promoting tri-service (Army, Navy, and Air Force) representation within Defense’s CHCS Program Office, and (2) engaging the support of the military department surgeon general organizations, which oversee Defense’s medical treatment facilities. The Deputy Assistant Secretary also appointed an experienced and knowledgeable CHCS program manager, who was instrumental in (1) sustaining program momentum, (2) ensuring that CHCS was developed and tested in increments, thereby mitigating the impact of large-scale software development problems, and (3) instituting a set of performance measures relating to hospital operations and medical outcomes to help guide overall program direction. Successful organizations also manage information systems as investments rather than expenses. Two key attributes are: (1) linking information system decisions tightly to program budget decisions and focusing them on mission improvement, and (2) using a disciplined process of postimplementation reviews—based on explicit decision criteria and quantifiable measures assessing mission benefits, risk, and cost—to select, control, and evaluate information systems projects. Defense has issued policies implementing the above two attributes. Also, the CHCS program has consistently followed these policies, which require the continuous involvement of senior Defense program, financial, and information resources management officials. For example, in order to proceed into the various system development phases (analysis, design, programming, testing, validation, and implementation), the CHCS program manager had to submit justification to and obtain approval from Defense’s Major Automated Information Systems Review Council. This justification, which included documentation, such as a functional economic analysis,served as (1) a record of system approval by senior Defense officials and (2) input to Defense’s planning, programming, and budgeting process. Finally, successful organizations have competent line and information management professionals, and ensure that their skills and knowledge are kept current. For example, both the CHCS program and deputy program managers were required to complete the comprehensive, advanced program management training offered by the Defense Systems Management College (DSMC). They also must remain current in their clinical areas by satisfying necessary continuing professional education requirements. Defense currently projects total benefits of $4.1 billion to be derived from using CHCS. This amount exceeds Defense’s $2.8 billion estimated system life-cycle cost by $1.3 billion. Of the total benefits amount, 83 percent represents savings attributed to increased productivity and direct cost offsets. Productivity increases would come from improved scheduling and improved access to patient information. For example, under Defense’s prior paper-based systems, physicians would order tests on paper and the results would be maintained in a patient’s paper medical file. Physicians and other health-care providers would then have to search for either the medical file or some item that was expected to be in the file. With CHCS, this information is now entered directly into the computer and is available to every authorized system user. Health-care providers can review the test results as soon as they are entered into the computer, without having to search through paper documents, thus saving staff time. Similarly, the patient saves time, as fewer visits are unproductive due to missing information. Direct offsets include dollar savings derived from not operating the paper-based systems used prior to CHCS and from expected decreases in malpractice claims. For example, CHCS users and officials told us that because the automated CHCS records contain complete information on the patient’s allergies and medications, fewer incidents of adverse patient reactions to drugs are expected. In the past 4 years, we have issued several reports identifying problems associated with CHCS design and implementation, such as Defense’s lack of an acceptable method for physicians to enter inpatient orders into CHCSand weaknesses or deficiencies in Defense’s tools and methodology for managing CHCS performance. Defense is addressing these concerns. Defense originally envisioned that under the CHCS inpatient order-entry process, physicians would directly key in instructions to nurses and technicians for the treatment of hospitalized patients. Defense’s intent was to eliminate the (1) costs associated with other staff entering physicians’ orders into CHCS and (2) errors in the data other staff entered because of misinterpretations of physicians’ handwriting. In September 1991, we reported that the inpatient order-entry capability in CHCS was not considered user-friendly by many physicians because entering conditional and complex orders into CHCS took much more time than writing out the orders by hand. As a result, many physicians resisted using the inpatient order-entry features of CHCS, electing to write out their orders by hand and to have other staff enter them into the system. Further, Defense deactivated the inpatient order-entry capability at all but two of its medical treatment facilities pending further development and testing. Defense has performed extensive analysis in the past 4 years to address the inpatient order-entry problem. It issued a request for proposals to solicit commercial inpatient order-entry-system solutions in February 1992. By mid-1992, it had developed basic requirements for an inpatient order-entry capability. Defense’s analysis of those requirements led it to conclude that in order to provide physicians with this capability, it needed to develop a clinically-oriented graphical user interface (GUI). Defense is currently building a prototype GUI. This prototype, once successfully completed, should enable physicians to access computer screens or windows containing icons that represent activities such as ordering or modifying patients’ prescriptions, and ordering inpatient laboratory tests. It is intended that physicians will be able to look up inpatient data, review inpatient laboratory test results, and perform many other tasks by clicking on a few icons and selecting items from a few menus. The GUI is being developed to enable physicians to use CHCS more efficiently, thereby reducing the possibility of errors in the system due to data-entry mistakes and reducing costs associated with having other staff enter physicians’ orders. Defense expects to complete an operational version of this GUI during 1996, as part of the Clinical Integrated Workstation project. In July 1994 we reported that the tools Defense was using at its CHCS sites to measure performance did not collect all the data it needed to detect response-time problems, diagnose their causes, and determine their significance. Defense also lacked modern performance analysis tools that would help it determine the causes of response-time problems and project the impact on response time of changes in workload and/or system configuration. In addition, we reported that Defense’s methodology for managing CHCS performance was weak. The methodology did not require routine analysis and elimination of extremely long response times that occur sporadically, but relied instead on user complaints to initiate review and resolution of such problems. At that time, we also found that Defense’s method of determining reserve CHCS capacity was unreliable and might have resulted in either excessive capacity, thereby incurring unnecessary cost, or insufficient capacity, thereby leading to unsatisfactory system performance. Since our July 1994 report, Defense has modified several existing CHCS performance measurement and analysis tools and has purchased additional ones. These tools enable Defense to measure system response times and determine which CHCS system resources (for example, memory and disk drives) are causing the response-time problems. Appendix III describes in more detail Defense’s on-going efforts to address deficiencies in its performance management tools. In addition, Defense has taken steps to strengthen its methodology for managing CHCS performance. Specifically, Defense has (1) updated its performance management plan to include procedures for investigating and correcting extremely long response times and (2) improved its measures of system reserve capacity by developing performance simulation models for each CHCS computer platform that forecast computer resource capacity requirements. Defense’s current backup and recovery plan at CHCS facilities contains provisions for (1) backup copies of CHCS software and databases to be stored in other buildings, (2) critical CHCS functions to be performed manually in emergency situations, and (3) access to emergency backup generators and related equipment if power is lost. However, the plan lacks policies and procedures for the rapid repair or replacement of CHCS equipment damaged in a disaster, such as an earthquake, fire, accident, or sabotage. If the computer room housing a hospital’s CHCS hardware were heavily damaged by a disaster, users would likely suffer serious, potentially prolonged disruptions in computer service. Sound information system controls require agencies to ensure that they are adequately prepared to cope with disaster. A current, tested, and reliable backup and recovery plan is essential to ensuring that Defense can restore CHCS operations and data should disaster strike. According to Defense officials, their initial strategy with respect to recovery of CHCS equipment was reactive: to wait until a disaster struck before determining how best to repair or replace damaged equipment. They cited as justification for this stance: (1) the low probability of a serious disaster affecting CHCS that would not also affect the host hospital’s entire operations, (2) the costs associated with adopting a more proactive method, and (3) the sufficiency of reverting to manual methods during periods of CHCS downtime. We disagree with this justification. Regarding Defense’s first point, CHCS now operates, for the most part, in a regional environment, where a single CHCS host facility supports one or more geographically remote satellite CHCS facilities. In this regional configuration, each host maintains an automated central patient record that is accessed by satellite facilities on demand. A disruption in CHCS operations at a host facility due to a fire, for instance, which destroys the computer room (whether or not it also destroys the rest of the hospital) will disrupt operations in every satellite facility connected to that host. Concerning Defense’s second point, CHCS program office officials have recently stated that improvements in technology—better, faster, and cheaper computer equipment—may now make it possible for them to adopt a more active plan for repairing or replacing damaged CHCS hardware at a reasonable cost. Finally, with respect to Defense’s third point, health-care providers at CHCS facilities told us that they have become so dependent on the patient information in CHCS that they would experience great difficulty reverting to manual methods during an extended CHCS downtime. For example, CHCS currently provides medical treatment facilities with the capability to perform drug interaction screening, which cannot be done as effectively by a human relying on memory or reviewing paper documents as it can by the computer. We discussed our concerns with CHCS program office officials on several occasions. In recent meetings, they said they are reviewing Defense’s CHCS backup and recovery plan to address rapid repair or replacement of damaged CHCS equipment. As the backbone of Defense’s medical operations, CHCS will provide personnel with almost instant access to patient information, from medical history to current treatment and vital statistics. With CHCS, Defense can make significant improvements in the way its medical treatment facilities operate: It can lower the cost and improve the quality of its health care delivery, and better address the needs of its patients, physicians, nurses, and other system users. Patients’ access to health care has increased with better appointment availability through improved scheduling. Physicians and nurses have experienced time savings in the delivery of medical care with improved access to patient information. If Defense is to realize all of CHCS’ potential, however, it is critical that CHCS be available to physicians and other health care providers when needed. While Defense’s backup and recovery plan provides for recovery from disruptions in computer service due to power outages, the plan does not effectively address recovery from major disruptions requiring the repair or replacement of CHCS equipment damaged as a result of disaster. Health care providers have become dependent on the patient information in the system, so any major disruption in the availability of that information could result in injury or even loss of life. This risk would be greatly minimized if Defense had a more effective backup and recovery plan for CHCS equipment. We recommend that the Secretary of Defense direct the Assistant Secretary of Defense for Health Affairs to develop, test, and implement Defense-wide policies and procedures for the rapid repair or replacement of CHCS equipment damaged in disasters. In commenting on a draft of this report, the Department of Defense stated that it fully agreed with the report. Defense concurred with our recommendation to implement policies and procedures for the rapid repair or replacement of CHCS equipment damaged in disasters. Specifically, the CHCS Program Office, in coordination with the Office of the Assistant Secretary of Defense for Health Affairs, tasked a commercial vendor during January 1996, to prepare a requirements analysis and recommendations. These would enable Defense to implement policies and procedures for continuity of operations and recovery from disasters for the Military Health Services System-wide infrastructure. We are sending copies of this report to the Chairmen and Ranking Minority Members of the House and Senate Committees on Appropriations, the Secretary of Defense, and the Director of the Office of Management and Budget. Copies will also be made available to other interested parties upon request. Please contact me at (202) 512-6252 or William Franklin, Director, at (202) 512-6234 if you have any questions concerning this report. GAO has been monitoring and reporting on CHCS since August 1985. We conducted this latest evaluation from June through December 1995, in accordance with generally accepted government auditing standards. Major contributors to this report are listed in appendix IV. CHCS is composed of several shared capabilities—such as order-entry, results retrieval, and electronic mail—and nine modules. The modules provide access to an integrated electronic patient database, which facilitates collection and input of data at the point of care. This supports integration of the patient care process and immediate availability of patient information to any authorized system user. The following sections describe the CHCS shared capabilities and each CHCS module. Capabilities shared by most CHCS modules include order-entry, which allows the entry of patient orders by health-care providers and ancillary support personnel; results retrieval, which allows direct access to test results performed under any module; and electronic mail, which allows users to communicate with each other. The Dietetics module manages the order and delivery of patient dietary instructions. The Clinical module manages orders for patient care and the retrieval of test results. It contains checks against the patient’s medical record for risks and contraindications, and issues a warning if necessary. The Laboratory module manages data associated with clinical and anatomical pathology, and blood/chemical tests. This includes ordering tests, processing specimens, documenting test results, and supporting quality controls. The Patient Administration module manages the registration of patients and their medical records. The Patient Appointment and Scheduling module manages appointment schedules for clinics and health care providers. Its Managed Care Program submodule supports enrollment, provider network management, and health care finder activities. The Pharmacy module manages the ordering and filling of prescriptions. It checks for drug interactions and allergies, while providing an automated inventory control capability. The Radiology module manages the ordering and scheduling of diagnostic, radiologic, nuclear medicine, and radiation therapy testing as well as the reporting of test results. The Medical Records and Image Files Tracking module manages and tracks patient medical records and images. The Quality Assurance module supports the identification and documentation of recurring problems related to patient care, and tracks their solutions and resolutions. It also provides management of provider case lists and training to support the credentialing process. In our previously cited July 1994 report, we identified deficiencies in Defense’s CHCS performance management tools. These deficiencies are summarized below, along with Defense’s ongoing efforts to resolve them. First, Defense’s Performance Monitoring Tool did not use a representative sampling of CHCS functions in measuring system response time experienced by system users. Defense now recognizes that additional user functions need to be included in its sampling. It is currently conducting engineering analyses to determine how many additional user functions should be measured. Second, Defense’s Option Audit tool only measured system component use by option (i.e., a menu item that a user selects, such as “Enter/Maintain Lab Orders” or “Lab Order Entry/Login”), rather than at the user-function level. Defense is now modifying this tool to enable it to measure system component use at the CHCS user-function level, collect data on the frequency with which system users employ various CHCS functions, and measure system-component use for CHCS interfaces. Defense expects these modifications to be completed during 1997. Third, Defense did not have adequate tools for the PC-CHCS UNIX platform. It has since modified the Performance Monitoring Tool and Option Audit to support performance monitoring and analysis of PC-CHCS systems. In addition, CHCS performance engineering staff evaluated five commercial-off-the-shelf UNIX performance measurement tools, and recommended obtaining two of them: Olympus TuneUp for site-level performance monitoring and analysis and Stallion Technology Monitor for evaluation and analysis of the performance impact of changes to CHCS software. Last, we reported that Defense did not have adequate modeling tools for its CHCS systems. It has since acquired the SES Workbench simulation modeling tool, and developed performance simulation models for all CHCS configurations, including the VAX, Alpha, and PC systems. These simulation models allow Defense to project the impact of workload growth and system configuration changes on response times. Defense recently used one of the models to project the impact of the CHCS software version 4.4 upgrade on system response time at CHCS facilities. According to Defense, the changes to response time predicted by the model were close to the actual changes resulting from the upgrade. Defense Health Care: Issues and Challenges Confronting Military Medicine (GAO/HEHS-95-104, March 22, 1995). Defense’s Composite Health Care System: Background Briefing for the Staff of the Senate Committee on Appropriations, Subcommittee on Defense (March 17, 1995). Defense’s Composite Health Care System: Background Briefing for the Staff of the Senate Committee on Armed Services, Subcommittee on Force Requirements and Personnel (February 14, 1995). Defense’s Composite Health Care System: Background Briefing for the Staff of the House Committee on National Security, Subcommittee on Military Personnel (February 14, 1995). Medical ADP Systems: Defense’s Tools and Methodology for Managing CHCS Performance Need Strengthening (GAO/AIMD-94-61, July 15, 1994). Composite Health Care System: Outpatient Capability Is Nearly Ready for Worldwide Deployment (GAO/IMTEC-93-11, December 15, 1992). Medical ADP Systems: Composite Health Care System Is Not Ready To Be Deployed (GAO/IMTEC-92-54, May 20, 1992). Medical ADP Systems: Changes in Composite Health Care System’s Deployment Strategy Are Unwise (GAO/IMTEC-91-47, September 30, 1991). Medical ADP Systems: Composite Health Care System: Defense Faces a Difficult Task (GAO/IMTEC-90-42, March 15, 1990). Defense’s Acquisition of the Composite Health Care System (GAO/T-IMTEC-90-04, March 15, 1990). Medical ADP Systems: Composite Health Care System Operational Tests Extended (GAO/IMTEC-89-30, April 10, 1989). Medical ADP Systems: Analysis of Technical Aspects of DOD’s Composite Health Care System (GAO/IMTEC-88-27, July 11, 1988). Medical ADP Systems: Composite Health Care System Acquisition—Fair, Reasonable, and Supported (GAO/IMTEC-88-26, March 4, 1988). Medical ADP Systems: Composite Health Care System Operational Test and Evaluation Costs (GAO/IMTEC-88-18BR, January 28, 1988). ADP Systems: Concerns About DOD’s Composite Health Care System Development Contracts (GAO/IMTEC-87-25, June 8, 1987). ADP Systems: Concerns About the Acquisition Plan for DOD’s Composite Health Care System (GAO/IMTEC-86-12, March 31, 1986). The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) Composite Health Care System (CHCS), focusing on: (1) DOD efforts to complete deployment of CHCS to military medical treatment facilities worldwide; (2) DOD efforts to address previously identified problems; and (3) a new CHCS operational issue. GAO found that: (1) DOD completed deployment of CHCS to 526 medical treatment facilities worldwide, which was difficult because of the system's complexity and the number of sites involved; (2) two DOD officials ensured the deployment's success by providing leadership and using fundamental information management practices; (3) DOD expects CHCS benefits to exceed its costs by $1.3 billion over the system's expected life; (4) CHCS should improve scheduling, give greater and quicker access to patient information, and increase the timeliness of medical care; (5) DOD has made progress in addressing its two previously identified problems by developing a prototype clinically oriented graphical user interface to make patient order-entry less cumbersome and strengthening the tools and methodology needed to manage CHCS performance; (6) DOD has updated its CHCS performance management plan and developed performance simulation models for each CHCS computer platform; (7) the lack of an effective plan for rapidly repairing or replacing CHCS equipment damaged by disaster remains a problem; and (8) DOD did not address this problem because of cost concerns and a lack of accurate information, but it is reconsidering its options for providing equipment adequate backup. |
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Medical professionals estimate dying patients will live twice as long as they actually do, according to a new study.
The research reportedly found doctors and nurses tended to put a positive spin on their answer when asked the big question by terminally ill patients.
Patients were on average given 44 days to live but only ended up living for 25 days, it was reported.
(Photo: Getty Images)
The study, analysing 12,000 prognoses in 42 studies, came as researchers attempted to focus on what they call is "the lost skill of prognoses".
This was because so many illnesses were now curable and medical professionals instead focused on diagnosis and treatment.
The Times reported that some doctors were only accurate 23 per cent of the time while others had been incorrect by three months.
The University College of London's Paddy Stone, who oversaw the research, told the paper it was a natural desire to give patients hope.
(Photo: Getty)
However, the downside to the problem was patients were not being given long enough to prepare.
"Doctors are likely to put a positive spin on when they give information to patients," he said.
The errors identified ranged from an underestimate of 86 days to an overestimate of 93 days, The Clydebank Post reported.
It added that more experienced or older doctors were not any better at predicting when somebody will die than their younger counterparts. ||||| 1/37 Cannabis extract could provide ‘new class of treatment’ for psychosis CBD has a broadly opposite effect to delta-9-tetrahydrocannabinol (THC), the main active component in cannabis and the substance that causes paranoia and anxiety. Getty
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14/37 Ketamine helps patients with severe depression ‘when nothing else works’ doctors say Ketamine helps patients with severe depression ‘when nothing else works’ doctors say Creative Commons/Psychonaught
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36/37 NHS agree, after loosing legal battle, to fund HIV prevention drug Having lost the legal battle over who was to pay for the drug the NHS have finally agreed to fund the HIV prevention treatment. National Aids Trust, whom Princess Diana supported, said that it was a ‘pivotal moment’. Getty | If you're given a terminal prognosis by your doctor and you ask how much longer you have left, chances are, you'll get an overestimate of your remaining days on Earth, a new overview of research finds. Doctors and nurses apparently dread having to give patients bad news, the Times reports, and the study finds that doctors and nurses give estimates that end up being nearly double the amount of time patients actually have left. The analysis looked at 42 studies involving more than 12,000 prognoses and found that, on average, patients were told they had 44 days left to live when, in actuality, they only lived for 25 more days, the Mirror reports. Researchers found that some doctors were off by as much as 93 days (the largest overestimate) or 86 days (the largest underestimate); some only had a 23% accuracy rate. "Doctors are likely to put a positive spin on when they give information to patients," and that's problematic when patients aren't given enough time for any end-of-life planning, a lead researcher explains. Experienced doctors were found to be at just as much risk of incorrect prognoses as younger doctors, the Independent reports. (Take a look inside the real world of end-of-life care.) |
The Congress has urged VA and DOD to work together to maximize the efficiency and effectiveness of federal health care resources they use for pharmacy and other services. In May 1982, the Congress passed the VA and DOD Health Resources Sharing and Emergency Operations Act (P.L. 97-174), which generally encouraged the two departments to enter into agreements to share health care services. Beginning in the mid-1990s, the Congress increasingly emphasized that the departments cooperate in the purchase and distribution of pharmaceuticals. A 1999 report by a congressional commission concluded that VA and DOD should combine their market power to get better pharmaceutical prices through joint contracts. More recently, the Veterans Millennium Health Care and Benefits Act (P.L. 106-117) required VA and DOD to submit a report on how joint pharmaceutical procurement can be enhanced and cost reductions realized. Finally, the Veterans Benefits and Health Care Improvement Act of 2000 (P.L. 106-419) included a provision encouraging VA and DOD to increase to the maximum extent consistent with their respective missions their level of cooperation in the procurement and management of prescription drugs. VA and DOD have been able to reduce spending on drugs by establishing formularies. VA and DOD can increase their savings by using one or more of the lower cost drugs from their formularies in drug classes that they have determined are therapeutically interchangeable—that is, essentially equivalent in terms of efficacy, safety, and outcomes. In these cases, VA and DOD place restrictions on providers’ choice of drug, by classifying a drug class as either closed or preferred. In the closed classes, VA providers must prescribe and pharmacies must dispense the selected drug, instead of therapeutic alternatives. Case-by-case exceptions for nonformulary prescriptions are allowed. VA has classified about 2 percent of the classes on VA’s national formulary as closed or preferred. VA obtains more favorable prices for some drugs in the closed classes by competitively awarding contracts that guarantee companies a high volume of use. In preferred classes, VA and DOD providers and pharmacies are encouraged to use the preferred drug but may prescribe or dispense other drugs in the same class without obtaining an exception. VA has been able to control costs by encouraging their providers to use drugs on their formulary without having adverse effects on health care quality, according to an Institute of Medicine (IOM) study. The IOM study noted that formularies are a key part of modern health care systems and that VA’s formulary was well managed and not overly restrictive. IOM recommended that VA continue to prudently establish closed and preferred classes of drugs on its formulary and to use more contracts to carefully limit drug choices in more classes, based on quality and cost considerations. VA and DOD have been successful in using a number of purchasing arrangements to obtain substantial discounts on prescription drugs (see table 1). For the bulk of their pharmaceutical purchases, VA and DOD obtain favorable prices through the Federal Supply Schedule (FSS). By statute, in order to be able to obtain reimbursement for drugs for Medicaid beneficiaries, manufacturers must offer their drugs on the FSS. The FSS schedule prices are intended to be no more than the prices manufacturers charge their most-favored nonfederal customers under comparable terms and conditions. In 1999, about 81 percent of VA and DOD’s combined $2.4 billion in drug expenditures was for drugs bought through the FSS for pharmaceuticals. VA and DOD also buy some brand name drugs for prices less than those listed under the FSS schedule. For example, by statute VA and DOD can buy brand name drugs at a price at least 24 percent lower than the nonfederal average manufacturer price (NFAMP), which may be lower than the FSS price for many drugs. In addition, VA and DOD have obtained some drugs at lower than FSS prices through national contracts with a single manufacturer based on a competitive-bid process. VA and DOD may solicit competitive bids for therapeutically equivalent drugs and may select one winner based on price alone for exclusive or preferred use on their formularies. These competitive processes for formulary drugs result in prices that average 33 percent lower than FSS prices. VA has used consolidated mail outpatient pharmacy (CMOP) centers to reduce dispensing costs. CMOPs reduce costs through economies of scale. Specifically, CMOP automated technologies have enabled each full- time CMOP employee to dispense between 50,000 and 100,000 prescriptions annually, compared to about 15,000 prescriptions dispensed by VA pharmacy employees. According to VA, such productivity rates are several times greater than traditional hospital and clinic systems. As a result of these automated technologies, VA estimated that its dispensing cost per prescription for CMOPs was approximately $2.00 in fiscal year 2000. VA and DOD are currently working on a pilot demonstration to test the feasibility of DOD using VA’s CMOPs to assume refill prescription workload from military pharmacies. In addition to reducing dispensing costs, additional benefits could result because VA’s CMOPs have reduced the pharmacy workload of VA hospital and clinic pharmacies. Between 1996 and 2000, the CMOPs have increased their prescription processing by 30 percent per year. Instead of patients receiving prescriptions from VA hospitals or clinics, the CMOPs process and mail out the prescriptions. Patients generally receive their medications by mail within 4 days of their orders going from the VA medical facility to a CMOP. As a result of this reduction in pharmacy volume at VA hospital and clinic pharmacies, VA can potentially operate with fewer pharmacists and other staff, free-up more of pharmacists’ time to counsel patients, and reduce waiting times for beneficiaries in VA hospital and clinic pharmacies. While VA and DOD have obtained prices that are better than the FSS through negotiating contracts, they have secured additional savings through joint procurement. In 2001, VA and DOD estimated substantial savings from current and planned joint procurements of pharmaceuticals—about $170 million per year. The departments can exert considerable leverage when they commit to buy increased volumes of particular generic or brand name drugs that are interchangeable in efficacy, safety, and outcomes. For example, from October 1998 through April 2000, VA and DOD awarded joint contracts for 18 products, which accounted for about $62 million in combined drug expenditures in fiscal year 2000. Although these drugs accounted for just 1.9 percent of the departments’ combined $3.2 billion drug spending in 2000, VA and DOD estimate these joint procurement discounts achieved sizeable cost avoidance—about $40 million in 2000. Most VA and DOD joint procurements have been for low-cost generic drugs. VA and DOD have experienced difficulties in joint contracting for brand name drugs because limiting beneficiary choice requires gaining clinical agreement on therapeutic equivalence of competing drugs. Due to the complexity of the care issues and the need to garner clinical acceptance and support, VA and DOD can take as long as a year between the date their respective class reviews establish therapeutic equivalence of competing brand name drugs and the date a contract is awarded. Generic drug contracts do not require drug class reviews—since competing products are already known to be chemically and therapeutically alike— and, therefore, take less effort and time—about 120 days. VA and DOD have demonstrated that in a few cases, with flexible arrangements, they can procure brand name drugs at maximum discounts while still allowing one or both departments to preserve drug choice. For example, DOD negotiated a blanket purchase agreement (BPA) to receive the same price as VA’s contract price for Zoladex—a 33-percent discount off of old prices for the leutinizing hormone–releasing hormone (LHRH) class of anticancer drugs. In return, DOD has agreed to the preferential use of Zoladex to treat a subset of DOD’s population—adult prostate cancer patients. However, the BPA does not limit providers’ choice in prescribing LHRH drugs for women and children. VA and DOD face continuing challenges to reduce future drug costs. One of the most important challenges is the joint procurement of brand name drugs. VA and DOD officials state that it is more difficult to restrict brand name drugs on their formularies than generic drugs. As discussed earlier, garnering clinical support and provider acceptance on certain brand name drugs is more difficult because of the scientific reviews needed to gain clinical agreement on therapeutic equivalence of competing drugs. As a result, most VA and DOD joint procurements have been for low-cost generic drugs. However, because brand name drugs make up a far higher share of expenditures than generic drugs, the financial benefit of more joint procurement of brand name drugs is much greater. For example, VA’s brand name drug purchases are 36 percent of volume but 91 percent of expenditures. The joint purchase of brand name drugs is further complicated due to the significant differences between the VA and DOD health care systems. These include differences in patient populations. VA serves mostly older men, while DOD also serves younger men as well as women and children. VA and DOD officials state that different populations result in dissimilar patterns of drug use and demand among their respective beneficiaries, resulting in fewer opportunities to combine drug requirements and solicit joint contracts. However, increasing numbers of military retirees and expanded DOD benefits are lessening differences between VA and DOD drug needs. In fiscal year 2000, close to 70 percent of military pharmacies’ drug costs was for retirees’ prescriptions. Another difference between the two systems that complicates joint procurement efforts is the scope of VA’s and DOD’s formularies. In 2001, VA’s national formulary listed about 1,100 drugs for inpatient and outpatient care representing 254 classes, while DOD’s basic core formulary listed 175 drugs for outpatient care in only 71 classes. VA’s national formulary was supplemented by 22 regional formularies of its health care networks. In addition, DOD’s hospitals, its national mail pharmacy, and its retail pharmacy networks maintain their own separate formularies. The different scope of the formularies complicates VA and DOD’s efforts to find overlap between the formularies. In an effort to address differences in DOD’s formularies, the Congress passed legislation in 1999 requiring DOD to establish a uniform drug formulary by October 2000, applicable to both military pharmacies and TRICARE retail and mail- order pharmacies. DOD issued a proposed rule to establish a uniform formulary in April 2002, but this rule has not been finalized. Finally, differences in prescribing patterns of providers further complicate joint procurement. DOD is concerned about its ability to control private- provider prescribing practices and persuade these providers to prescribe drugs contracted under joint procurements. Unlike VA beneficiary prescriptions, which are almost all written by VA providers and dispensed by VA pharmacies, DOD beneficiary prescriptions are written by both military and private providers and dispensed by both military and retail pharmacies. For example, about half of the 52 million prescriptions dispensed by military pharmacies in fiscal year 2000 were written by nonmilitary providers treating DOD beneficiaries. VA and DOD have faced continuing pressure on their health care budgets from rapidly rising pharmacy costs. As in the private sector, these costs have risen faster than overall health care spending for the two departments. VA and DOD have taken a number of actions separately and jointly to attempt to restrain pharmacy costs. These actions include the establishment of formularies, use of different contract arrangements to purchase drugs, use of mail-order pharmacies, and use of joint procurement. Nonetheless, VA and DOD face continuing challenges as pharmacy cost pressures continue unabated. One of these challenges is to increase joint purchasing of brand name drugs, which account for most pharmacy costs. To do this, the two departments need to address how differences in their respective patient populations, national formularies, and practice patterns among prescribers, some of whom are private physicians, can be managed to facilitate joint purchasing. Effectively doing so will be crucial for both VA and DOD to maintain control of their overall health care budgets. Mr. Chairman, this concludes my prepared remarks. I will be pleased to answer any questions you or other members of the Subcommittee may have. For further information please contact me at (202) 512-7101 or James Musselwhite at (202) 512-7259. Thomas Walke also contributed to this statement. | The Department of Veterans Affairs (VA) and the Department of Defense (DOD) pharmacy expenditures have risen significantly, reflecting national trends. The increase in pharmacy costs would have been even greater if not for the efforts taken by VA and DOD. GAO identified four important factors that have contributed to reduced pharmacy spending by VA and DOD. First, the two departments have used formularies to encourage the substitution of a lower-cost drug that is determined to be just as effective as a higher-cost drug. Second, VA and DOD have been able to effectively employ different arrangements to pay for or purchase prescription drugs at substantial discounts. Third, VA has significantly reduced the cost of dispensing prescription refills by using highly automated and less expensive consolidated mail outpatient pharmacy (CMOP) centers to handle a majority of the pharmacy workload instead of VA hospital and clinic pharmacies. Fourth, VA and DOD have reduced costs by leveraging their combined purchasing power by jointly buying prescription drugs. Nevertheless, one of the most important challenges is the joint procurement of brand name drugs. Although brand name drugs account for the bulk of prescription drug expenditures, most of VA/DOD joint contracts have been for generic drugs. Generic drugs are easier to contract for because these products are already known to be chemically and therapeutically alike. Contracting for brand name drugs is more difficult because of the scientific reviews needed to gain clinical agreement on therapeutic equivalence of competing drugs. Joint purchasing of brand name drugs is also more difficult due to the significant differences between the VA and DOD health care systems in patient populations; national formularies; and prescribing patterns of providers, some of whom are private physicians. |
Some story lines just never get old -- star-crossed lovers, mistaken identity, lizard men from outer space.It's impossible to tiptoe around the main plot device of ABC’s “V” -- those aliens may be smart and purty but they're up to no good -- because it is, of course, a remake of the 1983 miniseries . And even if it weren't, writers Kenneth Johnson and Scott Peters have infused the pilot with as many sly sci-fi references as CG special effects.'V': The review of the television series "V" in Tuesday's Calendar section said the pilot was written by Kenneth Johnson and Scott Peters. As the writer of the original miniseries, Johnson was given a "story by" credit. Peters wrote the pilot. Also, the review referred to a character delivering a message in English, French and Egyptian. The language of Egypt is Arabic. —Which are pretty terrific, as is the pilot in general. Although fans of the first "V" may find themselves longing for Richard Herd's Supreme Commander in his jaunty jumpsuit and funky glasses, this "V" is not only sleeker, faster and more visually gripping, it promises to be thematically more compelling.Its opening sequence is a masterpiece of back-story compression. What appears to be a temblor startles a series of characters (and an almost flawless cast gathered from various sci-fi hits): Erica Evans ("Lost's" Elizabeth Mitchell) is an anti-terrorism agent with the FBI and divorced mother of Tyler (Logan Huffman), a basically decent but rebellious teen. Chad Decker (Scott Wolf from "Party of Five") is a newscaster who aspires to do more than "read the news"; Father Jack Landry (Joel Gretsch of "The 4400") is a young priest working among the homeless; and Ryan Nichols (Morris Chestnut) has just purchased the engagement ring he hopes to offer Valerie (Lourdes Benedicto).All of their plans are put on hold, however, when the quake turns out to be the arrival of an enormous spaceship, one of a matched set now hovering over all the major cities of the world. But even as the throngs prepare for the requisite scream-flee-and-die scene of mass hysteria, the underbelly of the craft becomes a screen and the lovely Anna ("Firefly's" Morena Baccarin) assures everyone in flawless English (and French and Egyptian) that "the Visitors" are here to offer technology in exchange for a few undisclosed but very renewable resources, and they come in peace.Undone by relief, Anna's Audrey Hepburn haircut and the promise that the Visitors can cure 65 of our diseases, humans, or at least New Yorkers, neglect to consider that they are a renewable resource themselves. Like the gullible little oysters in "The Walrus and the Carpenter," they quickly embrace the "V's," signing up for theme-park-like tours of the ship and, of course, merchandising like crazy.Fortunately, not everyone is convinced. Father Jack preaches caution only to be assured by his pastor that the pope is on board with the V's. Erica worries that "terrorist chatter," though down among many groups, shows one major spike -- one cell seems to be arming itself pretty heavily, planning an attack, she assumes, when everyone is distracted by the aliens.A mysterious old friend is harassing Ryan to man up now that "they're here," but it's Chad who gets the clue to the real nature of the V's. Anna asks him to be her first interviewer only to insist that he not ask anything that might cast her in a bad light. Being a good-looking, ambitious newscaster in a television show, Chad, of course, agrees.The original "V" drew obvious connections between the Visitors and the Nazis, and much has been made over the possible anti-Obama sentiment of this "V." The instant adoration, the attractiveness and rhetorical skills of Anna, the idea that the Visitors will woo us with universal healthcare and then destroy us all seem a right-wingish take on the president's ascendancy.Perhaps that is the creators' intent, but most successful science fiction contains an element of, if not outright humor, then the absurd. That the human race will be enslaved not through brainwashing or firepower but adequate healthcare is pretty hilarious in a dark and almost possible way. And Anna and her crew seem to embody more of a Wall Street deregulated/Bernie Madoff mentality -- big returns for minimum investment. And we all know how that turns out.Just like we all know how these "we come in peace" alien invader tales turn out -- a resistance forms to slowly but surely reveal the Visitors for who and what they are. (Kids, lock up your guinea pigs!) Along the way, they find a sympathetic alien or two, which leads inevitably to interspecies breeding (lizard babies rock!) and the deconstruction of the essence of humanity.But just because something's a chestnut doesn't mean it isn't worth watching. There is a reason we tell the same story over and over again. Our collective longing for an effortless happy ending provided, whether by a political administration, a religious leader or a bunch of dulcet-toned aliens, is humanity's Achilles' heel.As the plot of "V" progresses, no doubt we will see the subtle strangulation of democracy by fascism -- already the press has been corrupted -- and that is a story that cannot be told often enough. Especially when it comes, like the V's, in such a fine, fun and attractive package. ||||| In fact, their planet is actually a lot nicer and cleaner than ours, because they spent all their time making scientific and technological advances instead of poisoning their delicate ecosystem with carbon emissions and spray tans and "Two and a Half Men" reruns.
Besides, how rude is it to show up at someone's galactic doorstep without inviting them to your solar system first? Of course they say they're in desperate need of our valuable resources, because it sounds a lot better than admitting that once they mastered quantum physics and nanotechnology and the like, they got bored and decided to tool around the universe, looking for fun ways to fuck shit up.
Aliens are so alienating. They're from planets in galaxies far, far away, for one thing. Most of us don't even like people from Nevada. And they're so smug about having figured out light-speed travel faster than we did. Who wants friends who make you feel bad about yourself all the time? I think poor, lonely George Clooney knows the answer to that one.
But don't confront them -- if decades of sci-fi movies have taught us anything, it's that aliens respond to direct confrontation by sucking our brains out of our ears. Just smile and say, "It was so nice of you to drop by! Please, take a few dozen silos of partially hydrogenated soybean oil when you go – we'll never finish them by ourselves."
We are of peace
With all of that preening and posturing and spreading terror throughout the universe that aliens do, it's incredible that they come from a world of serious scholars and scientists. Did they do all the hard work centuries ago, only to devolve into a land of idle troublemakers and slithering intergalactic playboys? This is why I'm all worked up over ABC's "V" (premieres 8 p.m. Tuesday, Nov. 3). Its aliens not only swoop down and hover over our major metropolises, scaring the living daylights out of us with their dulcet newscaster tones and their big, honest brown eyes, but they claim they can share the cure to some of our deadliest diseases, clean up our polluted planet, make our corn dogs taste better and keep outdoor malls from installing those hideous statues of ugly, badly dressed children frolicking happily in water fountains or taking up valuable bench space.
Hold on a minute. These aliens can cure cancer, but they can't hide their lizardy faces better than that? I've seen Nixon masks more convincing than the one that alien is wearing in the trailer. These visitors (as they call themselves) have been here for years, but we didn't even know about them? What have they been waiting for? Why didn't they just take over Oprah and control our minds through her a long time ago?
"They've been printing fake docs -- passports, IDs -- best fakes I've ever seen," says Erica Evans (Elizabeth Mitchell from "Lost") in a scene from the pilot (and featured in the trailer above). So the aliens want to cause "worldwide instability" in a secret plot aimed at the "extermination of every man, woman and child on the face of this Earth"… by printing fake IDs? Why don't they just suck all of our brains out of our ears right now and call it a day? Then tomorrow they can wake up, snort up several tons of crystal meth, and spend the afternoon at Disneyland without waiting in any lines.
But does anyone care if "V" is believable or not? No way. We just want these aliens to be a little bit different than the last imaginary aliens we met. We want that moment in the first episode where Anna (Morena Baccarin), the TV spokesmodel of the alien invaders, instructs news pretty boy Chad Decker (Scott Wolf) before an interview, "Just be sure not to ask anything that would paint us in a negative light." We want to relive that moment, which is creepy and suspenseful, over and over again.
What we don't want, and what we get, is talk of "building a resistance." Building a resistance is tiresome and pointless, it's ground that's been thoroughly trampled by "Invasion of the Body Snatchers" and "Terminator" and "Independence Day" and "Battlestar Galactica" and "Star Wars," and, hell, "Reds." Ragtag bands of grass-roots rebels gathering in secret warehouses to plan how to take down a much larger and more powerful foe? If Han Solo isn't getting called a scruffy-looking nerf herder, I want no part of it.
You've heard by now about "V's" unnerving tendency to borrow phrases from the Obama campaign to hint at the skin-deep emptiness of the aliens' catchphrases. And yes, like Obama, the "visitors" are fine-looking and poised and friendly and just too good to be true. They talk about the "V Ambassador Program" and other populist tricks to lure the masses into drinking their poisonous alien Kool-Aid. The show even premieres on the anniversary of President Obama's election, and ABC previously planned to skywrite big red Vs over the nation's major landmarks as a publicity stunt, all of which might lead to paranoid suspicions that ABC itself is run by sneaky but well-groomed aliens.
The original 1984 TV miniseries "V" concerned fascism, and we might just be willing to encounter these big, obvious parallels as some form of cultural commentary, if they were more intelligently laced into the series. Sure, it's a nice touch, having Erica's teenage son, Tyler (Logan Huffman), all starry-eyed over the hot alien babes with their unconditional positive regard and their promises that Tyler can finally be a part of something bigger and more exciting than the latest version of "Grand Theft Auto." Yes, they are frightfully fake and shiny, with their flashy ships and their relentlessly optimistic Scientology-speak. It's not hard to understand why Tyler or any teenager might find the Vs appealing, even if his scenes have all of the subtlety of a poorly scripted teen slasher flick. "Damn, she's hot!" Tyler gushes when Anna appears on TV. "I know, right?" replies his even-less-interesting friend.
Later, when the two kids board one of the aliens' transports for a tour of the mothership hovering above New York City, they gush to each other, "Dude, this is incredible, man! It's like an amusement park!" And who greets them at the door? A super-hot mega-babe alien with blond flat-ironed hair and a big lip-glossy mouth named Lisa. Hokey? Hokier than a chimpanzee dressed up as Wayne Newton.
Then Chad, the Matt Lauer of "V," asks Anna, "Is there such a thing as an ugly visitor?" Bwahaha! We get it. This whole three ring circus is supposed to be just like the Macy's Thanksgiving Day parade, only with oozing lizard people where the giant smiling Elmo float should be.
But as transfixing as it might be to witness how easily we yield our planetary panties to an alien suitor, as awful as it might be to grapple with a nefarious force that pretends it just dropped by to bring us vaccines and borrow a little uranium before it's on its merry way, "V" doesn't linger for very long in this provocative territory. By the end of the pilot, we're already flipping through the best fake IDs Evans has ever seen and attending secret resistance meetings where surprise-guest reptilian-faced demons are getting their Old Man McGregor masks ripped off, "Scooby Doo"-style. Suddenly this might as well be "Fringe" or "Warehouse 13" or "The X-Files" or "Eureka" or any one of hundreds of shows that involve FBI agents and international espionage and terrorist thugs and secret plots to take over the universe.
Come on, now. Isn't there a new way to handle the alien invasion story? Isn't there something a little more subtle and hauntingly evil out there than sneaky reptiles with really good publicists?
Curb sitters
OK, there is Larry David of "Curb Your Enthusiasm" (10 p.m. Sundays on HBO). The writers' room of "Curb" may be the one place in Hollywood where they're determined to tackle the alien invasion plot in a brand new way.
You have to admire their patience, too. Instead of having Larry rip off his Larry David mask in the first few episodes of the show's seventh season, revealing a hideous, oozing lizard-faced alien underneath, they're making Larry act just like a nasty alien would, shaking and pointing and wrestling Rosie O'Donnell to the floor in the middle of a crowded restaurant.
When Larry calls his new girlfriend "Denise Handicapped" or asks if a couple's adopted Chinese daughter is better at using chopsticks than most toddlers, it's not funny because it's not supposed to be funny. It's supposed to be creepy and disturbing. It's supposed to be alienating. Like an alien. Get it?
If the writers of "Curb Your Enthusiasm" wanted the show to be funny, of course, they'd have gotten Jason Alexander into the mix from the start, because George Costanza was much funnier and more believable as Larry David than Larry David has ever been. George can ask rude questions and treat selfishness as a matter of principle and exalt his personal preferences to the status of widely held standards shared only by sane, thoughtful, right-thinking individuals, and it works, because Jason Alexander whispers and mumbles and states things matter-of-factly and, well, he's a great comedic actor.
Larry David, as oddly lovable as he is, is terrible at playing Larry David. He always looks nervous, like he's being watched. He shouts his way through every scene, and it's only gotten worse lately. Did you see last week's episode, where he pretended to be splashing himself every time he peed? He looked like he was wrestling an alligator.
And we're supposed to think it's hysterical and daring when Larry David rolls a handicapped woman into a closet and shuts the door? We're supposed to laugh uproariously as two women in wheelchairs chase Larry around a big house at a fancy party? We're supposed to chuckle when Larry confronts Christian Slater for hogging all the caviar at a party, a lame rehash of the classic "Seinfeld" episode where George is caught double-dipping his chip? We're expected to care that Larry doesn't like the sight of men in shorts? Obviously this isn't a comedy, not even close. Don't be so naive!
Clearly the lack of laughs doesn't come from the fact that "Curb Your Enthusiasm" is offensive. Far from it. If this show were a comedy -- which it's not -- it would be un-p.c. humor for very, very out of touch people who haven't noticed that all humor is un-p.c. now. Merely being un-p.c. by rolling out a steady flow of Katrina survivors and flabby-gutted assistants for Larry to insult is like building an entire show around a goofy dad, a meddling mother-in-law and a mom who always burns the pot roast. You could do it in 1985, but you can't do it now. It's like creating a drama series about building a secret resistance to fight off the invading aliens.
But if Larry David is an alien whose plan to exterminate every man, woman and child on the face of the earth involves insulting Chinese adoptees and handicapped women? Well, that's just brilliant.
I just can't wait until he rips off his mask! That is going to be so cool. What do you think he'll do first, eat Jerry Seinfeld's face off, or suck Julia Louis-Dreyfus' brains out of her ears? ||||| TV Marks Obama Anniversary with Documentaries, Aliens
It's Election Day in America. One election day ago, Barack Obama was elected President of the United States, and TV is marking the anniversary with two earnest documentaries—and an alien invasion.
I exaggerate, but only a little. ABC's V, which debuts tonight, may not be intended as an Obama allegory, but it has enough parallels with the issues, concerns and paranoid fantasies of today's politics that they were either included to pique interest, or created accidentally by the typing of a million monkeys who had never seen cable news.
First the earnest documentaries. Showtime's Poliwood, directed by Barry Levinson, which aired last night, possibly deserves credit for passionately trying to make the thankless argument that Hollywood celebrities do so have the right to inject themselves into politics. The film, which largely tracked celebrity efforts in the 2008 election, had a reasonable enough premise: that celebs interested in politics are no more or less automatically vapid than plenty of others who get to stick their oars in (donors, other politicians, many pundits), but ultimately a film defending the fairly privileged from the oppressive experience of people saying snarky things about them has to be exceptional to be compelling, and Poliwood wasn't.
HBO's By the People: The Election of Barack Obama, airing tonight, is better made and more engrossing, mainly because it had extensive access to an actual political campaign. Filmmakers Amy Rice and Alicia Sams started shooting film in 2006 with an Illinois Senator who had made a popular speech at a convention. As it progresses into the primaries, the filmmakers got a probably unmatched amount of time with Obama's family—particularly daughters Sasha and Malia, who have since been in the press only sparingly—and with his campaign operation, which provides the film's real meat and emotional impact. Spending late nights with exhausted volunteers who gave themselves to the campaign—and watching them as they gradually discover they actually have a chance to win—the film puts a human face on an often-maligned job.
I watched By the People at a screening over the summer, and while I was impressed with the access and sometimes moved, I was also—and I say this as somebody who voted for Obama—a little unnerved by the general feeling of self-congratulation in the film. (The title is one hint.) As the film moves into the general election, the candidate and the mechanics of his campaign move into the distance (a result, probably, of the access drying up in the national stage of the campaign), and the film starts to take a hagiographic tone, as if honoring its viewers one last time for electing Obama President.
In one sense I get it: the movie was made in the spirit of Nov. 5, 2008, the generalized, post=election good feeling and best wishes for the Obamas, plus happiness that—politics aside—a country with a history of race troubles had elected an African American president. But you can't really put "politics aside" when discussing the election of a President. And seeing the film this summer—after the realities of governing a country full of contention had settled in—the film already seemed anachronistic.
Which brings us to V. ABC's miniseries / maybe-an-actual-series (it airs four episodes in the fall, then returns in winter) is a remake of the NBC mini from the 1980s, about a race of lizard-like aliens who arrive on Earth preaching friendship, their real faces, and intentions, masked. The original was an allegory of Nazi Germany and the rise of Hitler, but one that was pretty hard to take seriously that way; I suspect most fans remember it more for the alien unmaskings and the creepy human-alien baby and we're probably all better off for that.
The new V, like the original, is first and foremost a big sci-fi entertainment, and as that it's promising, though not great out of the box. Like ABCs FlashForward, it's a kind of attempt at making Lost's lightning strike twice; like FlashForward, it's a conspiracy story starting with a Day When Everything Changes.
In this case, the aliens, led by hot lizard lady Morena Baccarin (Firefly), appear over Earth's cities, Independence Day style (the show makes note of the similarity), saying they're using Earth as a refueling stop: they need to borrow a cup of abundant minerals, and they'll be on their way, leaving some nifty technology as a thank-you gift. Humanity immediately cheers, because evidently this V takes place on an alternate Earth where no one has ever seen an alien-invasion movie. It's the old To Serve Man ploy again, and the question becomes whether humanity will figure out what the aliens are up to or be seduced by their good looks and goodies.
Unlike FlashForward, V benefits from some stronger performances (like Elizabeth Mitchell in the de rigeur FBI-agent role, and Scott Wolf, reprising his empathetic-weasel type from The Nine, playing a TV journalist the aliens recruit as a useful idiot). It also has flashes of humor and an emotional grounding that FlashForward could have used at the start. Even if you never saw the original, you'll probably guess the twists ABC asked me not to reveal before they occur, but the show's intriguing enough that I'll at least commit to the first four episodes before the break.
It's with the parallels to contemporary politics that things start to get interesting, and/or weird. The aliens are attractive and seductive: OK, we've seen that plenty of times before. They inspire worldwide acclaim on little evidence, while only a few characters wonder if everyone else is being taken in by their charisma; overtones of the McCain Celebrity ad, but you could apply that to a lot of situations. There's an aspect about disguised aliens living among us: well, that's been a staple of many series since 9/11, notably Battlestar Galactica.
Then there's the talk of the aliens bringing humanity "hope." OK, starting to sound a little more specific. They consolidate their appeal by reaching out to the youth. The alien leader tells humanity: "Embracing change is never easy. But the reward for doing so can be far greater than everything you can imagine." The reward: among other technologies, the aliens begin setting up clinics to offer miracle cures, for free. Remarks Wolf's journalist: "You're talking about universal health care!"
In summary: attractive newcomers + adulation + hidden identity + hope & change + manipulation of the media + brainwashing your kids + universal health care = the destruction of humanity by alien fascists. I checked the production notes to make sure Glenn Beck was not credited as the screenwriter, and that the aliens are not secretly from Kenya.
I'm not sure if V intends these parallels to be a running theme of the series, or if they were just played up in the pilot to get attention from writeups like this one. (Also, some of them may ring familiar because certain of Obama's critics have been throwing around the same kind of fascism comparisons that were in the original V.) Either way—again, speaking as an Obama voter—I have a hard time getting particularly worked up over the B-movie politics of V. They're not always entirely coherent, either. More than once V makes a point which is delivered thus by one of the lead characters, a Catholic priest: "Gratitude can morph into worship. Or worse: devotion." Um, isn't worship of aliens actually worse than devotion? Especially to a priest?
Like the ticking-bomb ultraviolence of 24, the paranoia of V is probably, more than anything, a convention of the genre: in this case, the aliens-among-us thriller. And if I'm going to get wild-ass conspiracies in the form of entertainment, better I get them from a primetime show about hot aliens than from cable news. | Most critics agree that ABC’s much-hyped alien drama V is a well-made show with good acting. But does this remake of the 1983 miniseries feel original? Is it a conservative screed? Here’s what they’re saying: Who cares if V is believable (it’s not)? All Heather Havrilesky wants is for “these aliens to be a little bit different than the last imaginary aliens.” But as she writes for Salon, V swiftly gets to the business of “building a resistance,” and “suddenly this might as well be Fringe or The X-Files or any one of hundreds of shows” with conspiracies and aliens. Okay, sure, writes Mary McNamara for the LA Times, “but just because something's a chestnut doesn't mean it isn't worth watching.” Overall the pilot is “pretty terrific.” It’s the same old tale in a “fine, fun and attractive package.” But the Obama parallels—the aliens conquer humanity on good looks and universal health care—are pretty distracting, says James Poniewozik in Time.“I checked the production notes to make sure Glenn Beck was not credited as the screenwriter.” Still, it’s hard to get worked up over the show’s “B-movie politics.” |
FAA conducted a series of analyses to identify the most cost-effective way to use the radar data from Grand Junction. On the basis of the results of a 1992 study, FAA decided that building a TRACON facility at Grand Junction was less costly than remoting the radar signal from Grand Junction to Denver. However, in May 1994 FAA conducted another cost analysis that factored in the use of a new technology for remoting radar signals known as video compression. The results of this analysis showed that it would be less costly to remote the radar signal from Grand Junction to Denver, and in August 1994, FAA announced its choice of the less costly option. FAA’s decision to remote the radar signal also means that the tower at Grand Junction will be operated by a contractor. FAA’s decision to provide approach guidance to aircraft through the Denver TRACON dictates that the Grand Junction tower be classified as a level-1 tower that operates using visual flight rules (VFR). In 1993, the House and Senate Appropriations Committees directed FAA to contract out all level-1 VFR towers to the private sector. In March 1995, Grand Junction community leaders and local air traffic controllers met with FAA to outline their concerns about FAA’s analyses and conclusions. The major concerns of the controllers and the city’s representatives were (1) the accuracy and completeness of the cost comparisons between the two options and (2) the considerations about safety and efficiency associated with remoting radar signals and contracting out a tower’s operations. FAA agreed to conduct a new study that would consider two options—(1) a local option that would establish either a TRACON or a TRACAB at Grand Junction or (2) a long-distance option that would remote the radar signal to Denver—and found once again that remoting the radar signal to Denver was the most cost-effective option and that it would not compromise the system’s safety and efficiency. FAA’s 1995 analysis of the costs of establishing a new TRACAB facility at Grand Junction or remoting the radar data to Denver was based on a comparison of the costs for facilities and equipment, telecommunications, staffing, and relocating staff over the 20-year life cycle of the project. FAA estimated that the cost of remoting the signal to the Denver TRACON would be about $9.4 million, while the cost of establishing a TRACAB in Grand Junction would be about $12.8 million, a difference of about $3.4 million.FAA also estimated that an additional $2.5 million would be saved over the same 20-year period by contracting out the tower at Grand Junction. According to FAA’s estimates, these two actions would save about $5.9 million. To verify whether FAA chose the most cost-effective option for providing radar approach control to the Grand Junction airport, we performed an independent cost analysis of FAA’s 1995 study. While we agree that FAA’s analysis identified the most cost-effective option, FAA did not take into account three factors that, in our opinion, are valid in evaluating the options studied. When these factors are considered, FAA’s total projected savings attributable to remoting and contracting out the tower operation at Grand Junction are reduced by about $500,000, from $5.9 million to $5.4 million. The principal findings from our analysis are summarized below. (See app. I for a detailed presentation of our analysis.) FAA did not include a cost for establishing telephone lines between Grand Junction and Denver under the remoting option. The overlooked cost of annual telephone lines was $107,500, or, when discounted over the 20-year life cycle of the project, $853,000 in 1995 dollars . We revised FAA’s estimated total telecommunications cost under the remote option upward by $853,000, from $618,000 to $1,470,000. FAA overestimated the cost of staffing under each of the options studied because the agency used authorized staffing levels—even though the positions were often unfilled. Using staffing levels that more closely approximate actual levels in the Northwest Mountain Region, we estimate that the annual staffing cost would be lower by $147,600 (about $1.82 million over 20 years) for the TRACAB option and by $168,900 (about $2.091 million over 20 years) for the remote option. The net effect of these changes increases the savings attributable to remoting by about $271,000 over 20 years. Moreover, when using staffing levels that more closely approximate actual levels in the field, we estimate that the TRACAB option’s staff relocation and training costs would be lower and further reduce the savings attributable to the remote option by $174,000. FAA underestimated the savings associated with contracting out the air traffic control functions at Grand Junction. We estimate that contracting out saves about $2.7 million—or about $218,000 more than FAA estimates—over 20 years after factoring in FAA’s previous experience with contractor-operated towers and the additional costs of relocating the Grand Junction controllers who choose not to work for the contractor. The representatives of the city of Grand Junction expressed concern that by remoting the radar signal to Denver and by contracting out a tower’s operation, FAA jeopardizes the safety and the efficiency of the air traffic control system at the Grand Junction airport. Specifically, the representatives questioned the implications for safety and efficiency of transmitting radar data over 250 miles and having Denver controllers provide Grand Junction’s radar approach control. The city’s representatives also questioned the safety and efficiency implications of contracting out Grand Junction’s tower. We discussed remoting and considerations about the safety and efficiency of a contractor-operated tower with officials at FAA headquarters and at FAA’s Northwest Mountain Region, who have jurisdiction over the Grand Junction and Denver areas. We also discussed these issues with officials from major aviation-related associations. According to the air traffic officials in FAA’s Northwest Mountain Region, the agency has successfully transmitted radar data hundreds of miles to its enroute centers for the past 30 years without compromising or affecting the system’s safety. Because FAA’s ability to transmit radar data over 250 miles of mountainous terrain was a concern to the Grand Junction representatives, we reviewed FAA’s information on the reliability and availability of radar data transmissions. The information showed that the reliability and availability of the transmissions averaged 99.98 percent nationally over the past 5 years and that they were unaffected by mountainous terrain. According to FAA and aviation association officials, a controller’s physical location is not a safety issue, and controllers routinely control air traffic safely without having visual contact with other air traffic controllers. The critical issue is that information be exchanged in a timely manner, not that two individuals be in visual proximity. Moreover, FAA officials told us that when normal modes of communication are disrupted, the agency adjusts its operating procedures—such as transferring the control of air space to an enroute center or using nonradar approaches—to ensure the timely flow of information. The city’s representatives believed that remoting caused traffic delays at the Grand Junction airport because Denver controllers were not trained to manage the airport’s air traffic. According to FAA Air Traffic officials in the Northwest Mountain Region, Grand Junction incurred initial start-up problems similar to those that other facilities incurred when FAA began to remote radar data. To eliminate these problems, FAA provided refresher briefings to the Denver controllers on managing Grand Junction’s air traffic. Grand Junction air traffic controllers told us that the Denver controllers are now efficiently managing this air traffic and delays are no longer a problem. According to the aviation association officials, their members had not raised any concerns about efficiency associated with FAA’s remoting of radar data. In connection with private-sector controllers under contract to FAA, the manager of FAA’s contract tower program told us that contract controllers are as well trained as FAA controllers. He provided documentation showing that contract controllers average 18 years of experience. The program manager also told us that contract controllers are certified by FAA and operate under the same regulations as FAA controllers. Additionally, officials representing various aviation associations told us that their members were provided with safe and efficient services by both FAA-operated and contractor-operated towers. As a result, these officials told us that they had no reason to question the safety and efficiency of FAA’s contract tower program. The concerns raised by representatives of the city of Grand Junction have also been raised by citizens’ groups in other communities where FAA has proposed to consolidate facilities and contract out a facility’s operation. That other communities had similar concerns leads us to believe that FAA can do a better job of communicating the reasons for its future decisions on consolidating facilities. The issues and concerns raised by the city’s representatives—the reliability of cost data and the safety and efficiency of the airport—were similar to those raised in 1994 by a Yakima, Washington, citizens’ group that also questioned an FAA remoting decision. In both the Grand Junction and the Yakima projects, FAA took a relatively ad hoc approach in deciding whether to remote radar data. In both cases, our review showed that while FAA chose the most cost-effective option, it did not include all relevant cost factors in its savings computation and did little to communicate the rationale for its decision to the affected communities, thereby contributing to subsequent misperceptions by community representatives. We did not find any standard FAA guidance for officials to follow or analytical model for them to use when deciding what costs to include, how to compute those costs, and what documentation to maintain when analyzing candidate facilities for consolidation. In June 1996, FAA issued a report that identifies the types of information to be considered in deciding whether to establish or consolidate TRACON facilities; however, the report does not specify how the various factors will be computed in the decision-making process. In the absence of standard guidance or an analytical model, FAA patterned its Grand Junction studies after earlier remoting efforts. Officials in FAA’s Air Traffic Plans and Requirements Program said that the agency uses this approach because each potential consolidation and remoting situation is unique. However, this approach has led to the agency’s omitting certain telecommunications costs and not reflecting the more realistic scenarios for staffing facilities and has raised concerns in the affected communities. These types of process problems can have the effect of undermining the agency’s credibility, discouraging the community from accepting FAA’s decision, and delaying implementation plans and the realization of projected cost savings. While FAA chose the most cost-effective way to handle radar data for Grand Junction and Yakima, in both instances it overlooked relevant cost factors. Furthermore, in both cases FAA’s decisions were challenged by the affected communities, thereby contributing to delays in implementing the decisions. A more structured decision-making process, based on formal guidance and an analytical model, could ensure that FAA considers all relevant factors when making a remoting decision. A more structured decision-making process could also help FAA defend its decisions to communities that protest the closure of an FAA-staffed facility. As FAA continues to remote radar data and consolidate facilities, it is to FAA’s advantage to develop and implement a more structured decision-making process in conjunction with key stakeholders. We recommend that the Secretary of Transportation direct the Administrator, Federal Aviation Administration, to develop formal guidance and an analytical model for making its remoting decisions. The guidance should outline what costs to include, how those costs should be computed, and what documentation is required to support the analysis. It should also provide for early and continuous involvement of the major stakeholders, especially the affected communities. We provided a draft of this report to the Department of Transportation for review and comment. We met with officials of the Department, including FAA’s Program Director for Air Traffic Plans and Requirements Program, who agreed with the draft report’s conclusions and recommendation. The Program Director said that FAA does not normally conduct the level of analysis we recommended because of the wide difference in costs between remoting radar data and establishing a local terminal radar approach control facility. Nevertheless, FAA recognized that improvements can be made in its decision-making process. In our view, FAA’s June 1996 report that identifies the types of information to be considered when deciding whether to establish or consolidate TRACON facilities is a step in the right direction for improving its decision-making process. However, the report does not specify how the various factors will be computed in the decision-making process. We interviewed FAA officials in Washington, D.C., and the Northwest Mountain Region and obtained specific documentation on the cost of each option and the associated safety information. To verify the figures FAA used in its most recent cost analysis, we conducted an independent cost analysis. We also met with representatives of the city of Grand Junction and officials from major aviation associations to discuss their concerns and obtain their opinions on the potential operational and safety impacts associated with remoting and contracting out the Grand Junction tower. We discussed our findings with FAA officials, including the Program Director, Air Traffic Plans and Requirements Program. We performed this review from October 1995 through October 1996 in accordance with generally accepted government auditing standards. We are sending copies of this report to the Secretary of Transportation; the Administrator, Federal Aviation Administration; and representatives of the city of Grand Junction. We will also make copies available to others on request. Please call me at (202) 512-4803 if you or your staff have any questions about this report. Major contributors to this report are listed in appendix II. Cost savings for remote option ($1,189) ($1,470,824) (1 position) $1,457,690 (2 positions) (1 position) (1 position) $4,864,936(8 positions) $3,321,156 (6 positions) $1,044,017(1 position) ($1,044,017) $1,824,351(3 positions) $1,216,234 (2 positions) ($2,700,000) (Table notes on next page) The costs for telecommunication, salary, and savings from the contract tower program were discounted over 20 years. We believe $50,000 per move is reasonable because FAA now projects $56,200 as the average cost per move for its Northwest Mountain Region. Because we eliminated one technician under the TRACAB option, we reduced the cost of training by $23,900. FAA training academy officials told us that this is the cost for training one technician. Linda S. Garcia Dana E. Greenberg Robert E. Levin Peter G. Maristch The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a congressional request, GAO reviewed: (1) whether the Federal Aviation Administration (FAA) chose the most cost-effective option for handling radar-based air traffic control activities at the Grand Junction, Colorado, airport; (2) whether the safety and efficiency of the air traffic control system would be compromised by remoting radar data and contracting out tower operations at Grand Junction; and (3) what can be done to improve the FAA process for determining when and where to remote radar data. GAO found that: (1) it agreed with the FAA determination that remoting the Grand Junction radar signal to a terminal radar approach control (TRACON) facility in Denver is the most cost-effective option for handling radar data from the site; (2) the FAA 20-year projected savings attributable to the remote option should be reduced by about $500,000, from $5.9 million to $5.4 million, since FAA overlooked certain telecommunications costs and did not utilize more realistic staffing scenarios; (3) GAO analysis of the available data disclosed no valid concerns about the safety and efficiency of remoting radar data or contracting out a tower's operation; (4) the FAA process for deciding when and where to remote radar signals was generally sound, but relatively ad hoc; and (5) a formal methodology for making such decisions would have helped FAA to ensure that all relevant factors were properly considered and communicate to the affected communities how its decision was made. |
This is an overview of the most prominent features of federal habeas corpus law. Federal habeas corpus as we know it is by and large a procedure under which a court may review the legality of an individual's incarceration. It is most often invoked after conviction and the exhaustion of the ordinary means of appeal. It is at once the last refuge of scoundrels and the last hope of the innocent. It is an intricate weave of statute and case law whose reach has flowed and ebbed over time. Prior to enactment of the Antiterrorism and Effective Death Penalty Act (AEDPA), the most recent substantial recasting of federal habeas law and the Supreme Court cases that immediately preceded it, it was said that federal habeas was "the most controversial and friction producing issue in the relation between federal and state courts.... Commentators [were] critical, ... federal judges [were] unhappy, ... state courts resented [it], . . [and] prisoners thrive[d] on it as a form of occupational therapy.... " The AEDPA was passed and yet the debate goes on. Judges, academics and political figures regularly urge that the boundaries for federal habeas be readjusted; some would make it more readily available; others would limit access to it. Debate has been particularly intense in capital punishment cases. There, unlike most other cases, the decisions of the state courts stand unexecuted while they await completion of federal habeas corpus proceedings; there, unlike most other cases, an erroneously executed sentence is beyond any semblance of correction or compensation. The AEDPA offers states expeditious habeas procedures in capital cases under certain circumstances; no state has yet been able to take full advantage of the offer, and as a consequence, Congress adjusted the method of determining qualification in the USA PATRIOT Improvement and Reauthorization Act. An unsuccessful endeavor to curtail access of Guantanamo Bay detainees to habeas relief provided the Supreme Court with an opportunity to further explain the scope of Congressional authority over habeas jurisdiction under the suspension clause. At early common law, much of the business of the courts began with the issuance of one of several writs, many of which have survived to this day. The writs were a series of written order forms, issued by the court in the name of the king, commanding the individual to whom they were addressed to return the writ to the court for the purpose stated in the writ. The purpose was generally reflected in the name of the writ itself. Thus for example, a subpoena ad testificandum was a command to return the writ to the court at a specified time and place, "sub poena," that is, "under penalty" for failure to comply, and "ad testificandum" that is, "for the purpose of testifying." Just as the writs of subpoena have been shortened in common parlance to "subpoena," references to the several writs of habeas corpus were shortened. The habeas corpus writs were all issued by the courts in the name of the king and addressed to one of the king's officials or a lower court. The writs commanded the officers of the Crown to appear before the court with the "corpus" ("body") of an individual named in the writ, whom "habeas" ("you have" or "you are holding"), for the purpose stated in the writ. Thus for instance, the writ of habeas corpora juratorum commanded the sheriff to appear before the court having with him or holding the bodies of potential jurors. By the colonial period, "habeas corpus" had come to be understood as those writs available to a prisoner, held without trial or bail or pursuant to the order of a court without jurisdiction, ordering his jailer to appear with the prisoner before a court of general jurisdiction and to justify the confinement. Colonial America was well acquainted with habeas corpus and with occasional suspensions of the writ. The drafters of the United States Constitution, after enumerating the powers of Congress, inserted the limitation that "the privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it." The Act that created the federal court system empowered federal judges to issues writs of habeas corpus "and other writs not specially provided for by statute, which may be necessary for the exercise of their respective jurisdictions.... [a]nd ... to grant writs of habeas corpus for the purpose of an inquiry into the cause of commitment." The power was limited, however, in that "writs of habeas corpus shall in no case extend to prisoners in gaol, unless where they are in custody, under or by colour of the authority of the United States, or are committed for trial before some court of the same, or are necessary to be brought into court to testify." The Supreme Court further clarified federal habeas corpus law when in Ex parte Bollman , 8 U.S.(4 Cranch) 75 (1807), it held that the power of the federal courts to issue the writ was limited to the authority vested in them by statute. The courts had no common law or inherent authority to issue writs of habeas corpus. While the common law might provide an understanding of the dimensions of the writ, the power to issue it depended upon and was limited by the authority which Congress by statute vested in the courts, id . at 93. Consistent with the common law, the writ was available to those confined by federal officials without trial or admission to bail, but was not available to contest the validity of confinement pursuant to conviction by a federal court of competent jurisdiction, even one whose judgment was in error. Congress expanded the authority it had given the federal courts in response to the anticipated state arrest of federal officers attempting to enforce an unpopular tariff in 1833 and again in 1842 in response to British protest over the American trial of one of its nationals. The writ was made available to state prisoners held because of "any act done, or omitted to be done, in pursuance of a law of the United States," and to state prisoners who were foreign nationals and claimed protection of the Act of State doctrine. The federal writ otherwise remained unavailable for prisoners held under state authority rather than the authority of the United States. In 1867, Congress substantially increased the jurisdiction of federal courts to issue the writ by authorizing its issuance "in all cases," state or federal, "where any person may be restrained of his or her liberty in violation of the constitution, or of any treaty or law of the United States." Originally, habeas corpus permitted collateral attack upon a prisoner's conviction only if the sentencing court lacked subject matter jurisdiction. Shortly after 1867, however, the Supreme Court began to recognize a growing number of circumstances where courts were said to have acted beyond their jurisdiction because some constitutional violation had extinguished or "voided" their jurisdiction. This development was of limited benefit to most prisoners, since most were confined under state convictions and relatively few of the rights guaranteed by the Constitution were thought to apply against the states. Even when a constitutional claim was available, state prisoners could not be granted federal habeas relief until all possibility of state judicial reliefâtrial, appellate, and postconvictionâhad been exhausted. Eventually two developments stimulated new growth. First, the jurisdictional tests, cumbersome and somewhat artificial, were discarded in favor of a more generous standard. Later, the explosion in the breadth of due process and in the extent of its application to the states multiplied the instances when a state prisoner might find relief in federal habeas corpus. Evolution began with two cases which reached the Court early in the last century and in which petitioners claimed that mob rule rather than due process of law led to their convictions and death sentences. The Court in Frank v. Mangum , 237 U.S. 309 (1915), denied the writ because Frank's claim had already been heard and rejected as part of the state appellate process. The Court did suggest, however, that a state court might lose jurisdiction by virtue of a substantial procedural defect, such as mob domination of the trial process, and that federal habeas relief would be available to anyone convicted as a consequence of the defect. It also indicated that the question of whether relief should be granted was not to be resolved solely by examination of the trial court record, as had historically been the case, but upon federal court consideration of the entire judicial process which pre-dated the petition. If Frank had been intended as a warning, it appears to have been in vain, for soon thereafter the Court confronted yet another conviction allegedly secured by mob intervention. In spite of the fact that the state appellate courts had already heard and denied the petitioners' claims, the Court ordered the lower federal court in which relief had been initially sought to make its own determination of the validity of petitioners' claims of procedural defect. Soon thereafter it became clear that federal habeas was not limited to instances of mob intervention or other external contaminants of the judicial process; it reached deficiencies from within the process which rendered the process so unfair as to result in a loss of life or liberty without due process of law, whether they took the form of a prosecutor's knowing use of perjured testimony and suppression of evidence that would impeach it, or of a denial of the assistance of counsel in criminal prosecutions, or of confessions or guilty pleas secured by government coercion. Early in the 1940s, the Court stopped requiring that an alleged constitutional violation void the jurisdiction of the trial court before federal habeas relief could be considered. Federal judges soon complained that federal prisoner abuses of habeas had become "legion." Congress responded by incorporating into the 1948 revision of the judicial code the first major revision of the federal habeas statute since 1867. State courts exerted little pressure for revision of the federal habeas statute in 1948. Although habeas relief had been available to state prisoners by statute since 1867 and subsequent decisions seemed to invite access, the hospitality that federal habeas extended to state convicts with due process and other federal constitutional claims had not yet become apparent. This all changed over the next two decades. As noted earlier, some of the change was attributable to expansive Supreme Court interpretations of the procedural guarantees of the Bill of Rights and of the extent to which those guarantees were binding upon the states through the due process clause of the Fourteenth Amendment. Federal habeas was the vehicle used to carry much of the due process expansion to the states. After Brown v. Allen , 344 U.S. 443 (1953), there was little doubt that the federal habeas corpus statute afforded relief to state prisoners whose convictions were tainted by constitutional violations, both those violations that would void state court jurisdiction and those that would not. The majority position in Brown on the impact of the Court's denials of certiorari contributed to the expansion of federal habeas as well. When the Court refused to review a state case by denying certiorari, it thereby left the decision of the state's high court intact. If this should be read as the Court's endorsement of the state's disposal of constitutional issues as part of the normal appellate process, it would seem to chill any subsequent lower federal court reconsideration of those issues under habeas. Brown precludes such a result. The Court's denials of certiorari meant no more than that the Court had declined to hear the case; no conclusions on the Court's view of the issues raised could be drawn from its declinations. Moreover, in subsequent habeas proceedings, the lower federal courts were not bound by state resolution of federal constitutional issues, even if the state courts had given applicants for the writ a full and fair hearing on the very same issues raised on habeas. But the requirement to exhaust state remedies remained. Brown held that a state prisoner, seeking habeas relief, could not satisfy the requirement merely by showing that a remedy, once open to him, had been lost by his own inaction. The Court eased the exhaustion restriction considerably in Fay v. Noia , 372 U.S. 391 (1963), in which it held that federal courts were permitted, but not required, to deny habeas for an intentional failure to exhaust state remedies. At the same time, it articulated circumstances under which the evidentiary hearing, found permissible in Brown , would be mandatory, Townsend v. Sain , 372 U.S. 293 (1963). Relaxation of the default bar coupled with expansion of the circumstances under which constitutional issues might be reconsidered forecast the possibility of repetitious habeas applications and of lower court efforts to discourage repetition. The Court and Congress anticipated and combined to control such eventualities. Within weeks of Noia and Townsend , the Court announced the rule applicable for federal prisoners in Sanders v. United States , 373 U.S. 1 (1963). "Controlling weight may be given to denial of a prior application for federal habeas corpus ... relief only if (1) the same ground presented in the subsequent application was determined adversely to the applicant on the prior application, (2) the prior determination was on the merits, ... (3) the ends of justice would not be served by reaching the merits of the subsequent application" and (4) any new ground presented in the subsequent application had been deliberately abandoned or withheld earlier under the same test used in state cases for default. 373 U.S. at 15, 17-18. Congress closed the circle in 1966 by amending the federal habeas statute to apply a rough equivalent of the Sanders rule to state prisoner petitions for federal habeas, 28 U.S.C. 2244, 2254. The few years which followed Sanders probably stand as the high water mark for the reach of federal habeas corpus. But by the early seventies, the Supreme Court had begun to announce a series of decisions grounded in the values of respect for the work of state courts and finality in the process of trial and review. Thus, for example, state prisoners who fail to afford state courts an opportunity to correct constitutional defects are barred from raising them for the first time in federal habeas in the absence of a justification. Nor may they scatter their habeas claims in a series of successive petitions. Those who plead guilty and thereby waive, as a matter of state law, any constitutional claims, may not use federal habeas to revive them. And with narrow exception, state prisoners may not employ federal habeas as a means to assert, or retroactively claim the benefits of, a previously unrecognized interpretation of constitutional law (i.e., a "new rule"). The Antiterrorism and Effective Death Penalty Act of 1996, P.L. 104-132 , 110 Stat. 1214 (1996) (AEDPA), codified, supplemented, and expanded upon the Court's limitations on the availability of the writ. AEDPA was the culmination and amalgamation of disparate legislative efforts, including habeas proposals, some them stretching back well over a decade. Its adjustments help define the contemporary boundaries of the current writ. Before passage of the AEDPA, state court interpretations or applications of federal law were not binding in subsequent federal habeas proceedings. The debate that led to passage was marked by complaints of delay and wasted judicial resources countered by the contention that federal judges should decide federal law. Out of deference to state courts and to eliminate unnecessary delay, the AEDPA bars federal habeas relief on a claim already passed upon by a state court "unless the adjudication of the claimâ(1) resulted in a decision that was contrary to, or involved an unreasonable application of clearly established Federal law, as determined by the Supreme Court of the United States; or (2) resulted in a decision that was based on an unreasonable determination of the facts in light of the evidence presented in the state court proceeding," 28 U.S.C. 2254(d). For purposes of section 2254, an unreasonable application of clearly established federal law, as determined by the Supreme Court "occurs when a state court 'identifies the correct governing legal principle from [the] Court's decisions but unreasonably applies that principle to the facts of'" the case before it. Moreover, the Court has said on several occasions, the question before the federal courts when they are confronted with a challenged state court application of a Supreme Court recognized principle is not whether the federal courts consider the application incorrect but whether the application is objectively unreasonable. On the other hand, for purposes of section 2254(d)(1), a decision is "contrary to ... clearly established federal law, as determined by the Supreme Court," "if it applies a rule that contradicts the governing law set forth in the [Supreme Court's] cases, or if it confronts a set of facts that is materially indistinguishable from a decision of [the] Court but reaches a different result." Obviously, a state court determination of a question which relevant Supreme Court precedent leaves unresolved can be neither contrary to, nor an unreasonable application, of Court precedent. The Court has had fewer occasions to construe the unreasonable-determination-of-facts language in section 2254(d)(2). Several cases have involved the prosecution's purportedly discriminatory peremptory jury strikes in which context the Court declared that, "a federal habeas court can only grant [such a] petition if it was unreasonable to credit the prosecutor's race-neutral explanations for the Batson challenge. State-court factual findings, moreover, are presumed correct; the petitioner has the burden of rebutting the presumption by 'clear and convincing evidence.' §2254(e)(1)." Exhaustion . The deference extended to state courts reaches not only their decisions but the opportunity to render decisions arising within the cases before them. State prisoners were once required to exhaust the opportunities for state remedial action before federal habeas relief could be granted, 28 U.S.C. 2254(b),(c) (1994 ed.). This "exhaustion doctrine is principally designed to protect the state courts' role in the enforcement of federal law and prevent disruption of state judicial proceedings. Under our federal system, the federal and state courts [are] equally bound to guard and protect rights secured by the Constitution," Ex parte Royall , 117 U.S. 241, 251 (1886). Because "it would be unseemly in our dual system of government for a federal district court to upset a state court conviction without an opportunity to the state courts to correct a constitutional violation," federal courts apply the doctrine of comity, which "teaches that one court should defer action on causes properly within its jurisdiction until the courts of another sovereign with concurrent powers, and already cognizant of the litigation, have had an opportunity to pass upon the matter," Darr v. Burford , 339 U.S. 200, 204 (1950). "A rigorously enforced total exhaustion rule encourage[s] state prisoners to seek full relief first from the state courts, thus giving those courts the first opportunity to review all claims of constitutional error. As the number of prisoners who exhaust all of their federal claims increases, state courts may become increasingly familiar with and hospitable toward federal constitutional claims. Equally important, federal claims that have been fully exhausted in state courts will more often be accompanied by a complete factual record to aid the federal courts in their review," Rose v. Lundy , 455 U.S. 509, 518-19 (1982). The AEDPA preserves the exhaustion requirement, and reinforces it with an explicit demand that a state's waiver of the requirement must be explicit. On the other hand, Congress appears to have been persuaded that while as a general rule constitutional questions may be resolved more quickly if state prisoners initially bring their claims to state courts, in some cases where a state prisoner has mistakenly first sought relief in federal court, operation of the exhaustion doctrine may contribute to further delay. Hence, the provisions of 28 U.S.C. 2254(b)(2) authorize dismissal on the merits of mixed habeas petitions filed by state prisoners. The AEDPA bars repetitious habeas petitions by state and federal prisoners, 28 U.S.C. 2244(b). Under earlier law, state prisoners could not petition for habeas relief on a claim they had included or could have included in earlier federal habeas petitions unless they could show "cause and prejudice" or a miscarriage of justice. Cause could be found in the ineffective assistance of counsel, Kimmelman v. Morrison , 477 U.S. 365 (1986); the subsequent development of some constitutional theory which would have been so novel at the time it should have been asserted as to be considered unavailable, Reed v. Ross , 468 U.S. 1 (1984); or the discovery of new evidence not previously readily discoverable, Amadeo v. Zant , 486 U.S. 214 (1988). A prisoner unable to show cause and prejudice might nevertheless be entitled to federal habeas relief upon a showing of a "fundamental miscarriage of justice," that is, that "the constitutional error probably resulted in the conviction of one who was actually innocent." "To establish the requisite probability, the petition must show that it is more likely than not that no reasonable juror would have convicted him in the light of the new evidence." The Court's pre-AEDPA tolerance for second or successive habeas petitions from state prisoners was limited; the tolerance of the AEDPA is, if anything, more limited. "If the prisoner asserts a claim that he has already presented in a previous federal habeas petition, the claim must be dismissed in all cases." A claim not mentioned in an earlier petition must be dismissed unless it falls within one of two narrow exceptions: (A) it relies on a newly announced constitutional interpretation made retroactively applicable; or (B) it is predicated upon on newly discovered evidence, not previously available through the exercise of due diligence, which together with other relevant evidence establishes by clear and convincing evidence that but for the belatedly claimed constitutional error "no reasonable factfinder would have found the applicant guilty," 28 U.S.C. 2244(b)(2). Moreover, the exceptions are only available if a three judge panel of the federal appellate court authorizes the district court to consider the second or successive petition because the panel concludes that the petitioner has made a prima facie case that his claim falls within one of the exceptions, 28 U.S.C. 2244(b)(3). And the section purports to place the panel's decision beyond the en banc jurisdiction of the circuit and the certiorari jurisdiction of the Supreme Court, 28 U.S.C. 2244(b)(3)(E). The Supreme Court, in Felker v. Turpin , held that because it retained its jurisdiction to entertain original habeas petitions neither the gatekeeper provisions of section 2244(b)(3) nor the limitations on second or successive petitions found in sections 2244(b)(1) and (2) deprive the Court of appellate jurisdiction in violation of Article III, §2. At the same time, it held that the restrictions came well within Congress' constitutional authority and did not "amount to a 'suspension' of the writ contrary to Article I, §9." In Castro v. United States , 540 U.S. 375, 379-81 (2003), the Court held that section 2244(b)(3)(E) constraint upon its certiorari jurisdiction is limited to instances where the lower appellate court has acted on a request to file a successive petition, and does not apply to instances where the lower appellate court has reviewed a trial court's successive petition determination. A claim, which becomes ripe after an earlier petition, such as a claim that the petitioner's mental health precludes his execution, is not considered a second petition. Until the mid-20 th century, a federal habeas corpus petition could be filed and the writ granted at any time as long as the petitioner remained under government confinement, but court rules applicable to both state and federal prisoners were then adopted to permit the dismissal of stale petitions if the government's ability to respond to the petition has been prejudiced by the passage of time. The Rules did not preclude federal habeas review merely because the government's ability to retry the petitioner had been prejudiced by the passage of time; nor did they apply where the petitioner could not reasonably have acquired the information necessary to apply before prejudice to the government occurred, Rules 9(a), supra . The AEDPA establishes a one-year deadline within which state and federal prisoners must file their federal habeas petitions, 28 U.S.C. 2244(d), 2255. The period of limitations begins with the latest of: the date of final completion of direct state review procedures; the date of removal of a government impediment preventing the prisoner from filing for habeas relief; the date of Supreme Court recognition of the underlying federal right and of the right's retroactive application; or the date of uncovering previously undiscoverable evidence upon which the habeas claim is predicated. The period is tolled during the pendency of state collateral review, that is, "during the interval between (1) the time a lower state court reaches an adverse decision, and (2) the day the prisoner timely files an appeal." When the state appeal is not filed in a timely manner, when it "is untimely under state law, that is the end of the matter for purposes of 2244(d)(2)." A qualifying petition must be "properly filed" with the appropriate state court, but a petition for state collateral review is no less properly filed simply because state procedural requirements other than timeliness preclude the state courts from ruling on the merits of the petition. Amendments, submitted after the expiration of a year, to a petition filed within the one year period limitation, that assert claims unrelated in time and type to those found in the original petition do not relate back and are time barred. A state may waive the statute of limitations defense, but its intent to do so must be clear and not simply the product of a mathematical miscalculation. The statute of limitations provisions initially presented a novel problem for district courts faced with mixed petitions of exhausted and unexhausted claims. Before the AEDPA, district courts could not adjudicate mixed petitions but were required to first give state courts the opportunity to resolve the unexhausted claims. Petitioners could then return to habeas for adjudication of any remaining exhausted claims. "As a result of the interplay between AEDPA's 1-year statute of limitations and Lundy ' s dismissal requirement, petitioners who come to federal court with 'mixed' petitions run the risk of forever losing their opportunity for any federal review of their unexhausted claims. If a petitioner files a timely but mixed petition in federal district court, and the district court dismisses it under Lundy after the limitations period has expired, this will likely mean the termination of any federal review." Nevertheless, the district court is under no obligation to warn pro se petitions of the perils of mixed petitions. Although cautioning against abuse if too frequently employed, the Court endorsed the "stay and abeyance" solution suggested by several of the lower courts, under which in appropriate cases, the portion of a state prisoner's mixed petition related to exhausted habeas claims are stayed and held in abeyance until he can return to state court and exhaust his unexhausted claims. At one time, an appeal from a federal district court's habeas decision could only proceed upon the issuance of a probable cause certification issued by either the district court judge or a federal appellate judge that the appeal involved an issue meriting appellate consideration, and could only be granted after the prisoner had made a "substantial showing of the denial of [a] federal right. With slight changes in terminology, the AEDPA leaves the matter largely unchanged. Appeals are only possible upon the issuance of certification of appealability (COA), upon a substantial showing of a constitutional right. A petitioner satisfies the requirement when he can show that "reasonable jurists would find the district court's assessment of the constitutional claims debatable or wrong." This does not require the petitioner show a likelihood of success on the merits; it is enough that reasonable jurists would find that the claim warrants closer examination. Should the district have dismissed the habeas petition on procedural grounds, a COA may be issued only upon the assessment that reasonable jurists would consider both the merits of the claim and the procedural grounds for dismissal debatable. Because the COA requirement is jurisdictional, an appellate court may not treat an application of the COA as an invitation to immediately pass upon the merits without first granting the certificate. Although the Court had declared that it lacked statutory jurisdiction to review the denial of a certificate of probable cause under a writ of certiorari, the denial of a COA may be challenged under the writ. In Wainwright v. Sykes , 433 U.S. 72 (1977), and the cases which followed its lead, the Court declared that state prisoners who fail to raise claims in state proceedings are barred from doing so in federal habeas proceedings unless they can establish both "cause and prejudice." The Court later explained that the same standard should be used when state prisoners abused the writ with successive petitions asserting claims not previously raised, and when they sought to establish a claim by developing facts which they had opted not to establish during previous proceedings. Of the two elements, prejudice requires an actual, substantial disadvantage to the prisoner. What constitutes cause is not easily stated. Cause does not include tactical decisions, ignorance, inadvertence or mistake of counsel, or the assumption that the state courts would be unsympathetic to the claim. Cause may include the ineffective assistance of counsel; some forms of prosecutorial misconduct; the subsequent development of some constitutional theory which would have been so novel at the time it should have been asserted as to be considered unavailable; or the discovery of new evidence not previously readily discoverable. Federal courts may entertain a habeas petition, notwithstanding default and the failure to establish cause, in any case where failure to grant relief, based on an error of constitutional dimensions, would result in a miscarriage of justice due to the apparent conviction of the innocent, Murray v. Carrier, supra. In order the meet this "actually innocent" standard, the prisoner must show that "it is more likely than not that no reasonable juror would convict him." When the petitioner challenges his capital sentence rather than his conviction, he must show "by clear and convincing evidence that, but for the constitutional error, no reasonable juror would have found the petitioner eligible for the death penalty." This miscarriage of justice exception, whether addressed to the petitioner's guilt or sentence, is a matter that can be taken up only as a last resort after all nondefaulted claims for relief and the grounds for cause excusing default on other claims have been examined. In Herrera v. Collins , 506 U.S. 390 (1993), the Court splintered over the question of whether newly discovered evidence of actual innocence, without some procedural error of constitutional magnitude, permitted habeas relief. Chief Justice Rehnquist, author of the opinion for the Court, finessed the issue by assuming without deciding that at some quantum of evidence of a defendant's innocence the Constitution would rebel against his or her execution. Short of that point and cognizant of the availability of executive clemency, newly discovered evidence of the factual innocence of a convicted petitioner, unrelated to any independent constitutional error, does not warrant habeas relief. House v. Bell , 547 U.S. 518 (2006), came to much the same end. House supplied evidence of his innocence of sufficient weight to overcome the procedural default that would otherwise bar consideration of his habeas petition. "[W]hatever burden a hypothetical freestanding innocence claim would require," however, the record in House (new evidence and old) was not sufficient. In re Davis affords the Court the opportunity to consider anew the issue it put aside in Herrera and House âmay habeas relief be granted on the basis of a freestanding claim of innocence, and if so, what level of persuasion is required before such relief may be granted? The Supreme Court transferred Davis' habeas petition to the U.S. District Court for the Southern District of Georgia to receive evidence and make findings concerning Davis' innocence. Justice Scalia, joined by Justice Thomas, characterized the transfer as a "fool's errand," since in their view the lower court may not grant habeas relief regardless of its findings. Justice Stevens, in a concurrence joined by Justices Ginsburg and Breyer, disagreed. The mere presence of constitutional error by itself does not present sufficient grounds for issuance of the writ unless the error is also harmful, i.e., "unless the error had a substantial and injurious effect or influence in determining the jury's verdict." The writ will issue, however, where the court has grave doubt as to whether the error was harmless. A line of cases beginning with Teague v. Lane , 489 U.S. 288 (1989) drastically limits use of federal habeas to raise novel legal issues by restricting for habeas purposes the retroactive application of the Supreme Court's decisions. Prior to Teague when the Court announced a new rule concerning constitutional requirements binding in state criminal procedure cases, it employed one of two approaches. In some cases, it simultaneously announced whether the new rule was to have retroactive or prospective applications. In others, it postponed that decision until a subsequent case. In either instance, the Court employed a test first articulated in Linkletter v. Walker , 381 U.S. 618 (1965), to determine whether a new rule should be applied retroactively. Under the test, the Court considered "(a) the purpose to be served by the new standards, (b) the extent of the reliance by law enforcement authorities on the old standards, and (c) the effect on the administration of justice of a retroactive application of the new standards." In Teague , the Court adopted a different approach, borrowing from a position espoused earlier by Justice Harlan. Under this view, habeas is perceived as a deterrent used to encourage state and lower federal courts to adhere to constitutional standards. Therefore, a novel constitutional interpretation, or "new rule" should not be applied retroactively during federal habeas review of state convictions since state courts could only be expected to defer to those rules in existence when their consideration became final. Furthermore, since it would be unfair to grant a habeas petitioner the benefit of a new rule but deny its benefits retroactively to others similarly situated, a plurality of the Court held that "habeas corpus cannot be used as a vehicle to create new constitutional rules of criminal procedure unless those rules would be applied retroactively to all defendants on collateral review" under one of the two exceptions where retroactive application is permitted, 489 U.S. at 316. Thus, under Teague and its companion, Penry v. Lynaugh , 492 U.S. 302 (1989), a new rule cannot be sought through federal habeas and a new rule may only be applied retroactively for the benefit of habeas petitioners when (1) the new interpretation "places certain kinds of primary, private individual conduct beyond the power of the criminal law-making authority to proscribe," 489 U.S. at 307, or places "a certain category of punishment for a class of defendants because of their status or offense" beyond the power of the criminal law-making authority to proscribe, 492 U.S. at 329, or (2) the new interpretation "significantly improve[s] the pre-existing fact finding procedures ... [which] implicate the fundamental fairness of the trial ... [and] without which the likelihood of an accurate conviction is seriously diminished," 489 U.S. at 312-13. In order to constitute a new interpretation or "new rule" for purposes of the exceptions, the interpretation must "break new ground or impose a new obligation on the States or Federal Government," or "[t]o put it differently, a case announces a new rule if the result was not dictated by precedent existing at the time the defendant's conviction became final," 489 U.S. at 301 (emphasis of the Court). A decision may announce a "new rule" for purposes of Teague , even if the Court states its decision is "dictated by precedent," as long as a split in the lower courts or some other source of authority provides a ground upon which a different outcome might reasonably have been anticipated, for the Teague rule "serves to validate reasonable, good-faith interpretations of existing precedents made by state courts even though they are shown to be contrary to later decisions." The Court has more recently indicated that the rules covered in the first exception, the exception for rules that place certain conduct beyond proscriptive reach, are more accurately characterized as substantive rather than procedural rules and thus not subject to the Teague rule from the beginning. The second exception, available to new "watershed rules of criminal procedure implicating the fundamental fairness and accuracy of the criminal proceeding" like Gideon v. Wainwright , 372 U.S. 335 (1963), does not extend to cases less indispensible to fundamental fairness than Gideon . The Court observed in Beard v. Banks that it has yet to rule on a case that satisfied this second Teague exception. The most controversial of the proposals that preceded enactment of the Antiterrorism and Effective Death Penalty Act (AEDPA) involved habeas in state capital cases. Capital habeas cases presented special problems. Existing procedures afforded not only the incentive, but the opportunity, for delay. A state defendant convicted of a capital offense and sentenced to death could take advantage of three successive procedures to challenge constitutional defects in his or her conviction or sentence. His or her claims could be raised on appeal, in state habeas proceedings, and in federal habeas proceedings. As a consequence, there were extensive delays between sentence and execution of sentence. In June 1988, Chief Justice Rehnquist named a committee chaired by retired Justice Powell to study "the necessity and desirability of legislation directed toward avoiding delay and the lack of finality in capital cases in which the prisoner had or had been offered counsel." The Committee identified three problems associated with federal habeas corpus in state capital punishment cases: unnecessary delay and repetition, the need to make counsel more generally available, and last minute litigation. The Committee recommended amendments to the federal habeas statute and Chief Justice Rehnquist transmitted its report to Congress in September 1989. Congress weighed the recommendations, but initially enacted no major revision, other than the provision in the 1988 Anti-Drug Abuse Act that required the appointment of counsel in conjunction with federal habeas in capital punishment cases. The AEDPA, however, offered procedural advantages to the states to ensure the continued availability of qualified defense counsel in death penalty cases, 28 U.S.C. 2261-2266. Prior to the AEDPA, federal law called for the appointment of counsel to assist indigent state prisoners charged with or convicted of a capital offense at every stage of the proceedings other than during collateral review in state court. The AEDPA offered a streamlined habeas procedure in cases involving state death row inmates to those states that fill this gap, 28 U.S.C. 2261, 2265. When it became apparent that the states could not or would not opt in, Congress changed the procedure under which states are deemed to have qualified, 28 U.S.C. 2265. Under amendments in the USA PATRIOT Improvement and Reauthorization Act of 2005, the Attorney General rather than the courts determines whether a state has taken the steps necessary to opt in. States that elect to opt in must still provide a "mechanism for the appointment, compensation, and payment of reasonable litigation expenses of competent counsel in state postconviction proceedings," 28 U.S.C. 2265(c). References to competence standards for appointed counsel were removed. Although it might be thought that the authority to promulgate such standards comes within the Attorney General's newly granted regulatory authority, 28 U.S.C. 2265(b), the Justice Department does not believe the Attorney General has any such authority. The Attorney General's certification that a state has taken the necessary steps to opt in is subject to de novo review in the United States Court of Appeals for the District of Columbia, an appeal which in turn is subject to certiorari review in the Supreme Court, 28 U.S.C. 2265(c). The Attorney General promulgated implementing regulations on December 11, 2008, which were opened for additional comments ending in April 2009. For states that opt in, the AEDPA establishes a one-time automatic stay of execution for state death row inmates carrying through until completion of the federal habeas process, 28 U.S.C. 2262. Previously, the federal habeas statute authorized federal courts to stay the execution of a final state court judgment during the pendency of a state prisoner's federal habeas proceedings and related appeals, 28 U.S.C. 2251 (1994 ed.). Federal appellate courts could consider motions for a stay, pending review of the district court's decision or at the same time they considered the merits of the appeal. This regime encouraged unnecessary litigation over whether a stay was or was not in order and often resulted in state death row inmates waiting until the last hour before simultaneously filing a motion for a stay and an appeal from the district court's denial of the writ. The AEDPA creates a 180-day statute of limitations for filing federal habeas petitions after the close of state proceedings with the possibility of one 30-day extension upon a good cause showing for states that opt in, 28 U.S.C. 2263. When a state opts in, federal habeas review of a claim filed by a state death row inmate is limited to issues raised and decided on the merits in state court unless the state unlawfully prevented the claim from being raised in state court, or the claim is based on a newly recognized, retroactively applicable constitutional interpretation or on newly unearthed, previously undiscoverable evidence, 28 U.S.C. 2264. In cases where the federal habeas application has been filed by a prisoner under sentence of death under the federal law or the laws of a state which has opted in, the government has a right, enforceable through mandamus, to a determination by the district court within 450 days of the filing of an application and by the federal court of appeals within 120 days of the filing of the parties' final briefs, 28 U.S.C. 2266. Federal prisoners who claim that they are being held by virtue of a conviction or sentence rendered contrary to the Constitution or laws of the United States must ordinarily repair to section 2255 of title 28 of the United States Code for collateral review. Congress added section 2255 when it revised title 28 in 1948 to expedite review. The section "replaced traditional habeas corpus for federal prisoners.... The purpose and effect of the statute was not to restrict access to the writ but to make postconviction proceedings more efficient." The section "was intended to mirror §2254 in operative effect," although there are occasionally differences between the two. When the Antiterrorism and Effective Death Penalty Act (AEDPA) amended the provisions governing access to habeas by state prisoners, but in some instances it made comparable changes in section 2255. Thus, both the state inmate's habeas petition and federal convict's section 2255 motion must be filed within a year after their direct appeals become final. "An appeal may be taken to the court of appeals from the order entered on the motion as from a final judgment on application for a writ of habeas corpus." As for procedural default, "[w]here the petitionerâwhether a state or federal prisonerâfailed property to raise his claim on direct review, the writ is available only if the petitioner establishes cause for the waiver and shows actual prejudice resulting from the alleged violation." The Supreme Court has yet to address the question of whether the Teague rule, which requires a new constitutional interpretation be claimed on direct appeal rather in habeas, applies to section 2255. The Court has noted, however, that the lower federal courts have applied the Teague rule to section 2255. The statutory provisions governing both petition and motion restrict relief for second or successive invocations in much the same manner, but they do so in different terminology. For many years, one of the most interesting and perplexing features of federal habeas involved the question of Congress' authority to restrict access to the writ. The Constitution nowhere expressly grants a right of access to the writ, although it might be seen as attribute of the suspension clause or the due process clause or both. Yet the suspension clause says no more than that "the privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it," U.S. Const. Art.I, §9, cl.2. And the due process clause speaks with an equal want of particularity when it declares that, "no person shall ... deprived of life, liberty, or property, without due process of law," U.S. Const. Amend. V. Balanced against this, is the power of Congress to "ordain and establish" the lower federal courts, U.S. Const. Art. III, §1; to regulate and make exceptions to the appellate jurisdiction of the Supreme Court, U.S. Const. Art. III, §2, cl.2; to enact all laws necessary and power to carry into effect the constitutional powers of the courts as well as its own, U.S.Const. Art. I, §8, cl.18; and the power to suspend the privilege to the writ in times of rebellion or invasion, U.S. Const. Art. I, §9, cl.2. In the past, when it seemed that Congress had extinguished the habeas jurisdiction of the lower courts, the Supreme Court observed that it retained jurisdiction to issue the writ on a petition filed originally with the Supreme Court, following a denial for want of jurisdiction or other action in a lower court. When legislation finally attempted to seal off this avenue to the Great Writ as well, the Court confirmed that separation of powers concerns reflected in the suspension clause preclude absolute denial of access to the writ (or to an adequate substitute) except under the circumstances noted in the suspension clause. The Constitution vests the judicial power of the United States in the Supreme Court and in the inferior courts created by Congress, and describes two classes of Supreme Court jurisdiction, original and appellate. It explicitly identifies the kinds of cases which fall within the Court's original jurisdiction; the Court's appellate jurisdiction is portrayed more generally and with the notation that it is subject to Congressional exception and regulation. The Judiciary Act of 1789 declared that "all the before mentioned courts of the United States [the Supreme Court, circuit courts, and district courts] shall power to issue writs of ... habeas corpus.... And that either of the justices of the supreme court, as well as judges of the district courts shall power to grant writs of habeas corpus for the purpose of an inquiry into the cause of commitment.... " After the Civil War, Congress conferred additional habeas authority upon the federal courts as a check against state authorities in the newly reconstructed South by making the writ available to anyone held in violation of the Constitution and other laws of the United States. It vested appellate jurisdiction over lower court exercise of this new authority in the Supreme Court, but made an exception for prisoners held by military authorities. Notwithstanding the exception for prisoners held under military authority, the first case to come before the Court involved William McCardle, a Mississippi newspaper editor, arrested by military authorities for trial by a military commission under the reconstruction laws on charges of inciting "insurrection, disorder and violence." His petition for a writ of habeas corpus was denied by the federal circuit court and he appealed to the Supreme Court. The government moved to dismiss the appeal on the ground that appeal had been expressly excluded in cases involving Confederate sympathizers held in military custody. The Court denied the motionâbecause the military custody exception applied only to the expansion of habeas afforded by the 1867 Act while McCardle called upon the pre-existing habeas authority of the Judiciary Act of 1789âand set the case for argument, Ex parte McCardle , 73 U.S.(6 Wall.) 318 (1868). But before the case could be decided on its merits, Congress repealed the law vesting appellate jurisdiction in the Court. Its jurisdiction to decide the appeal having been withdrawn, the Court dismissed the appeal for want of jurisdiction, Ex parte McCardle , 74 U.S.(7 Wall.) 506 (1868). In doing so, however, the Court made it clear that the loss of its jurisdiction to hear appeals in habeas cases did not mean the loss of its ability to review lower court habeas decisions altogether. The review available prior to the 1867 Act remained available just as the Court had described in its earlier McCardle case: But, though the exercise of appellate jurisdiction over judgments of inferior tribunals was not unknown to the practice of this court before the act of 1867, it was attended by some inconvenience and embarrassment. It was necessary to use the writ of certiorari in addition to the writ of habeas corpus, and there was no regulated and established practice for the guidance of parties invoking the jurisdiction, 73 U.S.(6 Wall.) at 324. The Court reexamined and confirmed this view the following year when it concluded that it had jurisdiction under writs of habeas corpus and certiorari to review the case of another Mississippi newspaper man held by military authorities. The 1868 Act repealed appellate jurisdiction vested in the Court by the 1867 Act. The 1868 Act did not repeal any of the provisions of the Judiciary Act of 1789; the Court's earlier authority to review habeas cases from the lower federal courts through writs of habeas corpus, aided by writs of certiorari, remained available, Ex parte Yerger , 75 U.S.(8 Wall.) 85 (1869). The question as to the scope of Congress' control over Court's appellate jurisdiction in habeas cases surfaced again when a prisoner challenged the AEDPA's habeas limitations in Felker v. Turpin , 518 U.S. 651 (1996). In particular, Felker argued that the provisions of 28 U.S.C. 2244(b) (3)(E) which declared the appellate court determination of whether to authorize a second or successive habeas petition was neither appealable nor "subject to a petition for rehearing or for a writ of certiorari." As before, the Court took no offense to the limitation of habeas appellate jurisdiction. Since the AEDPA "does not repeal [the Court's] authority to entertain a petition for habeas corpus, there can be no plausible argument that the Act has deprived this Court of appellate jurisdiction in violation of Article III, §2," 518 U. S. at 661-62. Review remained possible under the "original" writ of habeas corpus. After McCardle and Yerger , Congress restored the Court's jurisdiction to review habeas cases under less cumbersome appellate procedures in 1885, 23 Stat. 437. Once Congress reopened more normal means of Supreme Court review in habeas cases, recourse to the original writ of habeas corpus in the Supreme Court described in McCardle and Yerger had been infrequent and rarely successful. Seen only as a burdensome way station of the unartful and ill advised, its best known chronicler urged its effective abandonment. Yet it offered the Court in Felker precisely what it supplied in McCardle and Yerger , a means of preserving Supreme Court review, under circumstances where Congress rather clearly intended to deny that possibility, without forcing the Court to address the question of whether Congress' efforts exceed its constitutional authority. The Supreme Court, in an opinion by Chief Justice Rehnquist, declared that "although the Act does impose new conditions on [the Court's] authority to grant relief, it does not deprive [the] Court of jurisdiction to entertain original habeas petitions," Felker v. Turpin , 518 U.S. at 658. Just as McCardle and Yerger "declined to find a repeal of §14 of the Judiciary Act of 1789 as applied to [the] Court by implication ... [ Felker ] decline[s] to find a similar repeal of §2241 of Title 28.... " 518 U.S. at 661. Of course Felker sought not only review, but reversal. The Court refused to grant relief under its original writ authority because Felker's claims satisfied neither the demands of the Act nor those of the Court's Rule 20. It stopped short of holding, however, that it was required to follow the Act's standards in its original writ determinations: "Whether or not we are bound by these restrictions [of the AEDPA], they certainly inform our consideration of original habeas petitions," 518 U.S. at 663. Its reticence may have been calculated to avoid any suggestion that suspension or exception clauses have become dead letters. Although it concluded that Felker had not satisfied the requirement that the original writ issue only upon "exceptional circumstances," the Court did not say why nor did it indicate when such exceptional circumstances might exist. On the other hand, the Court's denial makes it clear that McCardle and Yerger notwithstanding, legislative barriers blocking access to the more heavily traveled paths to review do not by themselves constitute the necessary exception circumstances. It is interesting that the Court sought refuge in the arcane confines of "original" habeas rather than acknowledging that the gatekeeper provision came within Congress' power under the exceptions and regulations clause whatever limitations that power might otherwise be subject to. Given the expedited nature of the proceedings, it might have meant no more than the Court lacked the time to formulate an opinion outlining the dimensions of the clause in terms that a majority on the Court could endorse. A simpler explanation may be that, in deference to the political branches, the Court sought every means to avoid suggesting that they might have overstepped their constitutional bounds. Historically, the Court has been reluctant to holding that the privilege of the writ had been denied other than through a lawful exercise of the suspension clause. The suspension clause, housed among the explicit limitations on the Constitutional powers of Congress, declares that "[t]he Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it," U.S.Const. Art. I, §9, cl.2. The English history of the writ helps explains its purpose. When the King and the royal courts began to recognize restrictions on the writ, the English Parliament had responded with the Habeas Corpus Act of 1679. But in times of crisis, the Parliament allowed that the privilege of the writ should be temporarily suspended upon its approval. Perhaps the most notable of these suspensions occurred during the American Revolution when Parliament annually enacted suspension provisions to permit temporary imprisonment of the rebelling colonists without bail or trial for the duration of the year. Not to be outdone, several colonial legislatures afforded their executive officials similar authority to deal with those loyal to the crown. Early in the Republic, President Jefferson sought and was denied a suspension. During the Civil War, perhaps remembering Congress' rejection of Jefferson's suspension requests, President Lincoln did not bother to request authority to suspend at first. He simply instructed his military commanders, in ever broadening terms, to suspend access to the writ as they felt appropriate. After Chief Justice Taney, acting upon a petition presented in chambers, held the President had exceeded his authority, Ex parte Merryman , 17 Fed.Cas. 144 (No. 9,487) (C.C.D.Md. 1861), Congress ratified Lincoln's efforts with sweeping suspension legislation. In Ex parte Milligan , 71 U.S. (4 Wall.) 2, 130-31 (1866), the Court concluded that the suspension clause operated to afford a prisoner's jailers a defense as to why they should not release the prisoner once the court had issued the writ instructing them to bring the prisoner before the court and justify the imprisonment, "The suspension of the privilege of the writ of habeas corpus does not suspend the writ itself. The writ issues as a matter of course; and on the return made to it, the court decides whether the party applying is denied the right of proceeding further with it." Ex parte Milligan and experience during the period leading up to the drafting of the suspension clause offer scant support for the suggestion that the suspension clauses must be read as a general limitation upon Congress' authority to enact habeas legislation. Nevertheless, there were grounds for the contention that suspension of the privilege of the writ meant more than that, in times and places of trouble, particular individuals might be temporarily denied access to the writ and jailed without bail or trial by a court of competent jurisdiction. In more contemporary times, the Court and scholars pondered the extent to which the suspension clause marks an outer limit of the authority of Congress and the courts to adjust the procedures associated with the writ. If, as these authorities indicated, the suspension clause enjoyed organic qualities that permit it to expand and contract under various environmental circumstances, several evolutionary stages of the modern writ deserve repeating. First, as part of the Reconstruction after the Civil War, Congress expanded federal habeas to make it available to state prisoners held in violation of federal law. Second, by the early forties the Court had completed its slow abandonment of the common law prohibition against use of habeas to attack a conviction or sentence collaterally. Thereafter, the Court used an expanded habeas to help carry the commands of the Bill of Rights to the state criminal procedure. Beginning in the seventies, the Court announced a series of doctrines calculated to eliminate unnecessary delay, repetition and frivolity. The AEDPA extended this last trend. Felker dispelled any contention that the AEDPA's provisions violated the suspension clause. The Georgia Attorney General and the Solicitor General each denied that the suspension clause had been violated. The Court agreed. It did not rely on the proposition that the suspension clause does not extend to convicted prisoners or any other prisoners ineligible for the writ under common law, however, but "assume[d], for purposes of decision here, that the Suspension Clause of the Constitution refers to the writ as it exists today, rather than as it existed in 1789," 518 U.S. at 663-64. Even under this relaxed standard, it found any claim based on Felker's case wanting. The AEDPA's limitation on repetitious or stale claims was seen as a variation of res judicata, which in the area of habeas had been an "evolving body of equitable principles informed and controlled by historical usage, statutory developments, and judicial decisions," 518 U.S. at 664, quoting McCleskey v. Zant , 499 U.S. 467, 489 (1991). "The added restrictions which the Act places on second habeas petitions are well within the compass of this evolutionary process and ... do not amount to a 'suspension' of the writ contrary to Article I, §9," 518 U.S. at 664. Shortly after Felker , however, the Court narrowly construed Congressional efforts to restrict review of various immigration decisions and recognized that the courts retained jurisdiction to review habeas petitions, with the observation that otherwise serious suspension clause issues would arise. The Court was compelled to face the issue of Congress' constitutional authority to absolutely bar access to the writ, which the Court avoided in Felker , in Boumediene v. Bush , 128 S.Ct. 2229 (2008). Boumediene was among the foreign nationals detained at the U.S. Naval Station at Guantanamo Bay, Cuba. Until Hamdi v. Rumsfeld , 542 U.S. 507 (2004) held otherwise, the government questioned whether habeas remained available to citizens seized in a combat zone. Thereafter, the Defense Department established tribunals to determine whether detainees were in fact enemy combatants. However, until Rasul v. Bush , 542 U.S. 466 (2004) held otherwise, the government questioned whether detainees held outside the United States, whether in Guantanamo or elsewhere, rested beyond the habeas reach of U.S. courts. While the detainees' subsequent habeas petitions were pending, Congress passed the Detainee Treatment Act, providing combatant status review tribunal procedures and stating that "no court, justice, or judge shall have jurisdiction to hear or consider" a habeas petition filed on behalf of a foreign national detained in Guantanamo, 119 Stat. 2742 (2006). After the Court held that the Detainee Treatment Act provision did not apply to cases pending prior to its enactment, Hamdan v. Rumsfeld , 548 U.S. 557 (2006), Congress passed the Military Commissions Act, which made the provision applicable to pending cases, 120 Stat. 2636 (2007). At this point, the constitutional issue could not be avoided. The government argued in Boumediene "that noncitizens designated as enemy combatants and detained in territory located outside our Nation's borders have no constitutional rights and no privilege to habeas corpus." The detainees disputed both claims. They argued that the legislation violated the suspension clause which declares that "[t]he privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it." The Court began with the observation that, "[t]he Framers viewed freedom from unlawful restraint as a fundamental precept of liberty, and they understood the writ of habeas corpus as a vital instrument to secure that freedom." The Framers also remembered the history of the English writ, with its periodic suspensions of the writ. "In our own system the Suspension Clause is designed to protect against these cyclical abuses. The Clause protects the right of the detained by a means consistent with the essential design of the Constitution. It ensures that, except during periods of formal suspension, the Judiciary will have a time-tested device, the writ, to maintain the delicate balance of government that is itself the surest safeguard of liberty." These separation of powers concerns and the history of the territorial scope of the writ led the Court to conclude that "Art. I, § 9, cl. 2, of the Constitution has full effect at Guantanamo Bay." And so, the question became, did the suspension clause bar curtailment of habeas jurisdiction in the manner of the Military Commissions Act provision? Since the Military Commissions Act did not constitute a formal suspension of the writ, the issue was "whether the statute stripping jurisdiction to issue the writ avoids the Suspension Clause mandate because Congress has provided adequate substitute procedures for habeas corpus" in the Detainee Treatment Act's combatant status review tribunal procedures. The Court found little precedent to guide its "adequate substitute" assessment. Felker involved a suspension clause challenge, but the provisions there did little more than replicate and codify pre-existing habeas jurisprudence. Besides, Felker arose following a state criminal conviction, hardly a close parallel to the federal detention without trial of Boumediene. Two other "habeas substitute" casesâ Swain v. Pressley , 430 U.S. 372 (1977) and United States v. Hayman , 342 U.S. 205 (1952)âdo little to explain the characteristics of an adequate substitute, because they involved statutes designed to expand rather than curtail habeas relief. So the Court identified, in context of Boumediene , the essential features of habeas corpus and any adequate substitute. First, it noted that "the privilege of habeas corpus entitles the prisoner to a meaningful opportunity to demonstrate that he is being held pursuant to the erroneous application of interpretation of relevant law." Second, "the necessary scope of habeas review in part depends upon the rigor of any earlier proceedings." Thus, "when a person is detained by executive order, rather than, say, after being tried and convicted in a court, the need for collateral review is more pressing." Third, "[f]or the writ of habeas corpus, or its substitute to function as an effective and proper remedy in this context, the court that conducts the habeas proceeding must have the means to correct errors that occur during [prior] proceedings." Fourth, it must have "some authority to assess the sufficiency of the Government's evidence against the detainee. It also must have the authority to admit and consider relevant exculpatory evidence that was not introduced during the earlier proceeding." The Court found the Detainee Treatment Act procedures wanting when assessed against the standards of an adequate substitute for normal habeas procedures. Thus, the provision of the Military Combatants Act, purporting the curtail habeas jurisdiction with respect to Guantanamo detainees, was found to constitute an unconstitutional suspension of the writ. Books and Articles Adelman, The Great Writ Diminished , 35 New England Journal of Criminal Law and Civil Commitment 1 (2009) American Bar Association, Criminal Justice Section, Project on Death Penalty Habeas Corpus, Toward a More Just and Effective System of Review in State Death Penalty Cases (1990) Amsterdam, Criminal Prosecutions Affecting Federally Guaranteed Civil Rights: Federal Removal and Habeas Corpus Jurisdiction to Abort State Court Trial , 113 University of Pennsylvania Law Review 793 (1965) Bator, Finality in Criminal Law and Federal Habeas Corpus for State Prisoners , 76 Harvard Law Review 441 (1963) â. The State Courts and Federal Constitutional Litigation , 22 William & Mary Law Review 605 (1981) Berry, Seeking Clarity in the Federal Habeas For: Determining What Constitutes " Clearly Established " Law Under the Antiterrorism and Effective Death Penalty Act , 54 Catholic University Law Review 747 (2005) Blume, AEDPA: The " Hype " and the " Bite " 91 Cornell Law Review 259 (2006) Brennan, Federal Habeas Corpus and State Prisoners: An Exercise in Federalism , 7 Utah Law Review 423 (1961) Chemerinsky, Thinking About Habeas Corpus , 37 Case Western Reserve Law Review 748 (1987) Cover & Aleinikoff, Dialectical Federalism: Habeas Corpus and the Court , 86 Yale Law Journal 1035 (1977) Desmond, Federal Habeas Corpus Review of State Court Convictions , 50 Georgetown Law Journal 755 (1962) Duker, A Constitutional History of Habeas Corpus (1980) â. The English Origins of the Writ of Habeas Corpus: A Peculiar Path to Fame , 53 New York University Law Review 983 (1978) Falkoff, Back to Basics: Habeas Corpus Procedures and Long-Term Executive Detention , 86 Denver University Law Review 961 (2009) Faust, Rubenstein & Yackle, The Great Writ in Action: Empirical Light on the Federal Habeas Corpus Debate , 18 New York University Review of Law Social Change 637 (1990/1991) Freedman, Habeas Corpus: Rethinking the Great Writ of Liberty (2001) Friedman, A Tale of Two Habeas , 73 Minnesota Law Review 247 (1988) Friendly, Is Innocence Irrelevant? Collateral Attack on Criminal Judgments , 38 University of Chicago Law Review 142 (1970) Garrett, Claiming Innocence , 92 Minnesota Law Review 1629 (2008) Garvey, Death-Innocence and the Law of Habeas Corpus , 56 Albany Law Review 225 (1992) Hammel, Diabolical Federalism: a Functional Critique and Proposed Reconstruction of Death Penalty Federal Habeas , 39 American Criminal Law Review 1 (2002) Hart, The Supreme Court 1958 Term â Forward: The Time of the Justices , 73 Harvard Law Review 84 (1959) Hartnett, The Constitutional Puzzle of Habeas Corpus , 46 Boston College Law Review 251 (2005) Hoffman & King, Rethinking the Federal Role in State Criminal Justice , 84 New York University Law review 791 (2009) Hoffman & Stuntz, Habeas After the Revolution , 1993 Supreme Court Review 65 Hoffstadt, The Deconstruction and Reconstruction of Habeas , 78 Southern California Law Review 1125 (2005) King & Sherry, Habeas Corpus and State Sentencing Reform: A Story of Unintended Consequences , 58 Duke Law Journal 1 (2008) Kovarsky, AEDPA's Wrecks: Comity, Finality , and Federalism , 82 Tulane Law Review 443 (2007) Landes, A New Approach to Overcoming the Insurmountable "Watershed Rule" Exception to Teague's Collateral Review Killer , 74 Missouri Law review 1 (2009) Lasch, The Future of Teague Retroactivity, or "Red r esssability, After Danforth v. Minnesota: Why Lower Courts Should Give Retroactive Effect to New Constitutional Rules of Criminal Procedure in Postconvcition Proceedings , 46 American Criminal law review 1 (2009) Lee, The Theories of Federal Habeas Corpus , 72 Washington University Law Quarterly 151 (1994) â. Section 2254(d) of the Federal Habeas Corpus Statute: Is It Beyond Reason? 56 Hastings Law Journal 283 (2004) Marceau, Deference and Doubt: The Interaction of AEDPA §2254(D)(2) and (E)(1) , 82 Tulane Law review 385 (2007) Neuborne, The Myth of Parity , 90 Harvard Law Review 1105 (1977) Oaks, Legal History in the High Court â Habeas Corpus , 64 Michigan Law Review 451 (1966) â. The " Original " Writ of Habeas Corpus in the Supreme Court , 1962 Supreme Court Review 153 Paschal, The Constitution and Habeas Corpus , 1970 Duke Law Journal 605 Segal, Habeas Corpus, Equitable Tolling, and AEDPA's Statute of Limitations: Why the Schlup v. Delo Gateway Standard for Claims of Actual Innocence Fails to Allev i ate the Plight of Wrongfully Convicted Americans , 31 University of Hawaii Law Review 225 (2008) Sloane, AEDPA ' s " Adjudication on the Merits " Requirement: Collateral Review, Federalism, and Comity 78 St. John's Law Review 615 (2004) Steiker, Incorporating the Suspension Clause: Is There a Constitutional Right to Federal Habeas Corpus for State Prisoners , 92 Michigan Law Review 862 (1994) Stevenson, The Politics of Fear and Death; Successive Problems in Capital Federal Habeas Corpus Cases , 77 New York University Law Review 699 (2002) Traum, Last Best Chance for the Great Writ: Equitable Tolling and Federal Habeas Corpus , 68 Maryland Law Review 545 (2009) Uhrig, A Cast for a Constitutional Right to Counsel in Habeas Corpus , 60 Hastings Law Journal 541 (2009) United States House of Representatives, Habeas Corpus: Hearings Before Subcomm. No. 3 of the House Comm. on the Judiciary , 84 th Cong., 1 st Sess. (1955) â. Habeas Corpus Legislation: Hearings Before the Subcomm. on Courts, Intellectual Property, and the Administration of Justice , 101 st Cong., 2d Sess. (1990) â. Habeas Corpus Issues: Hearings Before the Subcomm. on Civil and Constitutional Rights of the House Comm. on the Judiciary , 102d Cong., 1 st Sess. (1991) â. Habeas Corpus: Hearings Before the Subcom m. on Civil and Constitutional Rights of the House Comm. on the Judiciary , 103d Cong., 1 st & 2d Sess. (1994) United States Senate, Habeas Corpus Reform Act of 1982: Hearings Before the Comm. on the Judiciary , 97 th Cong., 2d Sess. (1982) â. Comprehensive Crime Control Act of 1983: Hearings Before the Subcomm. on Criminal Law of the Comm. on the Judiciary , 98 th Cong., 1 st Sess. (1983) â. Habeas Corpus Reform: Hearing Before the Comm. on the Judiciary , 99 th Cong., 1 st Sess. (1985). Vladeck, Boumediene's Quiet Theory: Access to Courts and the Separation of Powers , 84 Notre Dame Law review 2107 (2009) Walker, The Constitution and Legal Development of Habeas Corpus as the Writ of Liberty (1960) Wechsler, Habeas Corpus and the Supreme Court: Reconsidering the Reach of the Great Writ , 59 University of Colorado Law Review 167 (1988) Weisberg, A Great Writ While It Lasted , 81 Journal of Criminal Law & Criminology 9 (1990) Wolf, Habeas Relief from Bad Science: Does Federal Habeas Corpus Provide Relief for Prisoners Possibly Convicted on Misunderstood Fire Science? 10 Minnesota Journal of Law, Science, and Technology 213 (2009) Wright, Habeas Corpus: Its History and Its Future , 81 Michigan Law Review 802 (1983) Yackle, Postconviction Remedies (1981) Notes and Comments Actually Less Guilty: The Extension of the Actual Innocence Exception to the Sentencing Phase of Non-Capital Cases , 93 Kentucky Law Journal 531 (2004) The Clash of Ring v. Arizona and Teague v. Lane: An Illustration of the Inapplicability of Modern Habeas Retroactivity Jurisprudence in the Capital Sentencing Context , 85 Boston University Law Review 1017 (2005) " Deference Does Not Imply Abandonment or Abdication of Judicial Review " : the Evolution of Habeas Jurisprudence Under AEDPA and the Rehnquist Court , 72 University of Missouri-Kansas City Law Review 739 (2004) A Different View of Habeas: Interpreting AEDPA ' s " Adjudicated on the Merits " Clause When Habeas Corpus Is Understood as an Appellate Function of the Federal Courts , 72 Fordham Law Review 2593 (2004) Habeas Review for State Prisoners , 38 Georgetown Law Journal Annual Review of Criminal Procedure 892 (2009) Review and Vacatur of Certificates of Appealability Issued Under the Denial of Habeas Corpus Petitions , 72 University of Chicago Law Review 989 (2005) 28 U.S.C. § 2255 Relief for Federal Prisoners , 38 Georgetown Law Journal Annual Review of Criminal Procedure 942 (2009) | Federal habeas corpus is a procedure under which a federal court may review the legality of an individual's incarceration. It is most often the stage of the criminal appellate process that follows direct appeal and any available state collateral review. The law in the area is an intricate weave of statute and case law. Current federal law operates under the premise that with rare exceptions prisoners challenging the legality of the procedures by which they were tried or sentenced get "one bite of the apple." Relief for state prisoners is only available if the state courts have ignored or rejected their valid claims, and there are strict time limits within which they may petition the federal courts for relief. Moreover, a prisoner relying upon a novel interpretation of law must succeed on direct appeal; federal habeas review may not be used to establish or claim the benefits of a "new rule." Expedited federal habeas procedures are available in the case of state death row inmates if the state has provided an approved level of appointed counsel. The Supreme Court has yet to hold that a state death row inmate who asserts he is "actually innocent" may be granted habeas relief in the absence of an otherwise constitutionally defective conviction. The Court has made it clear in the case of the Guantanamo detainees that the privilege of the writ may not be legislatively extinguished unless there is an adequate substitute, Boumediene v. Bush , 128 S.Ct. 2229 (2008). This report is available in an abridged version as CRS Report RS22432, Federal Habeas Corpus: An Abridged Sketch , by [author name scrubbed]. |
America’s Shrinking Middle Class: A Close Look at Changes Within Metropolitan Areas
The middle class lost ground in nearly nine-in-ten U.S. metropolitan areas examined
The American middle class is losing ground in metropolitan areas across the country, affecting communities from Boston to Seattle and from Dallas to Milwaukee. From 2000 to 2014 the share of adults living in middle-income households fell in 203 of the 229 U.S. metropolitan areas examined in a new Pew Research Center analysis of government data. The decrease in the middle-class share was often substantial, measuring 6 percentage points or more in 53 metropolitan areas, compared with a 4-point drop nationally.
The shrinking of the middle class at the national level, to the point where it may no longer be the economic majority in the U.S., was documented in an earlier analysis by the Pew Research Center. The changes at the metropolitan level, the subject of this in-depth look at the American middle class, demonstrate that the national trend is the result of widespread declines in localities all around the country.
This report encompasses 229 of the 381 “metropolitan statistical areas” as defined by the federal government. That is the maximum number of areas that could be identified in the Census Bureau data used for the analysis and for which data are available for both 2000 and 2014 (an accompanying text box provides more detail). Together, these areas accounted for 76% of the nation’s population in 2014.
With relatively fewer Americans in the middle-income tier, the economic tiers above and below have grown in significance over time. The share of adults in upper-income households increased in 172 of the 229 metropolitan areas, even as the share of adults in lower-income households rose in 160 metropolitan areas from 2000 to 2014. The shifting economic fortunes of localities were not an either/or proposition: Some 108 metropolitan areas experienced growth in both the lower- and upper-income tiers.
The possibility that a shrinking of the middle class may signal a movement into either the lower-income tier or the upper-income tier is exemplified by the experiences of Goldsboro, NC, and Midland, TX—one community buffeted by broader economic forces and the other buttressed by them.
In Goldsboro—an old railroad junction town and home to Seymour Johnson Air Force Base—the share of adults who are middle income fell from 60% in 2000 to 48% in 2014, or by 12 percentage points. This was one of the greatest decreases among the 229 metropolitan areas analyzed. It was also an unambiguous signal of economic loss as the share of adults in lower-income households in Goldsboro increased sharply, from 27% in 2000 to 41% in 2014.
But in Midland—an energy-based economy that benefited from the rise in oil prices from 2000 to 2014—the shrinking middle class was a sign of financial gains. The share of adults in middle-income households in Midland decreased from 53% in 2000 to 43% in 2014, the fourth-largest drop in the nation. But this was accompanied by rapid growth in the share of adults in upper-income households in Midland, which doubled from 18% in 2000 to 37% in 2014.
Among American adults overall, including those from outside the 229 areas examined in depth, the share living in middle-income households fell from 55% in 2000 to 51% in 2014. Reflecting the accumulation of changes at the metropolitan level, the nationwide share of adults in lower-income households increased from 28% to 29% and the share in upper-income households rose from 17% to 20% during the period.
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The widespread erosion of the middle class took place against the backdrop of a decrease in household incomes in most U.S. metropolitan areas. Nationwide, the median income of U.S. households in 2014 stood at 8% less than in 1999, a reminder that the economy has yet to fully recover from the effects of the Great Recession of 2007-09. The decline was pervasive, with median incomes falling in 190 of 229 metropolitan areas examined. Goldsboro ranked near the bottom with a loss of 26% in median income. Midland bucked the prevailing trend with the median income there rising 37% from 1999 to 2014, the greatest increase among the areas examined.
The decline of the middle class is a reflection of rising income inequality in the U.S. Generally speaking, middle-class households are more prevalent in metropolitan areas where there is less of a gap between the incomes of households near the top and the bottom ends of the income distribution. Moreover, from 2000 to 2014, the middle-class share decreased more in areas with a greater increase in income inequality.
These findings emerge from a new Pew Research Center analysis of the latest available 2014 American Community Survey (ACS) data from the U.S. Census Bureau in conjunction with the 2000 decennial census data. The focus of the study is on the relative size and economic well-being of the middle class in U.S. metropolitan statistical areas. These areas consist of an urban core and surrounding localities with social and economic ties to the core. A metropolitan area may cross state boundaries, such as the New York-Newark-Jersey City, NY-NJ-PA area (see the text box for more details).
A previous report from the Pew Research Center, released on Dec. 9, 2015, focused on national trends in the size and economic well-being of the American middle class from 1971 to 2015. That report demonstrated that the share of American adults in middle-income households shrank from 61% in 1971 to 50% in 2015. The national level estimates presented in the earlier report were derived from Current Population Survey (CPS) data. Thus, they differ slightly from the estimates in this report.
The current and future status of the American middle class continues to be a central issue in the 2016 presidential campaign. Moreover, new economic research suggests that a struggling middle class could be holding back the potential for future economic growth. The national trend is clear—the middle class is losing ground as a share of the population, and its share of aggregate U.S. household income is also declining. But, as the trends in Goldsboro and Midland demonstrate, similar changes in the size of the middle class could reflect very different economic circumstances and reactions at the local level.
U.S. metropolitan statistical areas Metropolitan statistical areas represent the country’s urban centers. By definition, they consist of at least one urbanized area with a population of 50,000 or more people, plus neighboring areas that are socially and economically integrated with the core. The geographic building block for a metropolitan area is a county. But metropolitan areas may cross state boundaries, such as the Washington-Arlington-Alexandria, DC-VA-MD-WV area. The federal government, via the Office of Management and Budget (OMB), identifies 381 metropolitan areas in the U.S. These 381 areas encompass 1,167 of the 3,143 counties in the U.S. About 85% of the U.S. population lives in metropolitan areas; the remainder lives either in smaller urban areas or in rural areas (see http://www.census.gov/population/metro/ and https://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf for more details). Unfortunately, metropolitan areas are not specifically identified in the datasets the U.S. Census Bureau releases for public use. Instead, metropolitan areas must be reconstructed, or approximated, using another geographic identifier—the public-use microdata area (PUMA). By this method, the Integrated Public Use Microdata Series (IPUMS) version of the 2014 American Community Survey—the source data for this report—is able to identify a total of 260 metropolitan areas. These are not always precise replications of the areas defined by OMB because PUMAs occasionally straddle official metropolitan area boundaries (see the description of the variable MET2013 at https://usa.ipums.org/usa-action/variables/alphabetical?id=M). Another limitation of the data is that the definitions for metropolitan areas are changed frequently. The latest OMB definitions were released in 2013 and differ from the metropolitan area delineations in 2000. As a result, the 260 areas identified in the 2014 American Community Survey could be matched to only 229 areas in the public-use version of the 2000 decennial census. These 229 areas, accounting for 76% of the U.S. population in 2014, comprise the sample of metropolitan areas for this report.
Who is middle income?
In this report, “middle-income” Americans are defined as adults whose annual household income is two-thirds to double the national median, after incomes have been adjusted for household size. In 2014, the national middle-income range was about $42,000 to $125,000 annually for a household of three. Lower-income households have incomes less than 67% of the median and upper-income households have incomes that are more than double the median.
The income it takes to be middle income varies by household size, with smaller households requiring less to support the same lifestyle as larger households. Thus, a one-person household needed only $24,000 to $72,000 to be middle income in 2014. But a five-person household had to have an income ranging from $54,000 to $161,000 to be considered middle income.
Middle income or middle class? The terms “middle income” and “middle class” are often used interchangeably. This is especially true among economists who typically define the middle class in terms of income or consumption. But being middle class can connote more than income, be it a college education, white-collar work, economic security, homeownership, or having certain social and political values. Class could also be a state of mind, that is, it could be a matter of self-identification (Pew Research Center, 2008, 2012). The interplay among these many factors is examined in studies by Hout (2007) and Savage et al. (2013), among others. This report uses household income to group people. For that reason, the term “middle income” is used more often than not. However, “middle class” is also used at times for the sake of exposition.
The same middle-income standard is used to determine the economic status of households in all metropolitan areas after their incomes have been adjusted for the cost of living in the area. That means the incomes of households in relatively expensive areas, such as New York-Newark-Jersey City, NY-NJ-PA, are adjusted downward, and the incomes of households in relatively cheaper areas, such as McAllen-Edinburg-Mission, TX, are adjusted upward. Incomes are also adjusted for increases in the prices of goods and services over time when analyzing changes in the status of households from 2000 to 2014.
Metropolitan areas with the largest middle-, lower- and upper-income tiers in 2014
A distinct geographical pattern emerges with respect to which metropolitan areas had the highest shares of adults who were lower income, middle income or upper income in 2014. The 10 metropolitan areas with the greatest shares of middle-income adults are located mostly in the Midwest. Wausau, WI, where 67% of adults lived in middle-income households in 2014, had the distinction of leading the country on this basis, followed closely by Janesville-Beloit, WI (65%). Sheboygan, WI, and four other Midwest areas also placed among the top 10 middle-income areas.
Beyond a shared geography, the top 10 middle-income metropolitan areas are more rooted in manufacturing than the nation overall. Elkhart-Goshen, IN, for example, derived 56% of its gross domestic product (GDP) in 2014 from the manufacturing sector alone. Likewise, the manufacturing sector’s share was 40% in Sheboygan, WI, and more than 20% in Wausau, WI, Lebanon, PA, Ogden-Clearfield, UT, and Kankakee, IL. Overall, manufacturing accounted for only 12% of the nation’s GDP in 2014.
But the role of the manufacturing sector in sustaining the middle class in these Midwest localities is not clear-cut. While manufacturing jobs tend to pay more than average, the sector has been letting go of workers in recent decades. Nationwide, employment in the manufacturing sector shrank 29% from 2000 to 2014. The middle-class communities in the Midwest were not immune to this trend.
Among the Midwestern areas with some of the highest shares of adults who are middle income, the areas hardest hit by the loss in manufacturing jobs were Janesville-Beloit, WI, where manufacturing employment fell 49% from 2000 to 2014, and Youngstown-Warren-Boardman, OH-PA, where it fell 42%. Although at least 6-in-10 adults were middle class in these areas in 2014, both localities experienced losses in the shares of adults who were upper income and increases in the share who were lower income from 2000 to 2014. Thus, the economic status of the middle class in some of the Midwestern localities is not necessarily on firm ground.
The remaining top 10 middle-income metropolitan areas experienced more modest losses in manufacturing jobs and other sectors stepped in to pick up the slack in several areas. For example, from 2000 to 2014, Wausau, WI, lost 3,200 manufacturing jobs but overall private sector employment increased by nearly 1,ooo. Similarly, Eau Claire, WI, had a loss of 2,300 manufacturing jobs but an overall gain of 5,700 private sector jobs. Neither of these two areas experienced much of a change in the shares of adults who were lower income, and Eau Claire witnessed a rise in the share who were upper income. Thus, at least some of these industrial communities held on to their economic standing or saw it improve despite the decay in manufacturing.
Metropolitan areas with the largest upper-income populations are mostly in the Northeast or on the California coast. Midland, TX, the exception to this rule, leads the metropolitan ranking of upper-income areas. Some 37% of the adult population in Midland was upper income in 2014, thanks to a prospering oil economy. High-tech corridors, such as Boston-Cambridge-Newton, MA-NH, and San Jose-Sunnyvale-Santa Clara, CA, are on this list, along with financial and commercial centers, such as Hartford-West Hartford-East Hartford, CT. The adult populations in most of these upper-income areas are also more likely to have a college degree than in the nation overall.
The 10 metropolitan areas with the biggest lower-income tiers are toward the Southwest, several on the southern border. Two metropolitan areas in Texas, Laredo and Brownsville-Harlingen, lead the country in this respect—in both areas 47% of the adult population lived in lower-income households in 2014. Farming communities in central California, namely Visalia-Porterville, Fresno and Merced, are also in this group of lower-income areas. With the exception of Lake Havasu City-Kingman, AZ, Hispanics accounted for more than half of the population in each of these lower-income metropolitan areas in 2014, compared with 17% nationally.
Looking across the broader swath of metropolitan areas, the share of adults who are middle income ranged from a low of 42% in Monroe, LA, to a high of 67% in Wausau, WI, in 2014. But in the majority of metropolitan areas—118 of the 229 examined—the share of adults who were middle income fell within a relatively narrow range of 50% up to 55%. These metropolitan areas are dispersed across the country, not displaying a clear geographical pattern.
In about a quarter of the metropolitan areas in 2014, middle-class adults do not constitute a clear majority of the adult population. Notably, many of the nation’s largest metropolitan areas fall into this group, including Los Angeles-Long Beach-Anaheim, CA, where 47% of adults were middle income; San Francisco-Oakland-Hayward, CA (48%); New York-Newark-Jersey City, NY-NJ-PA (48%); Boston-Cambridge-Newton, MA-NH (49%); and Houston-The Woodlands-Sugar Land, TX (49%).
In some of these metropolitan areas, such as the Boston and San Francisco regions, the relatively small share of the middle-income tier reflects the fact that the upper-income tier is larger than average. But in the Los Angeles region, the middle class is relatively small because the share of adults who are lower income is greater than average.
Perhaps unsurprisingly, the relative size of the lower-income or upper-income tier in a metropolitan area is correlated with the median income of households overall in the area. In Laredo, TX, the area with the largest lower-income tier, the median household income was 35% less than the national median income in 2014. In Midland, TX, the metropolitan area with the largest upper-income tier, the median income was 45% greater than the national median.
The extent of income inequality in a metropolitan area also matters. Middle-income adults account for a larger share of the adult population in metropolitan areas where there is less of a difference between the incomes of the highest-earning and lowest-earning households. Wausau, WI, Janesville-Beloit, WI, and Sheboygan, WI, the three areas with the largest middle classes, are also among the metropolitan areas that had the lowest levels of income inequality in 2014.
Changes in the economic status of metropolitan areas from 2000 to 2014
As the middle of the income distribution hollowed around the country from 2000 to 2014, the movement was more up the economic ladder than down the ladder in some metropolitan areas (winners) while in other areas there was relatively more movement down the ladder (losers).
Nationally, the share of adults in the upper-income tier increased from 17% in 2000 to 20% in 2014, a gain of 2 percentage points. Meanwhile, the share of adults in the lower-income tier increased from 28% to 29%, an increase of 1 percentage point. The difference—1 percentage point—is the net gain for American adults. By this measure, the net gain in economic status varied considerably across metropolitan areas.
The metropolitan areas that experienced the largest gain in economic status from 200o to 2014 are Odessa and Midland, neighboring communities in Texas with energy-based economies. The other major winners among metropolitan areas are varied in nature. New Orleans-Metairie, LA, and Baton Rouge, LA, are relatively prominent in shipping and petrochemicals, but Lafayette, LA, has more of a stake in information technology. Amarillo, TX, is principally a meat packing economy, while Barnstable Town, MA, is a leading tourist destination on Cape Cod.
The areas with the largest gains in economic status are not necessarily areas with high shares of upper-income households. Indeed, several are decidedly average, with the shares of lower-, middle- and upper-income populations closely resembling the national distribution in 2014. In Grand Junction, CO, for example, some 52% of the adult population was middle income in 2014, 28% was lower income and 20% was upper income. But Grand Junction got to the national norm by nearly doubling the share of its upper-income population from 2000 to 2014, making it one of the big winners.
Although other factors may also be at work, the 10 metropolitan areas with the greatest losses in economic status from 2000 to 2014 have one thing in common—a greater than average reliance on manufacturing. Most of these areas, such as Springfield, OH, and Detroit-Warren-Dearborn, MI, are in the so-called Rust Belt. The areas not in the Rust Belt, such as Rocky Mount, NC, and Hickory-Lenoir-Morganton, NC, are also industrial communities.
These areas generally experienced a significant drop in manufacturing employment from 2000 to 2014, ranging from 23% in Fort Wayne, IN, to 51% in Hickory-Lenoir-Morganton, NC, compared with 29% nationally. The jobs lost in manufacturing were not entirely picked up elsewhere as overall private sector employment also fell from 2000 to 2014 in these 10 metropolitan areas, ranging from a decrease of 3% in Goldsboro, NC, to a decrease of 25% in Hickory-Lenoir-Morganton, NC. In contrast, private sector employment in the U.S. overall increased 5% from 2000 to 2014.
Across the 229 metropolitan areas analyzed, 119 were winners, moving up in economic status from 2000 to 2014, and 110 were losers. Changes in median household income are related to the likelihood that a metropolitan area proved to be a winner or a loser. Areas with higher growth in median household income from 1999 to 2014 were more likely to experience an increase in the share of adults who are upper income and a decrease in the share who are lower income. Trends in income inequality also made a difference. Areas with more of an increase in income inequality from 1999 to 2014 experienced larger losses in the middle-class share.
Households experience financial setbacks in most metropolitan areas
American households in all income tiers experienced a decline in their incomes from 1999 to 2014. Nationally, the median income of middle-income households decreased from $77,898 in 1999 to $72,919 in 2014, a loss of 6%. The median incomes of lower-income and upper-income households fell by 10% and 7%, respectively, over this period.
The decline in household incomes at the national level reflected nearly universal losses across U.S. metropolitan areas. Middle-income households lost ground financially in 222 of 229 metropolitan areas from 1999 to 2014. Meanwhile, the median income of lower-income households slipped in 221 metropolitan areas and the median for upper-income households fell in 215 areas.
The trends in income point to economic pressures on the middle class, including in areas where it still holds a large share of the population. In Sheboygan, WI, where 63% of adults are middle class, the median income of the middle class fell by 17%, from $80,281 in 1999 to $66,719 in 2014. Also, middle-income households in areas such as Janesville-Beloit and Eau Claire in Wisconsin and Elkhart-Goshen in Indiana experienced at least a 10% decrease in median incomes. Thus, while these communities are still largely middle class, the financial security of middle-class households in them has deteriorated since 1999.
Looking across metropolitan areas in 2014, there is considerable variation in the median income of households. For households overall, the median income ranged from $39,752 in McAllen-Edinburg-Mission, TX, to $90,743 in Midland, TX. Also, the incomes of households within each income tier varied across metropolitan areas. Among middle-class households, the median income ranged from $64,549 in Hanford-Corcoran, CA, to $81,283 in Racine, WI, a gap of 26%.
Road map to the report
This report divides households in U.S. metropolitan areas into three income tiers—lower income, middle income and upper income—depending on how their incomes compare with the national median household income. Household incomes within each metropolitan area are first adjusted for the cost of living in the area relative to the national average cost of living. Incomes are also adjusted for household size and scaled to reflect a household size of three.
In drawing comparisons over time, households that were in the lower-, middle- or upper-income tier in 2014 are compared with households in those tiers in 2000. The analysis does not follow the same households over time, and some households that were middle income in 2000 may have moved to a different tier in 2014. The demographic composition of each income tier may also have changed over the period.
The first chapter of the report describes how the U.S. adult population was distributed across the three income tiers in 2000 to 2014. It also describes the impact of adjusting incomes in metropolitan areas for the local cost of living.
The report then focuses on the size and economic well-being of lower-, middle- and upper-income tiers in U.S. metropolitan areas in 2014, and on how the metropolitan areas compare in these respects. The final chapter analyzes changes in the relative size and well-being of the income tiers from 2000 to 2014 at the metropolitan level.
Appendix B contains tables with estimates of the shares of the adult populations in lower-, middle- and upper-income tiers in 229 metropolitan areas and changes in those shares from 2000 to 2014. Maps in Appendix B depict these changes pictorially. Additional data on all metropolitan areas, such as median incomes, cost of living and other economic and demographic indicators, are available online for download. ||||| The American middle class is shrinking, and consequently, the lower- and upper-income tiers are gaining share.
In a May 2016 report, the Pew Research Center found that between 2000 and 2014, the share of upper-income adults increased in 172 of the 229 US metro areas it analyzed.
The report also highlighted the 10 areas with the largest upper-income populations, which were mostly in the northeast region or on the California coast.
"Midland, Texas, the exception to this rule, leads the metropolitan ranking of upper-income areas," Pew reported. "Some 37% of the adult population in Midland was upper income in 2014, thanks to a prospering oil economy."
Pew defined upper-income households as those with an income that is more than double the US median household income. Incomes are adjusted for household size and for the cost of living in the area relative to the national average cost of living. "That means the incomes of households in relatively expensive areas, such as New York-Newark-Jersey City, NY-NJ-PA, are adjusted downward," Pew explained in its methodology.
Note that New York City didn't crack the top 10. In addition to Pew adjusting incomes for the cost of living, it's important to recognize that New York City, with a population of about 8.5 million, makes up less than half of the New York-Newark-Jersey City metro area, which has a population of about 19.8 million.
Read on to see which other metro areas joined Midland in the top 10. We included the share of the population that qualifies as upper-income in each metro, along with the median household income of the upper class (also from Pew). | If you'd rather your beater car not stand out in a sea of sports cars, stay clear of Midland, Texas. The metro area has the highest share of upper-class residents in the country, according to a Pew Research report, which found the share of upper-income adults increased in 75% of US metro areas studied from 2000 to 2014, per Business Insider. Pew explains that the income it takes to qualify for the various income levels is affected by household size and location, with "one-person household need[ing] only $24,000 to $72,000 to be middle income in 2014," while the range for a five-person household was $54,000 to $161,000. The areas with the largest share of upper-income residents: Midland, Texas: 37% Bridgeport/Stamford/Norwalk, Conn.: 32% Washington, DC/Arlington/Alexandria: 32% San Jose/Sunnyvale/Santa Clara, Calif.: 31% Barnstable Town, Mass.: 30% Click for the top 10 or discover America's richest city. |
In response to global challenges the government faces in the coming years, we have a unique opportunity to create an extremely effective and performance-based organization that can strengthen the nation’s ability to protect its borders and citizens against terrorism. There is likely to be considerable benefit over time from restructuring some of the homeland security functions, including reducing risk and improving the economy, efficiency and effectiveness of these consolidated agencies and programs. Realistically, however, in the short term, the magnitude of the challenges that the new department faces will clearly require substantial time and effort, and will take additional resources to make it fully effective. Numerous complicated issues will need to be resolved in the short term, including a harmonization of information technology systems, human capital systems, the physical location of people and other assets, and many other factors. Implementation of the new department will be an extremely complex task and will ultimately take years to achieve. Given the magnitude of the endeavor, not everything can be achieved at the same time. As a result, it will be important for the new department to focus on a handful of important things, such as: articulating a clear overarching mission and core values, developing a national strategy, utilizing strategic planning to establish desired outcomes and key priorities, and assuring effective communications systems. Further, effective performance and risk management systems must be established, and work must be completed on threat and vulnerability assessments. GAO and other observers of the federal government’s organization, performance and accountability for terrorism and homeland security functions have long recognized the prevalence of gaps, duplication and overlaps driven in large part by the absence of a central policy focal point, fragmented missions, ineffective information sharing, and institutional rivalries. In recent years, GAO has made numerous recommendations related to changes necessary for improving the government’s response to combating terrorism. Prior to the establishment of the OHS, GAO found that the federal government lacked overall homeland security leadership and management accountable to both the President and Congress. GAO has also stated that fragmentation exits in both coordination of domestic preparedness programs and in efforts to develop a national strategy. Based on evaluations prior to September 11th , GAO identified the following five actions to improve programs to combat terrorism: Create a single high-level federal focal point for policy and coordination, Develop a comprehensive threat and risk assessment, Develop a national strategy with a defined end state to measure Analyze and prioritize governmentwide programs and budgets to identify gaps and reduce duplication of effort, and Coordinate implementation among the different federal agencies. Moreover, in a recent report to Congress on initial concerns about organizing for homeland security since September 11th, GAO indicated that a definition of homeland security should be developed, preferably in the context of the Administration’s issuance of a national strategy for homeland security, in order to improve the effectiveness and coordination of relevant programs. The recent and on-going actions of the Administration to strengthen homeland security functions, including the proposal for establishing DHS, should not be considered a substitute for, nor should they supplant, the timely issuance of a national homeland security strategy. Based on our prior work, GAO believes that the consolidation of some homeland security functions makes sense and will, if properly organized and implemented, over time lead to more efficient, effective and coordinated programs, better intelligence sharing, and a more robust protection of our people, borders and critical infrastructure. At the same time, the proposed cabinet department, even with its multiple missions, will still be just one of many players with important roles and responsibilities for ensuring homeland security. At the federal level, homeland security missions will be require the involvement of the CIA, FBI, the U.S. Marshals Service, the Department of Defense (DOD), and a myriad of other agencies. State and local governments, including law enforcement and first responder personnel, and the private sector all have critical roles to play. If anything, the multiplicity of players only reinforces the recommendations that GAO has made in the past regarding the urgent need for a comprehensive threat, risk and vulnerability assessment and a national homeland security strategy that can provide direction and utility at all levels of government and across all sectors of the country. The development and implementation of a national strategy for homeland security is vital to effectively leveraging and coordinating the country’s assets, at a national rather than federal level, to prevent and defend against future terrorist acts. A national homeland security strategy can help define and establish a clear role and need for homeland security and its operational components, to create specific expectations for performance and accountability, and to build a framework for partnerships that will support the critical role of coordination, communication and collaboration among all relevant parties and stakeholders with homeland security missions. DHS will clearly have a central role in the success of efforts to strengthen homeland security, but it is a role that will be made stronger within the context of a larger, more comprehensive and integrated national homeland security strategy. A reorganization of the government’s homeland security functions along the lines being proposed is a major undertaking and represents one of the largest potential reorganizations and consolidations of government agencies, personnel, programs and operations in recent history. Those involved in this transition should not underestimate the time or effort required to successfully achieve the results the nation seeks. Numerous comparisons have been made between the proposed DHS and other large- scale government reorganizations, including the creation of DOD, the Central Intelligence Agency and the National Security Council as part of the National Security Act of 1947. Other analogies include the 1953 creation of the Department of Health, Education and Welfare, the 1966 establishment of the Department of Transportation (DOT) or the 1977 creation of the Department of Energy (DOE). Each of these cabinet level restructurings involved the transfer and consolidation of disparate functions and the creation of a new cabinet level structure in the Executive Branch. Often it has taken years for the consolidated functions in new departments to effectively build on their combined strengths, and it is not uncommon for these structures to remain as management challenges for decades. It is instructive to note that the creation of DOD, which arguably already had the most similar and aligned missions and functions among the reorganizations mentioned, still required Congress to make further amendments to its organization in 1949, 1953, 1958 and 1986 in order to improve its structural effectiveness. Despite these and other changes made by DOD, GAO has consistently reported over the years that the department – more than 50 years after the reorganization -- continues to have a number of serious management challenges. In fact, DOD has 6 of 22 government wide high risk areas based on GAO’s latest list. This note of caution is not intended to dissuade the Congress from seeking logical and important consolidations in government agencies and programs in order to improve homeland security missions. Rather, it is meant to suggest that reorganizations of government agencies frequently encounter start up problems and unanticipated consequences that result from the consolidations, are unlikely to fully overcome obstacles and challenges, and may require additional modifications in the future to effectively achieve our collective goals for defending the country against terrorism. The Congress faces a challenging and complex job in its consideration of DHS. On the one hand, there exists a certain urgency to move rapidly in order to remedy known problems relating to intelligence and information sharing and leveraging like activities that have in the past and even today prevent the United States from exercising as strong a homeland defense as emerging and potential threats warrant. Simultaneously, that same urgency of purpose would suggest that the Congress be extremely careful and deliberate in how it creates a new department for defending the country against terrorism. The urge to “do it quickly” must be balanced by an equal need to “do it right” in order to ensure a consensus on identified problems and needs, and to be sure that the solutions our government legislates and implements can effectively remedy the problems we face in a reasonably timely manner. It is clear that fixing the wrong problems, or even worse, fixing the right problems poorly, could cause more harm than good in our efforts to defend our country against terrorism. The federal government has engaged in numerous reorganizations of agencies in our nation’s history. Reorganizations have occurred at various times and for various reasons, and have been achieved through executive order, through recommendations by landmark commissions subsequently approved by the Congress, such as the Hoover Commission chaired by former President Herbert Hoover in the late 1940s, and by the Congress through its committee structure. The prevailing consensus on organizational management principles changed considerably during the course of the 20th century and through the various approaches to reorganization, but Hoover’s Commission clearly articulated that agencies and functions of the executive branch should be grouped together based on their major purposes or missions. The government has not always followed Hoover’s lead uniformly, but in recent years most departments except those serving a specific clientele, such as veterans, generally have been organized according to this principle. GAO’s own work on government restructuring and organization over the years has tended to support the overall tendency to emphasize consolidations of agencies as ways to improve the economy, efficiency and effectiveness of government operations. GAO has previously recommended that reorganizations should emphasize an integrated approach, that reorganization plans should be designed to achieve specific, identifiable goals, and that careful attention to fundamental public sector management practices and principles, such as strong financial, technology and human capital management are critical to the successful implementation of government reorganizations. Similarly, GAO has also suggested that reorganizations may be warranted based on the significance of the problems requiring resolution, as well as the extent and level of coordination and interaction necessary with other entities in order to resolve problems or achieve overall objectives. Of course, there are many lessons to be learned from the private sector, which over the past 20 years has experienced an extraordinary degree of consolidation through the merger and acquisition of companies or business units. Among the most important lessons, besides ensuring that synergistic entities can broaden organizational strengths more than limit them, is the need to pay critical attention to the employees impacted by the reorganization, and to align the human capital strategies and core competency components of the organization in order to meet expectations and achieve results. GAO has made similar conclusions and recommendations for the federal government. These observations are particularly apt to the proposed structure of DHS, which would combine an estimated 170,000 employees into a single department, making it the third largest government department in terms of personnel behind DOD and the Department of Veterans Affairs. GAO, based on its own work as well as a review of other applicable studies of approaches to the organization and structure of entities, has concluded that Congress should consider utilizing specific criteria as a guide to creating and implementing the new department. Specifically, GAO has developed a framework that will help Congress and the Administration create and implement a strong and effective new cabinet department by establishing criteria to be considered for constructing the department itself, determining which agencies should be included and excluded, and leveraging numerous key management and policy elements that, after completion of the revised organizational structure, will be critical to the department’s success. The following chart depicts the proposed framework: With respect to criteria that Congress should consider for constructing the department itself, the following questions about the overall purpose and structure of the organization should be evaluated: Definition: Is there a clear and consistently applied definition of homeland security that will be used as a basis for organizing and managing the new department? Statutory Basis: Are the authorities of the new department clear and complete in how they articulate roles and responsibilities and do they sufficiently describe the department’s relationship with other parties? Clear Mission: What will the primary missions of the new DHS be and how will it define success? Performance-based Organization: Does the new department have the structure (e.g., COO, etc.) and statutory authorities (e.g., human capital, sourcing) necessary to meet performance expectations, be held accountable for results, and leverage effective management approaches for achieving its mission on a national basis? Congress should also consider several very specific criteria in its evaluation of whether individual agencies or programs should be included or excluded from the proposed department. Those criteria include the following: Mission Relevancy: Is homeland security a major part of the agency or program mission? Is it the primary mission of the agency or program? Similar Goals and Objectives: Does the agency or program being considered for the new department share primary goals and objectives with the other agencies or programs being consolidated? Leverage Effectiveness: Does the agency or program being considered for the new department create synergy and help to leverage the effectiveness of other agencies and programs or the new department as a whole? In other words, is the whole greater than the sum of the parts? Gains Through Consolidation: Does the agency or program being considered for the new department improve the efficiency and effectiveness of homeland security missions through eliminating duplications and overlaps, closing gaps and aligning or merging common roles and responsibilities? Integrated Information Sharing/Coordination: Does the agency or program being considered for the new department contribute to or leverage the ability of the new department to enhance the sharing of critical information or otherwise improve the coordination of missions and activities related to homeland security? Compatible Cultures: Can the organizational culture of the agency or program being considered for the new department effectively meld with the other entities that will be consolidated? Field structures and approaches to achieving missions vary considerably between agencies. Impact on Excluded Agencies: What is the impact on departments losing components to DHS? What is the impact on agencies with homeland security missions left out of DHS? In addition to the criteria that Congress should consider when evaluating what to include and exclude from the proposed DHS, there are certain critical success factors the new department should emphasis in its initial implementation phase. GAO over the years has made observations and recommendations about many of these success factors, based on effective management of people, technology, financial and other issues, especially in its biannual Performance and Accountability Series on major government departments. These factors include the following: Strategic Planning: Leading results-oriented organizations focus on the process of strategic planning that includes involvement of stakeholders, assessment of internal and external environments, and an alignment of activities, cores processes and resources to support mission-related outcomes. Organizational Alignment: The organization of the new department should be aligned to be consistent with the goals and objectives established in the strategic plan. Communication: Effective communication strategies are key to any major consolidation or transformation effort. Building Partnerships: One of the key challenges of this new department will be the development and maintenance of homeland security partners at all levels of the government and the private sector, both in the United States and overseas. Performance Management: An effective performance management system fosters institutional, unit and individual accountability. Human Capital Strategy: The new department must ensure that that its homeland security missions are not adversely impacted by the government’s pending human capital crisis, and that it can recruit, retain and reward a talented and motivated workforce, which has required core competencies, to achieve its mission and objectives. The people factor is a critical element in any major consolidation or transformation. Information Management and Technology: The new department should leverage state-of-the art enabling technology to enhance its ability to transform capabilities and capacities to share and act upon timely, quality information about terrorist threats. Knowledge Management: The new department must ensure it makes maximum use of the collective body of knowledge that will be brought together in the consolidation. Financial Management: The new department has a stewardship obligation to prevent fraud, waste and abuse, to use tax dollars appropriately, and to ensure financial accountability to the President, Congress and the American people. Acquisition Management: Anticipated as one of the largest of new federal departments, the proposed DHS will potentially have one of the most extensive acquisition requirements in government. Early attention to strong systems and controls for acquisition and related business processes will be critical both to ensuring success and maintaining integrity and accountability. Risk Management: The new department must be able to maintain and enhance current states of homeland security readiness while transitioning and transforming itself into a more effective and efficient structural unit. The proposed DHS will also need to immediately improve the government’s overall ability to perform risk management activities that can help to prevent, defend against and respond to terrorist acts. Prior to the terrorist attacks of September 11th, the United States in recent years had made what must be characterized as limited progress in strengthening its efforts to protect the nation from terrorist attacks. Mainly through the mechanisms of executive orders and presidential decision directives (PDD), the President has sought to provide greater clarity and leadership in homeland security areas. For instance, PDD 39 in June 1995 assigned the Department of Justice, through the FBI, responsibility as the lead federal agency for crisis management, and FEMA as the lead federal agency for consequence management for domestic terrorist attacks. In May 1998, PDD 62 established the position of national coordinator for terrorism within the National Security Council. PDD 63 emphasized new efforts to protect the nation’s critical infrastructure from attack. Through legislation, the federal government increased the availability of grants for first responder training and instituted more regular tabletop training exercises involving state and local governments. A number of blue ribbon panels or commissions were also convened prior to September 11th and, after studying the government’s structure and methods for protecting against terrorism, made many important and timely recommendations for improving our approach. Panels led by former Senators Gary Hart and Warren Rudman, as well as former Virginia Governor James Gilmore, made sweeping recommendations about remedying the gaps, overlaps and coordination problems in the government’s ability to detect, prevent, and respond to terrorist attacks in a comprehensive manner across both the public and private sectors. Indeed, the Hart-Rudman Commission recommended the creation of a new department to consolidate many of the government’s homeland security functions. In recent years, GAO has also issued numerous reports and made many recommendations designed to improve the nation’s approach to homeland security. We summarized our work in a report completed just prior to the September 11th attacks, in which we found that: (1) overall leadership and coordination needed to be addressed; (2) limited progress had been made in developing a national strategy and related guidance and plans; (3) federal response capabilities had improved but further action was still necessary; (4) federal assistance to state and local governments could be consolidated; and (5) limited progress had been made in implementing a strategy to counter computer-based threats. We have continued to re- iterate that a central focal point such as OHS be established statutorily in order to coordinate and oversee homeland security policy within a national framework. Today, we re-emphasize the need for OHS to be established statutorily in order to effectively coordinate activities beyond the scope of the proposed DHS and to assure reasonable congressional oversight. As mentioned previously, after the September 11th terrorist attacks, Congress and the Administration took a number of actions designed to improve our ability to combat terrorism and protect the nation. The President created OHS via executive order. Congress passed legislation creating the Transportation Security Administration (TSA) to better secure transportation and the USA Patriot Act to improve our capabilities to detect and prevent terrorist acts. Congress also introduced legislation to restructure a variety of homeland security related functions, and Senator Lieberman and Representative Thornberry proposed legislation to create a new cabinet department to consolidate many homeland security functions. On June 6th, President Bush announced a new proposal to create a Department of Homeland Security and submitted draft legislation to Congress on June 18th. Like the congressional approaches to creation of a new department, the President’s plan also reflected many of the recent commissions’ suggestions and GAO’s recommendations for improved coordination and consolidation of homeland security functions. As indicated by Governor Ridge is his recent testimony before Congress, the creation of DHS would empower a single cabinet official whose primary mission is to protect the American homeland from terrorism, including: (1) preventing terrorist attacks within the United States; (2) reducing America’s vulnerability to terrorism; and (3) minimizing the damage and recovering from attacks that do occur. In our initial review of the proposed DHS, we have used the President’s draft bill of June 18th as the basis of our comments. Nevertheless, we recognize that the proposal has already – and will continue -- to evolve in the coming days and weeks ahead. The President’s proposal creates a cabinet department with four divisions, including: Information Analysis and Infrastructure Protection Chemical, Biological, Radiological and Nuclear Countermeasures Additionally, the proposed DHS would be responsible for homeland security coordination with other executive branch agencies, state and local governments, the private sector and other entities. The legislation transfers to the new department intact the U.S. Secret Service and the U.S. Coast Guard. For the organizations transferred to the new department, the proposed DHS would be responsible for managing all of their functions, including non-homeland security functions. In some instances, these other responsibilities are substantial. Finally, the proposal would exempt the new department from certain authorities, including some civil service protections, the Federal Advisory Committee Act, and procurement laws, while providing authority to authorize new rules by regulation and to reprogram portions of departmental appropriations. The new department’s Inspector General would be modeled on that office in the Central Intelligence Agency. Homeland Security Missions One of the most critical functions that the new department will have is the analysis of information and intelligence to better foresee terrorist threats to the United States. As part of its function, the Information Analysis and Infrastructure Protection division of the department would assess the vulnerability of America’s key assets and critical infrastructure, including food and water systems, agriculture, health systems, emergency services, banking and finance, communications and information systems, energy (including electric, nuclear, gas and oil and hydropower), transportation systems, and national monuments. The President’s proposal seeks to transfer to the new department the FBI’s National Infrastructure Protection Center (other than the computer investigations and operations center), the National Communications System of DOD, the Commerce Department’s Critical Infrastructure Assurance Office, the Computer Security Division of the National Institute of Standards and Technology (NIST), the National Infrastructure Simulation and Analysis Center of DOE, and the General Services Administration’s (GSA) Federal Computer Incident Response Center. The Administration has indicated that this new division would for the first time merge under one roof the capability to identify and assess threats to the homeland, map those threats against our vulnerabilities, issue timely warnings, and organize preventive or protective action to secure the homeland. Considerable debate has ensued in recent weeks with respect to the quality and timeliness of intelligence data shared between and among relevant intelligence, law enforcement and other agencies. The proposal would provide for the new department to receive all reports and analysis related to threats of terrorism and vulnerabilities to our infrastructure and, if the President directs, information in the “raw” state that has not been analyzed. The agencies and programs included in the Administration’s proposal to consolidate information analysis functions are clear contributors to the homeland security mission and, if well coordinated or consolidated, could provide greater benefits in incident reporting, analysis and warning, and the identification of critical assets. Such a critical endeavor, however, will still require detailed planning and coordination, including a national critical infrastructure protection strategy, both inside and outside the new department, to ensure that relevant information reaches the right offices and officials who can act upon it. Furthermore, in considering this portion of the legislation, Congress ought to evaluate whether the new division as proposed, despite the provision stipulating access, will have sufficient ability to obtain all necessary information, assistance and guidance to make decisions in a timely, effective manner. Within this framework, the Congress will likely need to make trade-off decisions between concerns over access and utility of information and the concerns that some Americans may have about civil rights issues associated with any larger consolidation of domestically-oriented intelligence operations. It is also important to note that while certain cyber/critical infrastructure protection functions are proposed for transfer into DHS, a significant number of federal organizations involved in this effort will remain in their existing locations, including the Critical Infrastructure Protection Board, the Joint Task Force for Computer Network Operations, and the Computer Investigations and Operations Section of the FBI. The homeland security proposal is silent on the relationship between those entities that will be consolidated and their role in coordinating with the entities left out of the new department, and Congress should consider addressing this important issue. Ultimately, a greater emphasis on strategic planning and information sharing clearly will be necessary to resolve the significant shortfalls that the government has faced in sharing critical intelligence and infrastructure information in order to better achieve homeland security expectations. The consolidation of some intelligence functions into DHS may help solve these problems. The division of the new department responsible for chemical, biological, radiological and nuclear countermeasures will consolidate several important scientific, research and development programs, including the select agent registration enforcement programs and activities of the Department of Health and Human Services (HHS), programs at DOE dealing with chemical and biological national security and non- proliferation supporting programs, the nuclear smuggling programs, the nuclear assessment program, energy security and assurance activities, and life science activities of DOE’s biological and environmental research program related to microbial pathogens. Also proposed for transfer are the Environmental Measurements Laboratory, portions of the Lawrence Livermore National Laboratory, the Plum Island Animal Diseases Center of the Department of Agriculture (USDA), and DOD’s National Bio-Weapons Defense Analysis Center, which is not yet operational. The proposal seeks to remedy the current fragmented efforts of the government and its private sector partners to counter and protect against the threat of weapons of mass destruction. To the extent that this division would develop or coordinate the development of national policy to strengthen research and development in the areas of countermeasures to chemical, biological, radiological and nuclear weapons, such a goal conforms to previous recommendations we have made. As with the information analysis division discussed previously, this division would also have extensive needs to coordinate with other similar programs throughout the government – programs which are not included in the new department. For example, there are civilian applications of defense related research and development underway at the Defense Threat Reduction Agency (DTRA) and the National Institutes of Health (NIH) has some on-going responsibility for bioterrorism research. Whether such programs ought to be considered for inclusion in the new department, or whether these issues can be coordinated simply through improved interaction, are also questions that should be considered in the larger context of the legislation. The proposal also calls for transferring elements of the Lawrence Livermore Lab to the new department. At this point, without sufficient additional information, it is not clear what the impact that such a shift would have on the lab’s overall research program or the significant contract workforce that is engaged in much of the activities. Congress may also need to further explore whether the relationships the proposal would establish between the new department’s secretary and the Secretary of HHS will efficiently and effectively result in the desired outcomes for civilian research, as the nature of the agreements and delegations to implement such functions are not clear. Nevertheless, despite some unresolved ambiguity, it will be important for the Congress to capture the synergy that potentially can be created by combining compatible research and development activities. One of the larger divisions of the new department would handle Border and Transportation Security, and would include the transfer of the U.S. Customs Service, INS, the Animal and Plant Health Inspection Service (APHIS) of USDA, the Coast Guard and TSA, both from DOT, and GSA’s Federal Protective Service. The proposal seeks to bring together under one department all of the border control functions, including authority over the issuance of visas, in order to consolidate operations for border controls, territorial waters and transportation systems. This effort is designed to balance prevention of terrorist activities against people, food and other goods, and transportation systems with the legitimate, rapid movement of people and commerce across borders and around the country. Under the proposed transfer, APHIS and Plum Island (as part of the Infrastructure division) would be moved from USDA, but other units would remain. In addition, no Food and Drug Administration (FDA) food safety functions were identified for transfer. Thus, the focus appears to be on enhancing protection of livestock and crops from terrorist acts, rather than on protecting the food supply as a whole. In previous reports, GAO has described our current fragmented federal food supply safety structure and, in the absence of a single food safety agency, Congress may wish to consider whether the new department would be able to prevent, detect, and quickly respond to acts of terrorism in the food supply. Another issue that Congress may need to consider is the organizational separation of facilities management functions and building security responsibilities contained in the Federal Protective Service’s mission. Since the provision of security is a key facilities management function, security needs to be integrated into decisions about the location, design and operation of federal facilities. Moreover, many federal agencies provide their own building security. The proposal does not address the coordination or further consolidation of such functions, and it is also silent on GSA’s role in leading the Interagency Security Committee, which develops the federal government’s security policies and oversees the implementation of such policies in federal facilities. Finally, the last division, Emergency Preparedness and Response, would combine the government’s various agencies and programs that provide assistance, grants, training and related help to state and local governments, to first responder personnel and support other federal agencies that may confront terrorist attacks, major disasters and other emergencies. The proposal would transfer to the new department the Federal Emergency Management Agency (FEMA), the Office of Domestic Preparedness and the Domestic Emergency Support Teams of the Justice Department and National Domestic Preparedness Office of the FBI, as well as the Strategic National Stockpile and certain public health preparedness responsibilities of HHS. This consolidation would allow the secretary of the new department to oversee federal government assistance in the domestic disaster preparedness training of first responders and would coordinate the government’s disaster response efforts. Although certain other disaster response functions are not specifically included in the proposed department, the DHS secretary would have the authority to call on other response assets, such as DOE’s nuclear incident response teams. Additionally, Congress might wish to examine the likely impact of establishing agreements between the DHS and HHS secretaries that retain authority for the conduct of certain public health related activities at DHS but the execution of the activities would be left to HHS. The legislation for the new department indicates that DHS, in addition to its homeland security responsibilities, will also be responsible for carrying out all other functions of the agencies and programs that are transferred to it. In fact, quite a number of the agencies proposed to be transferred to DHS have multiple functions – they have missions directly associated with homeland security and missions that are not at all related to homeland security. In our initial review of the impacted agencies, we have not found any missions that would appear to be in fundamental conflict with the department’s primary mission of homeland security. However, the Congress will need to consider whether many of the non-homeland security missions of those agencies transferred to DHS will receive adequate funding, attention, visibility and support when subsumed into a department that will be under tremendous pressure to succeed in its primary mission. As important and vital as the homeland security mission is to our nation’s future, the other non-homeland security missions transferred to DHS for the most part are not small or trivial responsibilities. Rather, they represent extremely important functions executed by the federal government that, absent sufficient attention, could have serious implications for their effective delivery and consequences for sectors of our economy, health and safety, research programs and other significant government functions. Some of these responsibilities include: maritime safety and drug interdiction by the Coast Guard, collection of commercial tariffs by the Customs Service, regulation of genetically engineered plants by APHIS, advanced energy and environmental research by the Lawrence Livermore and Environmental Measurements labs, responding to floods and other natural disasters by FEMA, and authority over processing visas by the State Department’s consular officers. These examples reveal that many non-homeland security missions are likely to be integrated into a cabinet department overwhelmingly dedicated to protecting the nation from terrorism. Congress may wish to consider whether the new department, as proposed, will dedicate sufficient management capacity and accountability to ensure the execution of non- homeland security missions, as well as consider potential alternatives to the current framework for handling these important functions. Likewise, Congress may wish to consider the impact that the proposed transfer of certain agencies and programs may have on their “home” departments. Both the Department of the Treasury and the DOT will see significant reductions in size and changes to their overall departmental missions, organization, and environments if the legislation is enacted. As a result, these changes provide an opportunity for Congress and the Administration to consider what is the proper role for these and other federal government entities. As the impact of reductions of missions and personnel are contemplated at several cabinet departments, it is appropriate for Congress to reconsider the relevance or fit of federal programs and activities. This process requires that we ask important, yet sometimes tough questions, such as: What is the national need? How important is it relative to other competing needs and available resources? What is the proper federal role, if any? Who are the other key players (e.g., state and local government, non- government organizations, private sector)? How should we define success (e.g., desired outcomes)? What tools of government create the best incentives for strong results – (direct funding, tax incentives, guarantees, regulation, enforcement)? What does experience tell us about the effectiveness of any current related government programs? Based on the above, what programs should be reduced, terminated, started or expanded? In fact, given the key trends identified in GAO’s recent strategic plan for supporting the Congress and our long range fiscal challenges, now is the time to ask three key questions: (1) what should the federal government do in the 21st century? (2) how should the federal government do business in the 21st century? and (3) who should do the federal government’s business the 21st century? These questions are relevant for DHS and every other federal agency and activity. As the proposal to create DHS indicates, the terrorist events of last fall have provided an impetus for the government to look at the larger picture of how it provides homeland security and how it can best accomplish associated missions. Yet, even for those agencies that are not being integrated into DHS, there remains a very real need and possibly a unique opportunity to rethink approaches and priorities to enable them to better target their resources to address our most urgent needs. In some cases, the new emphasis on homeland security has prompted attention to long- standing problems that have suddenly become more pressing. For example, we’ve mentioned the overlapping and duplicative food safety programs in the federal government. While such overlap has been responsible for poor coordination and inefficient allocation of resources, these issues assume a new, and potentially more foreboding, meaning after September 11th given the threat from bio-terrorism. A consolidated approach can facilitate a concerted and effective response to new threats. The federal role in law enforcement, especially in connection with securing our borders, is another area that is ripe for re-examination following the events of September 11th. In the past 20 years, the federal government has taken on a larger role in financing criminal justice activities that have traditionally been viewed as the province of the state and local sector. Given the daunting new law enforcement responsibilities, and limited budgetary resources at all levels, it is important to consider whether these additional responsibilities should encourage us to reassess criminal justice roles and responsibilities at the federal, state and local level. As Congress considers legislation for a new homeland security department, it is important to note that simply moving agencies into a new government organizational structure will, by itself, be insufficient to create the dynamic environment that will be required to meet performance expectations for protecting and defending the nation against terrorism. It is critical to recognize the important management and implementation challenges the new department will face. These challenges are already being faced at TSA, which is under considerable pressure to build a strong workforce and meet numerous deadlines for integrating technology and security issues. Moreover, Congress should be aware that some fundamental problems currently exist with certain of the agencies that are slated to become part of the new department. DHS will need to pay special attention to these agencies to ensure that they can maintain readiness and confront significant management problems simultaneously. For example, several of the agencies currently face challenges in administering their programs, managing their human capital, and implementing and securing information technology systems. Absent immediate and sustained attention to long-standing issues, these problems are likely to remain once the transfer is complete. Our past work has demonstrated that these management challenges exist within INS, APHIS, and FEMA. Program management and implementation has been a particular challenge for INS, which has a dual mission of enforcing laws regarding illegal immigration and providing immigration and naturalization services for aliens who enter and reside legally in the U.S. This “mission overload” has impeded INS from succeeding at either of its primary functions. In 1997, the bipartisan Commission on Immigration Reform stated that INS’ service and enforcement functions were incompatible and that tasking one agency with carrying out both functions caused problems, such as competition for resources, lack of coordination and cooperation, and personnel practices that created confusion regarding mission and responsibilities. For example, INS does not have procedures in place to coordinate its resources for initiating and managing its programs to combat alien smuggling. In several border areas, multiple antismuggling units exist that operate autonomously, overlap in jurisdiction, and report to different INS officials. In addition, INS field officials lack clear criteria on which antismuggling cases to investigate, resulting in inconsistent decision- making across locations. Managing human capital also remains a challenge for INS, APHIS, and FEMA. For INS, issues in managing its human capital management have impacted various functions. Because of cut backs or delays in training, a large portion of INS’ staff will be relatively inexperienced and inadequately trained for processing visas for specialty occupations. Furthermore, while INS officials believe they need more staff to keep up with the workload, they could not specify the types of staff needed or where they should be located because of the lack of a staff allocation model and procedures. APHIS, one of the three primary agencies responsible for monitoring the entry of cargo and passengers into the U.S., has struggled to keep pace with its heavy workload at ports of entry. These conditions have led APHIS inspectors to shortcut cargo inspection procedures, thereby jeopardizing the quality of the inspections conducted. In addition, APHIS has little assurance that it is effectively deploying its limited inspection resources because of weaknesses in its staffing models. Likewise, FEMA still struggles with using its disaster relief staff in an effective manner although it has reported progress in improving its Disaster Field Office operations through convening a review council to study its operations and the implementation of corrective actions. Agencies’ management efforts to implement information technology systems, as well as utilize and secure the information within these systems, have also proved challenging. For example, INS lacks an agencywide automated case tracking and management system to help it monitor and coordinate its investigations. Further, INS’ antismuggling intelligence efforts have been hampered by an inefficient and cumbersome process for retrieving and analyzing intelligence information and by the lack of clear guidance to INS staff about how to gather, analyze, and disseminate intelligence information. Within APHIS, no central automated system has been implemented to allow for agency-wide access to information on the status of shipments on hold at ports, forcing inspection staff to use a manual record keeping system that does not reliably track this information. For FEMA, material weaknesses in its access controls and program change controls have contributed to deficiencies within its financial information systems. The creation of the Department of Homeland Security will be one of the largest, most complex re-structurings ever under taken. The department and its leaders will face many challenges, including organizational, human capital, process, technology and environmental issues that must be sorted out at the same time that the new department is working to maintain readiness. Strategic planning will be critical to maintaining readiness, managing risk, and balancing priorities, and the department’s broad mission will depend on many partners to ensure success. Moreover, sound management systems and practices will be integral to the department’s ability to achieve its mission effectively and to be held accountable for results. A strategic plan should be the cornerstone of DHS’ planning structure. It should clearly articulate the agency’s mission, goals, objectives, and the strategies the department will use to achieve those goals and objectives. It provides a focal point for all planning efforts, and is integral to how an organization structures itself to accomplish its mission. In addition, a comprehensive transition plan that clearly delineates timetables and resource requirements will be vital to managing this re-organization. A consolidation of this magnitude cannot be accomplished in months. As shown by past experience, it will take years to truly consolidate the programs, functions and activities being brought under the umbrella of DHS. The President has taken a significant first step by establishing a transition planning office in the Office of Management and Budget. Congress should consider requiring a comprehensive transition plan and periodic progress reports, as part of its oversight of the consolidation actions. The magnitude of the challenges that DHS faces calls for comprehensive and rigorous planning to guide decisions about how to make the department work effectively and achieve high performance. Leadership will be needed to establish long-range plans, to direct and coordinate the actions of the department’s various interrelated policies and functions, and to achieve its goals and objectives. Management also must develop specific short-range plans to efficiently direct resources among functions and to assist in making decisions regarding day-to-day operations. DHS must define priorities, goals and plans in concert with other agencies, Congress, and outside interest groups, while also leveraging the potential and dynamism of its new units. Leading organizations start by assessing the extent to which their programs and activities contribute to meeting their mission and intended results. An organization’s activities, core processes, and resources must be aligned to support missions and help it achieve its goals. It is not uncommon for new leadership teams to find that their organization structures are obsolete and inadequate to modern demands, or that spans of control and field to headquarters ratios are misaligned, and that changes are required. For example, the agencies proposed to be included in DHS have unique field structures, the integration of which will be a significant challenge given the natural tension between organizational, functional and geographic orientations. Flexibility will be needed to accomplish this difficult management task, as well as many others. The President’s proposal will consolidate many homeland security functions and activities. However, the new department ultimately will be dependent on the relationships it builds both within and outside the department for its ultimate success. As we indicated, the recently reported intelligence sharing challenges provide ample illustration of the need for strong partnerships and full communication among critical stakeholders. There is a growing understanding that any meaningful results that agencies hope to achieve are accomplished through matrixed relationships or networks of governmental and nongovernmental organizations working together toward a common purpose. These matrixed relationships exist on at least three levels. First, they support the various internal units of an agency. Second, they include the relationships among the components of a parent department as well as those between individual components and the department. Matrixed relationships are also developed externally, including relationships with other federal agencies, domestic and international organizations, for-profit and not-for-profit contractors, and state and local governments, among others. Internally, leading organizations seek to ensure that managers, teams, and employees at all levels are given the authority they need to accomplish their goals and work collaboratively to achieve organizational outcomes. Communication flows up and down the organization to ensure that line staff has the ability to provide leadership with the perspective and information that the leadership needs to make decisions. Likewise, senior leadership keeps line staff informed of key developments and issues so that the staff can best contribute to achieving the organization’s goals. There is no question that effective communication strategies are key to any major consolidation or transformation effort. Collaboration, coordination, and communication are equally important across agency boundaries. However, our work also has shown that agencies encounter a range of barriers when they attempt coordination. In our past work, we have offered several possible approaches for better managing crosscutting programs – such as improved coordination, integration, and consolidation–to ensure that crosscutting goals are consistent, program efforts are mutually reinforcing, and where appropriate, common or complementary performance measures are used as a basis for management. The proposed legislation provides for the new department to reach out to state and local governments and the private sector to coordinate and integrate planning, communications, information, and recovery efforts addressing homeland security. This is important recognition of the critical role played by nonfederal entities in protecting the nation from terrorist attacks. State and local governments play primary roles in performing functions that will be essential in effectively addressing our new challenges. Much attention has already been paid to their role as first responders in all disasters, whether caused by terrorist attacks or natural disasters. State and local governments also have roles to play in protecting critical infrastructure and providing public health and law enforcement response capability. The private sector’s ownership of energy and telecommunications is but one indicator of the critical role that the corporate sector must play in addressing threats to our homeland. Achieving national preparedness and response goals hinge on the federal government’s ability to form effective partnerships with nonfederal entities. Therefore, federal initiatives should be conceived as national, not federal in nature. The new department needs to gain the full participation and buy-in of partners in both policy formulation and implementation to develop effective partnerships. DHS will need to balance national interests with the unique needs and interests of nonfederal partners. One size will not, nor should it, fit all. It is important to recognize both the opportunities and risks associated with partnerships. While gaining the opportunity to leverage the legal, financial and human capital assets of partners for national preparedness, each of these nonfederal entities has goals and priorities that are independent of the federal government. In designing tools to engage these actors, the department needs to be aware of the potential for goal slippage and resource diversion. For instance, in providing grants to state or local governments for training and equipment, federal officials should be alert to the potential for these governments to use grants to substitute for their own resources in these programs, essentially converting a targeted federal grant into a general revenue sharing initiative. Maintenance of effort provisions can be included to protect against such risk. Designing and managing the tools of public policy to engage and work constructively with third parties has become a new skill required of federal agencies, and one that needs to be addressed by the new department. A good illustration of the relevance of partnerships involves the protection of the nation’s borders against threats arriving aboard shipping cargo. The Customs Service currently inspects only two percent of the cargo arriving in American ports and it is probably unrealistic to expect significant increases in coverage through inspections even with higher numbers of federal inspectors. Rather, a more effective strategy calls for the federal government to work proactively with shipping companies to gain their active buy-in to self-inspections and more rigorous protection of cargo. Partnerships with foreign ports are also critical in preventing the shipping of suspicious items in the first place. Although critical to national security, the protection of our ports illustrates the critical role played by partnerships spanning sectors of the economy and nations. A performance management system that promotes the alignment of institutional, unit and individual accountability to achieve results will be an essential component for success of the new department. High-performing organizations know how the services and functions they deliver contribute to achieving the results of their organizations. Our work has shown that there are three characteristics for high-performing, results-oriented organizations. These organizations: (1) define clear missions and desired outcomes; (2) measure performance to gauge progress; and (3) use performance information as a basis for decision-making. These characteristics are consistent with the Government Performance and Results Act, and should be the guide to developing a strong performance management system for the new department. The first step for the department’s leadership will be to define its mission and desired outcomes. Activities, core processes and resources will have to be aligned. This will require cascading the department’s goals and objectives down through the organization. Further, an effective performance management system will require involvement of stakeholders and a full understanding of the environment in which the department operates. A good performance management system fosters both institutional, unit and individual accountability. One way to inculcate a culture of excellence or results-orientation is to align individual employees’ performance expectations with agency goals and desired outcomes so that individuals understand the connection between their daily activities and their organization’s success. High-performing organization have recognized that a key element of a fully successful performance management system is to create a “line of sight” that shows how individual responsibilities contribute to organizational goals. These organizations align their top leadership’s performance expectations with organizational goals and then cascade performance expectations to lower organizational levels. An organization’s people are its most important asset. People define an organization, affect its capacity to perform, and represent the knowledge- base of the organization. In an effort to help agency leaders integrate human capital considerations into daily decision-making and in the program results they seek to achieve, we have recently released an exposure draft of a model of strategic human capital management that highlights the kinds of thinking that agencies should apply and steps they can take to manage their human capital more strategically. The model focuses on four cornerstones for effective human capital management – leadership; strategic human capital planning; acquiring, developing, and retaining talent; and results-oriented organization culture. The new department may find this model useful in helping guide its efforts. One of the major challenges DHS faces is the creation of a common organizational culture to support a unified mission, common set of core values, and organization-wide strategic goals, while simultaneously ensuring that the various components have the flexibility and authorities they need to achieve results. When I have discussed the need for government-wide reforms in strategic human capital management, I have often referred to a three-step process that should be used in making needed changes. This process may be helpful to Congress as it considers the human capital and other management authorities it will provide the department. Like other departments, DHS should be encouraged to make appropriate use of all authorities at its disposal. We often find that agencies are not taking full advantage of the tools, incentives, and authorities that Congress and the central management agencies have provided. DHS will also find it beneficial to identify targeted statutory changes that Congress could consider to enhance DHS’s efficiency and effectiveness (e.g., additional hiring and compensation flexibility for critical skill areas, targeted early out and buyout authority). In this regard, Congress may wish to consider the approach it used in forming TSA, which included provisions for a progress report and related recommendations for congressional action. The new department will face tremendous communications and systems and information technology challenges. Programs and agencies will be brought together in the new department from throughout the government. Each will bring their communications and information systems. It will be a tremendous undertaking to integrate these diverse systems to enable effective communication and share information among themselves, as well as those outside the department. Further, considering the sensitivity of the data at the proposed department, securing its information systems and networks will be a major challenge. Since 1996, we have reported that poor information security is a widespread federal government problem with potentially devastating consequences. Effective leadership and focused management control will be critical to meeting these challenges. We recommend that a CIO management structure as prescribed by the Clinger-Cohen Act of 1996 be established to provide the leadership necessary to direct this complex, vital function. Further, it will be critical that an enterprise architecture be developed to guide the integration and modernization of information systems. Enterprise architecture consists of models that describe how the enterprise operates now and how it needs to operate in the future. Without enterprise architecture to guide and constrain IT investments, stovepipe operations and systems can emerge, which in turn lead to needless duplication, incompatibilities, and additional costs. By its very nature, the combining of organizations will result in stovepipes. It will require strong leadership, re- engineering of business processes to meet corporate goals, and effective planning to integrate, modernize and secure the new department’s information systems. Effective knowledge management captures the collective body of information and intellect within an organization, treats the resultant knowledge base as a valued asset, and makes relevant parts of the knowledge base available to decisionmakers at all levels of the organization. Knowledge management is closely aligned with enterprise architecture management, because both focus on systematically identifying the information needs of the organization and describing the means for sharing this information among those who need it. The people brought together in the new department will have diverse skills and knowledge. It will be critical for the new department to build an effective knowledge management capability. Elements involved in institutionalizing this function include: Deciding with whom (both internally and externally) to share Deciding what knowledge is to be share, through performing a knowledge audit and creating a knowledge map; Deciding how the knowledge is to be share, through creating apprenticeship/mentoring programs and communities of practice for transferring tacit knowledge, identifying best practices and lessons learned, managing knowledge content, and evaluating methods for sharing knowledge; and Sharing and using organizational knowledge, through obtaining sustained executive commitment, integrating the knowledge management function across the enterprise and embedding it in business models, communications strategies, and measuring performance and value. The events of September 11th and the efforts of the Administration and Congress to protect the country from future terrorist attacks have generated enormous demands on resources in a short period of time. The FY2002 appropriations and the nearly simultaneous transmission of an emergency supplement and FY2003 budget request were followed shortly by a second FY2002 supplemental. This rapid growth in spending for homeland security has shifted budget priorities in ways that we are only beginning to understand. As Congress considers the resource implications of the proposed Department, both budget and accountability issues need to be addressed. It will be important for both OMB and the Congress to develop a process to track the budget authority and outlays associated with homeland security through the President’s budget proposals, congressional budget resolution, and the appropriations process. A tracking system is vital for Congress to address the total spending for homeland security as well as to ensure that the total allocations are in fact implemented subsequently in the authorization and appropriations process. In addition, DHS must also track the spending for the non-homeland security missions of the department. As we have indicated, many important activities relevant to homeland security will continue to be housed in other agencies outside the department, such as the protection of nuclear power plants and drinking water, and require the new department to work collaboratively. The proposed legislation addresses this challenge in several instances by authorizing the new department to transfer and/or control resources for some of these related programs. For instance, the department is given authority to set priorities for research on bioterrorism by the Department of Health and Human Services, but it is unclear how this will occur. Although consolidating activities in one department may produce savings over the longer term, there will be certain transition costs in the near term associated with setting up the new agency, acquiring space, providing for new information systems, and other assorted administrative expenses. Some of these costs, such as developing new systems, may be one time in nature, while others, such as the overhead necessary to administer the department will be continuing. Congress may very well decide that these new costs should be absorbed from the appropriations of programs and agencies being consolidated into the department. Indeed, it appears that the Administration’s proposal seeks to facilitate this by authorizing the Secretary to draw up to five percent of unobligated balances from accounts to be included in the new department after notification to the Congress. While these transfers may be sufficient to fund the transition, the costs of the transition should be transparent to Congress up front as it considers the proposed new department. The initial estimated funding for the new department is $37.7 billion. This estimate reportedly includes the total funds, both for homeland and non- homeland security missions of the incoming agencies and programs. Agencies and programs migrating to the new department have different financial systems, as well as financial management challenges. Further, the new department would have numerous financial relationships with other federal departments, as well as state and local government and the private sector. It will be essential that the department have very strong financial stewardship to manage these funds. It is important to re-emphasize that the department should be brought under the Chief Financial Officers (CFO) Act and related financial management statutes. A Chief Financial Officer, as provided by the CFO Act, would be a significant step to ensuring the senior leadership necessary to cut across organizational boundaries to institutionalize sound financial systems and practices and provide good internal controls and accountability for financial resources. Systems that produce reliable financial information will be critical to managing day-to- day operations and holding people accountable. Sound acquisition management is central to accomplishing the department’s mission. While the details are still emerging, the new department is expected to spend billions annually to acquire a broad range of products, technologies, and services from private-sector companies. Getting the most from this investment will depend on how well the department manages its acquisition activities. Our reports have shown that that some of the government’s largest procurement operations are not always particularly well run. In fact, three agencies with major procurement operations – DOD, DOE and NASA -- have been on our high- risk list for the last 10 years. To ensure successful acquisition outcomes, and effectively integrate the diverse organizational elements that will comprise the new department, we believe the department needs to adopt a strategic perspective on acquisition needs, including the establishing a Chief Acquisition Officer. Key elements of a strategic approach involve leadership, sound acquisition strategies, and a highly skilled workforce. Our acquisition best practices work shows that a procurement executive or chief acquisition officer plays a crucial role in implementing a strategic approach to acquisition. At the leading companies we visited, such officials were corporate executives who had authority to influence decisions on acquisitions, implement needed structural process or role changes, and provide the necessary clout to obtain buy-in and acceptance of reengineering and reform efforts. Good acquisition outcomes start with sound acquisition strategies. Before committing substantial resources, the department should look across all of its organizational elements to ensure that requirements are linked to mission needs and costs and alternative solutions have been considered. Finally, having the right people with the right skills to successfully manage acquisitions is critical to achieving the department’s mission. Many agencies are experiencing significant skill and experience imbalances. This will be a particular leadership challenge for the acquisition function. The administration’s proposal would allow the department to deviate from the normal federal acquisition rules and laws. Certainly, there could be situations where it might be necessary to expedite or streamline procurement processes so that the department is not handicapped in its ability to protect American citizens against terrorism. We support such flexibilities in these situations. However, it is not clear from our review of the administration’s proposal exactly what flexibilities are being requested. Moreover, depending on how far-reaching such flexibilities go, we are concerned about whether the department will have an acquisition workforce with the skills and capabilities to execute the acquisition function outside of the normal procurement structure. A risk assessment is central to risk management and involves the consideration of several factors. Generally, the risk assessment process is a deliberate, analytical approach to identify which threats can exploit which vulnerabilities in an organization’s specific assets. The factors to consider include analyzing the vulnerabilities, identifying and characterizing the threat, assessing the value of the asset, identifying and costing countermeasures, and assessing risks. After these factors are considered, an organization can decide on implementing actions to reduce the risk. It is very difficult to rank threats. However, it is more constructive to consider a range of threats and review the vulnerabilities and criticality of assets when contemplating decisions on resource allocations toward homeland security. As a nation, we must be able to weather a variety of threat-oriented scenarios with prudent planning and execution. Therefore it is very important to ensure that the right resources are applied to the most appropriate areas based on a risk based management approach. In summary, I have discussed the reorganization of homeland security functions and some critical factors for success. However, the single most important element of a successful reorganization is the commitment of top leaders. Top leadership involvement and clear lines of accountability for making management improvements are critical to overcoming an organization’s natural resistance to change, marshalling the resources needed to improve management, and building and maintaining organization-wide commitment to new ways of doing business. Organizational cultures will not be transformed, and new visions and ways of doing business will not take root without strong and sustained leadership. Strong and visionary leadership will be vital to creating a unified, focused organization, as opposed to a group of separate units under a single roof. Madame Chair, this concludes my written testimony. I would be pleased to respond to any questions that you or members of the Subcommittee may have at this time. 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Homeland Security: A Risk Management Approach Can Guide Preparedness Efforts (GAO-02-208T, October 31, 2001). Homeland Security: Need to Consider VA’s Role in Strengthening Federal Preparedness (GAO-02-145T, October 15, 2001). Homeland Security: Key Elements of a Risk Management Approach (GAO-02-150T, October 12, 2001). Homeland Security: A Framework for Addressing the Nation’s Issues (GAO-01-1158T, September 21, 2001). Combating Terrorism: Intergovernmental Cooperation in the Development of a National Strategy to Enhance State and Local Preparedness (GAO-02-550T, April 2, 2002). Combating Terrorism: Enhancing Partnerships Through a National Preparedness Strategy (GAO-02-549T, March 28, 2002). Combating Terrorism: Critical Components of a National Strategy to Enhance State and Local Preparedness (GAO-02-548T, March 25, 2002). Combating Terrorism: Intergovernmental Partnership in a National Strategy to Enhance State and Local Preparedness (GAO-02-547T, March 22, 2002). Combating Terrorism: Key Aspects of a National Strategy to Enhance State and Local Preparedness (GAO-02-473T, March 1, 2002). Combating Terrorism: Considerations For Investing Resources in Chemical and Biological Preparedness (GAO-01-162T, October 17, 2001). Combating Terrorism: Selected Challenges and Related Recommendations (GAO-01-822, September 20, 2001). Combating Terrorism: Actions Needed to Improve DOD’s Antiterrorism Program Implementation and Management (GAO-01-909, September 19, 2001). Combating Terrorism: Comments on H.R. 525 to Create a President’s Council on Domestic Preparedness (GAO-01-555T, May 9, 2001). Combating Terrorism: Observations on Options to Improve the Federal Response (GAO-01-660T, April 24, 2001). Combating Terrorism: Comments on Counterterrorism Leadership and National Strategy (GAO-01-556T, March 27, 2001). Combating Terrorism: FEMA Continues to Make Progress in Coordinating Preparedness and Response (GAO-01-15, March 20, 2001). Combating Terrorism: Federal Response Teams Provide Varied Capabilities: Opportunities Remain to Improve Coordination (GAO-01- 14, November 30, 2000). Combating Terrorism: Issues in Managing Counterterrorist Programs (GAO/T-NSIAD-00-145, April 6, 2000). Combating Terrorism: Need to Eliminate Duplicate Federal Weapons of Mass Destruction Training (GAO/NSIAD-00-64, March 21, 2000). Combating Terrorism: Observations on the Threat of Chemical and Biological Terrorism (GAO/T-NSIAD-00-50, October 20, 1999). Combating Terrorism: Need for Comprehensive Threat and Risk Assessments of Chemical and Biological Attack (GAO/NSIAD-99-163, September 7, 1999). Combating Terrorism: Observations on Growth in Federal Programs (GAO/T-NSIAD-99-181, June 9, 1999). Combating Terrorism: Analysis of Potential Emergency Response Equipment and Sustainment Costs (GAO-NSIAD-99-151, June 9, 1999). Combating Terrorism: Use of National Guard Response Teams Is Unclear (GAO/NSIAD-99-110, May 21, 1999). Combating Terrorism: Issues to Be Resolved to Improve Counterterrorism Operations (GAO/NSIAD-99-135, May 13, 1999). Combating Terrorism: Observations on Federal Spending to Combat Terrorism (GAO/T-NSIAD/GGD-99-107, March 11, 1999). Combating Terrorism: Opportunities to Improve Domestic Preparedness Program Focus and Efficiency (GAO-NSIAD-99-3, November 12, 1998). Combating Terrorism: Observations on the Nunn-Lugar-Domenici Domestic Preparedness Program (GAO/T-NSIAD-99-16, October 2, 1998). Combating Terrorism: Threat and Risk Assessments Can Help Prioritize and Target Program Investments (GAO/NSIAD-98-74, April 9, 1998). Combating Terrorism: Spending on Governmentwide Programs Requires Better Management and Coordination (GAO/NSIAD-98-39, December 1, 1997). Bioterrorism: The Centers for Disease Control and Prevention’s Role in Public Health Protection (GAO-02-235T, November 15, 2001). Bioterrorism: Review of Public Health and Medical Preparedness (GAO- 02-149T, October 10, 2001). Bioterrorism: Public Health and Medical Preparedness (GAO-02-141T, October 10, 2001). Bioterrorism: Coordination and Preparedness (GAO-02-129T, October 5, 2001). Bioterrorism: Federal Research and Preparedness Activities (GAO-01- 915, September 28, 2001). Chemical and Biological Defense: Improved Risk Assessments and Inventory Management Are Needed (GAO-01-667, September 28, 2001). West Nile Virus Outbreak: Lessons for Public Health Preparedness (GAO/HEHS-00-180, September 11, 2000). Need for Comprehensive Threat and Risk Assessments of Chemical and Biological Attacks (GAO/NSIAD-99-163, September 7, 1999). Chemical and Biological Defense: Program Planning and Evaluation Should Follow Results Act Framework (GAO/NSIAD-99-159, August 16, 1999). Combating Terrorism: Observations on Biological Terrorism and Public Health Initiatives (GAO/T-NSIAD-99-112, March 16, 1999). Aviation Security: Vulnerabilities in, and Alternatives for, Preboard Screening Security Operations (GAO-01-1171T, September 25, 2001). Aviation Security: Weaknesses in Airport Security and Options for Assigning Screening Responsibilities (GAO-01-1165T, September 21, 2001). Aviation Security: Terrorist Acts Illustrate Severe Weaknesses in Aviation Security (GAO-01-1166T, September 20, 2001). Aviation Security: Terrorist Acts Demonstrate Urgent Need to Improve Security at the Nation's Airports (GAO-01-1162T, September 20, 2001). Aviation Security: Long-Standing Problems Impair Airport Screeners' Performance (RCED-00-75, June 28, 2000). Aviation Security: Slow Progress in Addressing Long-Standing Screener Performance Problems (T-RCED-00-125, March 16, 2000). Aviation Security: Progress Being Made, but Long-term Attention Is Needed (T-RCED-98-190, May 14, 1998). Aviation Security: FAA's Procurement of Explosives Detection Devices (RCED-97-111R, May 1, 1997). Aviation Security: Commercially Available Advanced Explosives Detection Devices (RCED-97-119R, April 24, 1997). Aviation Security: Technology's Role in Addressing Vulnerabilities (T- RCED/NSIAD-96-262, September 19, 1996). Aviation Security: Urgent Issues Need to Be Addressed (T-RCED/NSIAD- 96-251, September 11, 1996). Aviation Security: Immediate Action Needed to Improve Security (T- RCED/NSIAD-96-237, August 1, 1996). Critical Infrastructure Protection: Significant Challenges in Safeguarding Government and Privately Controlled Systems from Computer-Based Attacks (GAO-01-1168T, September 26, 2001). Critical Infrastructure Protection: Significant Challenges in Protecting Federal Systems and Developing Analysis and Warning Capabilities (GAO-01-1132T, September 12, 2001). Critical Infrastructure Protection: Significant Challenges in Developing Analysis, Warning, and Response Capabilities (GAO-01-1005T, July 25, 2001). Critical Infrastructure Protection: Significant Challenges in Developing Analysis, Warning, and Response Capabilities (GAO-01-769T, May 22, 2001). Critical Infrastructure Protection: Significant Challenges in Developing National Capabilities (GAO-01-323, April 25, 2001). Critical Infrastructure Protection: Challenges to Building a Comprehensive Strategy for Information Sharing and Coordination (T- AIMD-00-268, July 26, 2000). Critical Infrastructure Protection: Comments on the Proposed Cyber Security Information Act of 2000 (T-AIMD-00-229, June 22, 2000). Critical Infrastructure Protection: National Plan for Information Systems Protection (AIMD-00-90R, February 11, 2000). Critical Infrastructure Protection: Comments on the National Plan for Information Systems Protection (T-AIMD-00-72, February 1, 2000). Critical Infrastructure Protection: Fundamental Improvements Needed to Assure Security of Federal Operations (T-AIMD-00-7, October 6, 1999). Critical Infrastructure Protection: Comprehensive Strategy Can Draw on Year 2000 Experiences (AIMD-00-1, October 1, 1999). Disaster Assistance: Improvement Needed in Disaster Declaration Criteria and Eligibility Assurance Procedures (GAO-01-837, August 31, 2001). Federal Emergency Management Agency: Status of Achieving Key Outcomes and Addressing Major Management Challenges (GAO-01-832, July 9, 2001). FEMA and Army Must Be Proactive in Preparing States for Emergencies (GAO-01-850, August 13, 2001). Results-Oriented Budget Practices in Federal Agencies (GAO-01-1084SP, August 2001). Managing for Results: Federal Managers’ Views on Key Management Issues Vary Widely Across Agencies (GAO-010592, May 2001). | Since September 11, the President and Congress have taken aggressive steps to protect the nation, including creating an Office of Homeland Security (OHS); passing new laws, such as the USA Patriot Act and an emergency supplemental spending bill; establishing a new agency to improve transportation security; and working with federal, state, and local governments, private sector entities, non-governmental organizations and other countries to prevent future terrorist acts and to bring those individuals responsible to justice. More recently, Congress and the President have proposed greater consolidation and coordination of various agencies and activities. The President has proposed establishing a Department of Homeland Security (DHS) and has sent draft legislation to Congress. This testimony focuses on two major issues: (1) the need for reorganization and the principles and criteria to help evaluate what agencies and missions should be included in or left out of the new DHS and (2) issues related to the transition, cost, and implementation challenges of the new department. |
The Coca-Cola Company (NYSE:KO) Morgan Stanley Global Consumer Conference November 19, 2014 8:35 AM ET
Executives
Sandy Douglas - SVP, Global Chief Customer Officer and President, Coca-Cola North America
Analysts
Dara Mohsenian - Morgan Stanley
Dara Mohsenian
I am Dara Mohsenian, Morgan Stanley's Beverage and Household Products Analyst. We’re very excited to have Coca-Cola with us here today. Sandy Douglas will be presenting, the Senior Vice President at Coke and Global Chief Customer Officer and President of Coca-Cola North America.
It’s a great time to have Sandy here. Clearly, Coke has a very successful long-term track record but recent trends have been a bit more difficult for last couple of years. And the company has responded in our minds with very significant positive changes announced recently. And North America is really on the forefront of a lot of those changes in terms of a pricing focus and mix focus under Sandy's leadership recently, marketing boost and pending bottler refranchise.
In terms of format today, Sandy is going to present for about half of the time and then we’re going to move to a fireside chat. So thanks for coming, Sandy.
Sandy Douglas
Good morning, everybody. I'm happy to be here this morning with you to tell you the progress that we're making in the North America business, the company’s oldest market. And I think the best way to summarize the presentation - well I actually got to start with this, obviously you’re cautioned by our forward-looking statements that can be found on our Investor website.
The best way to describe it is to say this, our focus in North America playing our role in the Coke global jigsaw puzzle is to focus on driving economic profit and value creation for the company.
And to do that with three main levers, accelerating topline growth, margin expansion and capital efficiency. And that is our role in North America and we’re going to do that. The action agenda is driving brand growth to improving quantity and quality of all types of marketing but led by great advertising.
Second, focusing on an insight driven and refreshment oriented value price pack architecture, and I’m going to get into the specifics of that.
Next is, continuing our significant momentum that we’ve achieved over the last four or five years in the still categories through acquisition and organic brand development, we've become a powerful participant in the non carbonated beverage business.
And then finally the sort of ultimate enabler of this both at the topline but also in operating margin expansion and significant economic profit improvement, is the refranchising of the bottling assets that we acquired from CCE, that we've been working together with our bottlers over the past few years to completely rearchitect the U.S. bottling system for growth in the modern market that we're competing in, in a differentiated way, but in a way that would allow the Coca-Cola Company to return to its more fundamental and basic concentrate model.
So let me start with the core pillars, and this strategy is really not changed. The thing I want to emphasize though, is that the Coca-Cola Company’s business is driven by its brands. The penetration, the frequency, the amount per serving, the consumer spend with our brands, is the core value driver of our growth and our business.
The second one is our ability to turn that value, unit value for customers, and to focus on - and particularly in the United States where a tremendous number of the customers including the one that just presented in here, our deep and long term partners of ours and we do this business with them and for them.
And our ability to create value with them is a core lever in the value that we’re able to capture from our brands. And then finally capability, capability of our total system to sustain and repeat our success.
So let me start on the brands and I'll give you a little headline on Sparkling and then I'll get in some results. I would describe our Sparkling strategy as a very massive and intense return to the fundamentals, the basics of brand building.
What you see on the left of the slide is an outdoor board that’s up around the country. Now the focus is on the intrinsic, delicious, amazing taste of an ice cold Coke. The basic marketing is a key element because Coke has a mysterious taste and the ability to romance it, to celebrate it, to attract it, to sell it, to invite with it, is what makes Coke grow. It has been always that way and in a contemporary modern digital way today, it is no less significant and I'll show you the results we’re starting to achieve.
Importantly though, the packaging architecture is important and we talked a lot about packaging over the years. But in this case we’ve actually sharpened our focus and we had some key insights that are trend based, that are based on the health and wellness trends, that suggests consumer’s strong desire for smaller packages, for premium packages, that don’t give them too much liquid, they give them the ability to refresh and enjoy but not necessarily to over-consume.
And we’re well-set-up to take advantage of that trend because of our proprietary packaging and I'll show you how that's starting to work.
And then finally we are building a one-to-one relationship. You’ll hear that from a lot of marketers now, is their capability of data and the ability of loyalty programs gives you the ability to communicate and understand almost on a one-on-one basis what consumers want, where they want it, and how you can incentivize purchase and build your relationship with them.
But we're also building relationships in a different way. Our industry has come together in a pre-competitive way. We sit on the same boards. We are working together to address the significant issues that are public policy issues that impact our industry.
The Healthy Weight Commitment Foundation, the NGO that was made up of retailers and consumer products companies that work together to take a 1.5 trillion calories out of the American diet was built and led.
The Chair of the Board is Indra Nooyi from PepsiCo and I'm the Treasurer of the Board. And we are committed to work together with NGOs and government to help bring solutions to key issues whether they'd be recycling or health and wellness.
And our industry sees this pre-competitive corporation as a critical element in building and sustaining a sustainable and healthy business going forward. That's our strategy. Its quality and quantity of marketing, excellent package price, pack execution, intimate relationship with consumers and pre-competitive energy with our industry to tackle the core issues that we face.
So, we put this in place very fast this year at the beginning of the year with a lot of intensity. But we said, it would take a little while. We’ve said that this kind of change would not drive results right away and that's a theme of companies that are getting back to their basics.
So here are the results, and I want to spend probably the most of my time, I want to spend on this slide. The data on the left to the slide is Nielsen data through the month of October, it’s publicly available. And what you see here, is retail sales change, all Nielsen Measured Channels.
The top one is for brand Coca-Cola, the middle one is for the Coca-Cola Companies carbonated soft drink portfolio, our Sparkling portfolio, and then the bottom one is the industry with us in it. So you get a sense of this.
The strategy was put in place at the beginning of the year. We invested in marketing, news productivity, to accelerate marketing. And what you can see is a pretty dramatic increase in the sales takeaway for Coca-Cola.
Now that's come through the full engagement of the strategy I discussed on the previous page. But it's strong. In fact it's stronger than it really needs to be for Coke USA to play its role in the global jigsaw puzzle.
But the marketing is beginning to work. We ran a promotion that many of you know in the third quarter called Share a Coke that was very effective, but what you can see is an October well after Share a Coke was over, the results accelerated further.
Now gas is cheaper, the weather has been better, market is always - we talk about marketing and good weather and weather when the marketing is not working. But nonetheless you see the relationship of the brand to the industry and even to the total Coca-Cola Company. The 3% sales growth for our Sparkling beverages since the middle part of the year-end sustaining and accelerating slightly is an algorithm that works for us.
The package piece is probably the most kind of exciting refinement of our strategy that we put in place. If you’ve listened to any of our earnings calls, Irial and I have said on each call that we had made a change in North America. And it’s an operating strategic change, which is that we’re going to capture price wherever we can see it in partnership with our customers, that no commodity increase will go unmet by a pricing action.
You see that in our juice business today. Our juice commodity picture as all of you know has been very, very rough, and we took price, we led price immediately. And we’ve done a good job of capturing it.
Well, similarly in Sparkling we’re taking price - but I really want to push on this slide a little bit because it’ll give you an understanding of the details of the strategy.
On the left, our two liters and 12 ounce cans. For the last three decades those packages have been the massively promoted, somewhat deflationary, almost commodity oriented part of this category. It's had itself in kind of a knot of price promotion and growth and price elasticity and if you get price you can't get volume and it’s been a pretty tough picture.
In the middle is where the consumer trend is happening. It's where the special Coca-Cola packaging is happening. And on the way - in a way it’s a little misleading, the immediate consumption package is a 20 ounce but we actually include our 15 ounce packages which have been a true engine of explosive growth in convenience stores and other immediate consumption channels.
But what I’ve given you below is the price per occasion, and this is really important because this is going to help you understand the road to success in North America.
Look at the 12 ounce can, the 12 ounce can is $0.31, that’s year-to-date what it cost at retail and all the retail channels. Now it’s usually sold in the 12 or 24 packs you don’t recognize that price, but that’s the per can price.
Many cans are right next to it. About 33% more sales per unit but about a third less gallonage per unit. So, think if the whole business was a trade between one of those cans, 12 ounce to 7.5 ounce, the lead in the report would be Coke North America volume down 33%, sales revenue up 33%.
That's part of the challenge we have of communicating our strategy because the consumer wants the smaller package. Now, they don’t all want it at once. The package is on the left have been part of the promotional metrics of this category for as long as most of us have been alive. And there is a whole lot of retail energy and inertia in that direction.
But our strategy at Coke is to give the consumer the prices and the packages they want on this side and sell these for a premium but drive them per mix. Where on the left side, take as much weight as we can possibly take of price increases and maintain sponsorship from our customers.
So the big retailers and us working together to maximize the value of the category. Price on the left and physical case volume on the right. Now that’s important, physical case. So I'm not talking about gallonage unit cases. I'm talking about how many cases of 7.5 ounce at $0.40 per can and 8 ounce at $0.81 per can, or a 12 ounce which is actually Coke from Mexico, how much of those can I possibly sell on racks, beautifully merchandized all over the store with food to give people that smaller refreshing ice cold consumer Coca-Cola experience.
Look at the year-to-date sales in Nielsen for these packs. And look at the second half sales in Nielsen for these packs and remember 15 ounce cans is an immediate consumption. But that on a page is an operating strategy. It is very, very early days. These packages are very small percentage of our mix, individually very small.
In total, they are up to about 20%, 25% above or can mix. But these little ones in here are 1%, 2% but they are growing very rapidly. So, the lever is price bias on the left, manage the price volume equation. Fairly price elastic, drive physical case volume to excellent merchandizing and great marketing to drive double-digit retail growth on the competitively strong smaller on trend packs and maximize your immediate consumption. That's our Coke strategy.
From a still's perspective, we've been on kind of the role in still's in the U.S. For 29 straight quarters we set a goal back in 2007 that we are going to move from a very disadvantaged position to become the fastest growing still beverage company in North America. And to my knowledge of the skilled players, we have achieved that every year.
29 quarters where we’ve either held or grown value share in a row. And this year is no exception and just like I said earlier, it’s a brand story. I mean you've got on the left simply as the leader of the brigade there, despite all of the commodity price increases and pricing Simply is still growing its dollar sales this year, year-to-date by 5%.
As you know, our juice portfolio has significantly flipped the juice business and taken leadership. And that group of people down in Houston is taking over a very significant place in milk that I will describe in a minute.
But a couple other highlights, Powerade, dollar sales up 1% this year, DASANI flat water, dollar sales up 7%, SmartWater up 18, what a gem that has turned out to be and the growth continues.
In Tea, Gold Peak Tea 23% over prior, we wrote a very good set of ads and ran four weeks of them in June and the business went up to 30% to 40% after them. Next year we plan to invest significantly more behind the award winning copy that we have there. And so on, Honest Tea is up 19% as we build a premium play in Tea.
And then the brands on the right are kind of new platforms and you’ve heard a lot about our partnerships with Keurig and Monster. Fairlife is a new product that's been launched and it will be in stores in late December. It's basically the premiumisation of milk. Our ambition there is to create the Simply of milk.
Okay. I'm going to wrap up here a little bit on refranchising and then sit down for Dara. Basically, I'm going to cover these four things. The priorities for our refranchise beverage partnership model, how we’re doing the timing, some general structure and some balance sheet impact.
Most of the details for how refranchising can be thought about and the dashboard will be shared by Kathy Waller at her recently announced meeting with all of you in December.
Essentially what we’ve created with our bottlers is a new business system. A business system where we have a new operating model for large customers, for manufacturing, for IT and for shared services.
Essentially, we are taking all the things that scale is necessary for and then we are using those to empower our bottlers to do excellent local execution. This allows the Coca-Cola Company to streamline its model and we give the territory to the bottlers who have a proven track record of growing faster than their peers. And the net effect of the total is a better model for the Coca-Cola Company and faster more predictable growth.
Our roadmap for refranchising as we’ve talked about, we're franchising half of what we acquired from CCE by 2017 works like this, and you can see the schedule there and the timing of the percentages and the cases.
From a structure of the agreements, if you look at the general structure of refranchising agreements, we expect the vast majority of them to fall under a sub-bottling arrangement, instead of an outright purchase. Under this agreement we expect to receive quarterly payments for these territory rights.
But to be clear the quarterly payments are for the territory distribution rights and separate from the ongoing revenue that we will generate from selling concentrate and/or finished products to these bottlers.
Lastly an important element of the agreements will require that bottlers continue to purchase finished products from Coca-Cola refreshments to service these territories. The entire agreement ensures that our continued implementation of our competitively-advantaged national supply chain will remain intact.
And then finally, I know that there are a lot of questions about how the capital recovery will happen - and I thought I’ll give you this information with Kathy to give you more when she meets with you. And when we think about refranchising approximately half of the U.S. distribution, part of the bottle/can business, there are obviously significant balance sheet equations, it’s really easiest to think about three primary buckets, the distribution assets, the distribution rights, and the cross-licensed brands.
We will receive cash upon closing for the distribution assets and the cross-licensed brands, and as I already discussed on the slide before, we will receive an ongoing stream of quarterly payments from bottlers for the distribution rights with some upside opportunity in the way that's structured as we grow our businesses together.
So, that's really it. I talked about these at the beginning, I’ll go and sit with Irial now, but I hope what you see is a very clear and focused strategy on the Sparkling side to accelerate sales growth, to maintain and accelerate momentum on stills, to drive productivity and efficiency, and ultimately through the refranchising, get North America back to the streamline financial model that you would expect of the company here but this time having gone through this process with the best bottlers aligned and knitted together with an agreement, that's fit for purpose and competitive advantage and for growth going forward.
So, Dara?
Question-and-Answer Session
Q - Dara Mohsenian
Okay, thank you. So, why don't we start with your favorite slide from today, and the occasion-pack architecture? Clearly, pretty significant ramp-up in a lot of the higher price-per-ounce packages year-to-date, but it's been something the company's talked about for years. So, can you discuss why it's ramping up so much at this point? Is it a matter of focus, is it consumer acceptance, and help put in perspective how impactful the underlying impact will be from a profit standpoint for the company, maybe versus where you stood a couple years ago?
Sandy Douglas
Sure. I think the two big things that are new, one of which Muhtar talked about in the last earnings call, which is the company is implementing a global segmented revenue strategy that allows markets to pursue sales growth in the most efficient and effective way for that market.
So, India might be very volume-driven. The USA, for a part of its sort of legacy, commodity part of the business, is going to be very price-focused. But even within the United States, we have components where we'll be maniacally volume-focused but because they're premium packs that we're growing.
So, you get the power of rate and mix to drive sales, and you saw on this chart that at least as this year has progressed, we've started to hit our marks.
Now, the other things -- so that's the macro what's new, is the company, I think, has a really bold and better idea about growing sales. The other thing that's new here, is that the health and wellness trend has set up, almost teed up, a tremendous opportunity for the Coca-Cola Brand with our smaller packages. Consumers love it. Purchase intent for mini-cans versus 12-ounce cans, among moms, is up 25%. It takes away issues that moms have with our brand. Waste, too much, those are problems that people have.
And so, this fits trend as well as the math of the business, and so what's driving the success is the consumer. And we're simply working hard to give them it, and based on the size of this and the potential that we see, we believe that we have a long way to go with this strategy, much the way the Latin Americans have for well over a decade pursued a similar capability to grow their business in our company.
Dara Mohsenian
Okay. You didn’t spend much time talking about health and wellness concerns and pressure on the U.S. for volume perspective from those concerns. How much incremental pressure do you think you’ve seen from those areas? And how does that impact the potential ROI from higher marketing that you have put into place in the U.S. So you’re getting a stronger payback traditionally as you would in terms of the volume payback?
Sandy Douglas
My view is health and wellness is a important permanent trend. It’s not a short term plan. And the consumer is changing as a result. If you dropped a marble in the center of a super market and said to the marble, roll towards growth, it’s going to roll to the perimeter, it’s going to roll the fresh food. There is a globalization of food happening in the United States, and people are balancing calories with their choices of freshness.
Diet products are struggling across the store. Frozen foods are struggling. People are going to Fresh. For us, that actually favors Coca-Cola. It also suggests a new brand called Coke Life, which is we’re going to manage in a very segmented basis. This is Coca-Cola that’s sweetened with cane sugar and stevia, and has a third less calories. You’ll see it in stores now in glass bottles. Premium priced as close to the natural section as we can market it.
And that’s our move with the Coke trademark. And our belief is that that trend will continue and that we have to be in a competitively advantage place, a solution for consumers who want to make positive changes but also want to treat themselves to the best tasting drinks.
Dara Mohsenian
Okay. Can you compare the eventual level you think Coke Life can get to, versus something like Coke Zero or some of your other innovations? Help us conceptualize the opportunity, there?
Sandy Douglas
Yes, I really wouldn't want to forecast that, and I'll tell you why. It will get where the consumer wants to get it. We are -- we see Coke Life as a platform. It's not an end product. It has a formula today that tastes great, I recommend you all try it.
But it's going to continue to get an improving formula, probably less calories, better taste, we'll keep working on it until we think it's the perfect Coca-Cola for people who are looking for more natural ingredients and natural positioning.
In the end, if you gave me a choice, and it was just up to me -- and it's not -- the grasp that I've got back up here is that I'd like to see more of that, because Coca-Cola is by two times, the largest beverage in the United States. And it's starting to clip along at a mid-single-digits rate. That will make our business in North America strong for a long time.
And Coke Life, then, will serve the kind of natural segment and help us round the brand out for maximum horsepower.
Dara Mohsenian
Okay. And, volume in the U.S. is coming better than expected, I think relative to large price increases recently, one of the topline pickup is the more pricing, but clearly the demand elasticity has been lower than expected. Is that - do you think that’s a function of marketing starting to pay-off already in the U.S.?
Sandy Douglas
I think it’s probably five things to be completely honest. I think marketing starts to pay-off. The elasticity’s are materially better.
Secondly, the premium strongest brand does the best when the prices go up. Three, our packaging strategy is right. And so that’s changing the nature of the way that consumers bind the category.
Fourth, gas price is coming down. Is helping our category and probably several others, but it’s helping everybody in it. So the relative performance speaks of the more internal things that I just described. And then finally the weather has been better.
So I think we have to acknowledge all five of those potential drivers, but recognize that we’re trying to run a long term play and we see a long runway for it. I wouldn’t describe us as good by any stretch yet.
Dara Mohsenian
Okay, and you listed marketing first. Does that mean you think it's been the biggest factor in terms of recent volume?
Sandy Douglas
Yes, I mean, I'm going to -- you manage the things that you can control. I'm not going to spend two hours, or three hours or four hours a day on the Weather Channel, I'm going to spend it with brand people.
And that's where -- that's certainly what I think is driving the differential performance, but I don't -- I wouldn't be able to factually tell you this percent, this percent, this percent. The things we can control are marketing, packaging, and positioning, and we're obsessed with doing those well.
Dara Mohsenian
Okay. And refranchising detail was helpful, just a couple of detail questions. You’ve mentioned there is earnings dilution assumed in guidance for 2015 from the North American bottler refranchising, can you give me a sense of what level you’re assuming? And then, food service, warehouse business, Minute Maid, is that something you think will be owned by Coke longer term as part of the refranchising?
Sandy Douglas
The dilution question I would focus on the call with Kathy, as she’s going to put the pieces of the company together for everybody, and it makes more sense to do it in a holistic picture.
Minute Maid and Fountain are advantage businesses for us. Our juice business was double digit shares behind five, six years ago, it’s now way ahead. Simply has been a rock and roll story of taking a commodity category and premiumising it.
Our vision for the nutrition beverage business and the milk product that I showed you which is made on a sustainable dairy with fully sustainable high care processes with animals, has a proprietary milk filtering process that allows you to increase protein by 50%, take sugar down by 30%, and have no lactose, and a milk that’s premiumised and taste better and we’ll charge twice as much for it as the milk we used to buying in a jug.
And the test markets have been amazing, and we’ve created a joint venture with a bunch of dairy farmers who are innovative leaders in the dairy industry. So you put that next to Simply and you have a nutrition beverage company with tremendous growth potential.
Now to be clear, we’re going to be investing in the milk business for a while to build the brand so it won’t rain money in the early couple of years. But like Simply, when you do it well it rains money later. And we can deliver with our business portfolio before the milk comes on full profit line.
I went into that detail because the Minute Maid Company is one of our gems in the North America portfolio. And we share a bunch of it with bottlers today, and we’ll continue to do the right thing in the marketplace to have a healthy system and to grow that business.
Dara Mohsenian
Okay. Well we’re out of time, so thank you very much.
Sandy Douglas
Thank you. ||||| Coca-Cola is launching a new kind of premium milk nationwide in the US called Fairlife that will sell for twice the price of regular milk. To make sure the idea of this new type of milk was appealing, the company created an ad campaign.
Here's a look at what appears to be print and poster ads for Fairlife milk. The creative — launched by Fairlife itself, and not led by Coke — first appeared in Minnesota, where the drink launched in February.
Facebook/Fairlife
It kind of looks like the ladies might be having weird laxative issues. Perhaps they are lactose intolerant. In fact, Fairlife doesn't contain lactose, so maybe that's the message.
Some Twitter users are not convinced:
Back in February, Fairlife also launched a far less racy video to explain the product to Minnesotans. The video stars Sue McCloskey, a dairy farmer and one of the cofounders of Fairlife, part of the Select Milk Producers group that Coca-Cola formed a partnership with in 2012.
Coca-Cola's North American chief Sandy Douglas said at the Morgan Stanley Global Consumer Conference last week that the nationwide rollout of Fairlife was the beginning of a long-term investment in the dairy business for Coke.
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"We're going to be investing in the milk business for a while to build the brand, so it won't rain money in the early couple of years," Douglas said, according to a transcript of his remarks. "But like Simply [orange juice], when you do it well, it rains money later."
So perhaps we'll be seeing the leaky, milky pin-up girls again. ||||| Fairlife will cost twice as much as regular milk, contain 30% less sugar, and ‘make it rain money’ for the soft drinks firm
Coca-Cola is launching its own brand of milk, which it claims could become so popular that it will “rain money” for the company.
Fairlife, which will launch in the US next month, will cost twice as much as regular milk and will have 50% more protein and 30% less sugar.
Sandy Douglas, Coke’s global chief customer officer, said Fairlife was “a milk that’s premiumised and tastes better and we’ll charge twice as much for it as the milk we’re used to buying”.
He told a conference: “We’re going to be investing in the milk business for a while to build the brand, so it won’t rain money in the early couple of years. But like Simply [Coke’s premium fruit juice line], when you do it well, it rains money later.”
Douglas said Fairlife, a joint venture with US dairy farmers, used “a proprietary milk filtering process that allows you to increase protein by 50%, take sugar down by 30%, and have no lactose.”
He made the comments at a Morgan Stanley investment conference last week, but a transcript has only recently been released.
Milk sales in the US are down 8% over the past decade, and half of American adults do not drink milk, according to the trade journal Dairy Today .
A Fairlife spokeswoman said there were no plans to launch the product, which has already been branded “Milka-Cola” on Twitter, outside the US. Coke is still smarting from a failed attempt to sell bottled tap water in the UK under the brand Dasani in 2004. ||||| Now the company has got its commercial eyes on milk. But rather than just repackaging another part of our everyday diet, the firm boasts its drink will come souped up in a high-protein, high-calcium, low-sugar form – and sold at twice the price of a normal pint.
Fairlife will go on sale in the US next month and according to Coca-Cola, a major investor in the product, it will be more “nutritious” with 50 per cent more natural protein and calcium and less sugar than ordinary milk.
Heralded by breathless promotional materials that claim the new drink will take “milk where it’s never been before”, the drink is seen as the “premiumisation of milk” by the company.
Coca-Cola will be hopeful that Fairlife has a longer shelf life than it's failed bottled water, Dasani (Getty)
Speaking at Morgan Stanley’s Global Consumer Conference last week, Coca-Cola’s North American chief, Sandy Douglas, said: “It’s basically the premiumisation of milk… We’ll charge twice as much for it as the milk we’re used to buying in a jug.”
Mr Douglas claimed that the milk “tastes better” than regular milk and is made on sustainable dairy farms with “high-care processes” and a “proprietary milk-filtering process”.
Much of America’s milk is made in controversial mega-dairies where up to 30,000 cows are kept indoors all year round. But Mr Douglas said its milk will come from 92 family-owned farms, and Fairlife boasts that it will be “pursuing the highest standards of milk quality, agricultural sustainability and animal comfort”.
A Fairlife spokesman said: “In response to consumer demand for better, wholesome nutrition from safe, responsible sources, Fairlife, a joint venture between Coca-Cola and the Select Milk Producers dairy co-op, is excited to soon be introducing an innovative ultra-filtered milk that… offers consumers a dairy option that is sourced from sustainable family farms and provides strong market potential to redefine the category.”
The move is a major long-term investment for Coca-Cola, which has traditionally focused on carbonated drinks and owns nearly 1,000 drinks brands worldwide.
More recently it has branched out into still orange juice in America and low-sugar drinks elsewhere in the world.
Mr Douglas added: “We’re going to be investing in the milk business for a while to build the brand so it won’t rain money in the early couple of years. But like Simply [orange juice], when you do it well it rains money later.”
Not all Coca-Cola brand adventures have been profitable though. In 2004 the firm was forced to take its Dasani bottled water off British shelf after just four weeks.
The firm was unable to convince British consumers to buy the drink, which was reported to be Sidcup tap water that had been filtered and pumped full of minerals. It was found to contain illegal levels of the chemical bromate.
Soda stream: Failed drinks
Surge
The idea was to knock Mountain Dew off the top spot in the lucrative extreme sports drinks market, but Surge was discontinued in 2002 after six years on sale.
Sprite Remix
This clear drink emerged in 2003 and quickly developed a strong fan base. Drinkers soon got bored with its sickly taste though.
OK Soda
Coca-Cola killed off OK Soda within seven months, in 1993. Marketing focused on the caffeinated drink’s transparent appearance, ignoring its overly sweet taste.
Tab Clear
The soda did well enough to go global, but customers got bored and Coca-Cola pulled the drink by 1994. ||||| Facebook Twitter Pinterest fairlife purely nutritious milk(TM) has 50 percent more natural protein and calcium and 1/2 the sugars of ordinary milk.(PRNewsFoto/fairlife) Facebook Twitter Pinterest Not only is fairlife purely nutritious milk(TM) delicious and more nutritious milk than anything in the market, its breakthrough ad campaign shows how sexy vitality can be. (PRNewsFoto/fairlife) Facebook Twitter Pinterest With its launch in the Twin Cities, the game-changing milk and arresting ad campaigns will be popping up in other U.S. markets within the next few months. (PRNewsFoto/fairlife)
× fairlife purely nutritious milk(TM) has 50 percent more natural protein and calcium and 1/2 the sugars of ordinary milk.(PRNewsFoto/fairlife)
Not only is fairlife purely nutritious milk(TM) delicious and more nutritious milk than anything in the market, its breakthrough ad campaign shows how sexy vitality can be. (PRNewsFoto/fairlife)
With its launch in the Twin Cities, the game-changing milk and arresting ad campaigns will be popping up in other U.S. markets within the next few months. (PRNewsFoto/fairlife)
MINNEAPOLIS, Feb. 18, 2014 /PRNewswire/ -- In a racy series of ads featuring glamorous women in pin-up poses dressed only in milk, fairlife, LLC today introduced a high nutrition milk that will raise consumer interest for better tasting, more nutritious milk products. Launching in the Twin Cities, fairlife purely nutritious milk™ has 50 percent more natural protein and calcium and 1/2 the sugars of ordinary milk, all while being delicious real milk, with no protein powders.
"Consumers are looking for better quality, great tasting nutrition that comes from the highest quality milk," said Steve Jones, chief executive officer of fairlife, LLC. "With fairlife, we're bringing them a delicious and more nutritious milk than anything in the market with a breakthrough campaign that shows how sexy vitality can be. And since fairlife milk comes from family-owned farms committed to quality, sustainability and animal comfort, consumers can feel good about the source too. We call it our from grass to glass® promise."
Mike & Sue McCloskey, dairy farmers who co-founded fairlife, believed they could create new products to provide busy families like theirs with better nutrition from the wholesome goodness of real milk.
"Mike and I have been dedicated for years with ways to produce more nutritious milk," said Sue. "We believe today's active families want more protein and calcium without lactose. We literally designed fairlife at our kitchen table combining my interest in healthy wellness products and Mike's veterinary and scientific background. That's what's led to this amazing and great-tasting milk."
Pioneers of the cold-filtration process to concentrate milk's best nutrients, the McCloskeys are also revolutionizing the dairy industry with their cutting-edge practices in sustainable agriculture and cow care, owed not only to Mike's background as a veterinarian but also to their shared belief in responsible farming.
Revolutionizing Milk
Unlike anything the milk industry has ever seen, fairlife milk flows through soft filters to concentrate desired nutrients like protein and calcium, while separating out the fats and sugars from the milk. The brainchild of veterinarian turned dairy farmer Mike McCloskey, this now patented cold filtration delivers more of milk's best nutrients to people seeking great tasting natural nutrition in every delicious glass of fairlife purely nutritious milk™.
Better Milk From a Better Place
fairlife milk comes from a co-op of family farms united in pursuing the highest standards of milk quality, agricultural sustainability and animal care – so consumers can feel truly good about where their milk comes from.
Each cow at fairlife lives in clean, comfortable surroundings with soft sand beds in freestanding protected barns, allowing her to walk around freely while being shielded from wind, rain and snow. Passionate stewards of the environment, fairlife continues pioneering sustainability practices including converting cow manure to power the Fair Oaks, Ind., flagship farm and its fleet of 42 compressed natural gas milk trucks. This style of responsible family farming is a model for a growing population, using less water and land to produce more, higher quality milk.
From growing the crops that feed the cows, to milk production to its delivery, the company also controls the entire production process, evidence of the their complete commitment to 100 percent traceability for all of their milk.
Taking milk where it's never been before, the game-changing product and arresting ad campaign will launch in the Twin Cities in February. "Minnesotans are an incredibly active group who lead healthy lifestyles and care about nutrition. And they drink a lot of milk. With such a strong consumer-base and the distribution partnership of St Paul-based Kemps, one of the leaders in the dairy industry, we couldn't be happier to launch fairlife purely nutritious milk here. It's our learning lab for future expansion," Jones said.
For more information visit www.fairlife.com.
About fairlife
Headquartered in Chicago, fairlife, LLC is revolutionizing health and wellness by bringing their nutritious, high quality, great-tasting milk to a range of naturally advanced beverages for home, grab 'n go and fitness needs. fairlife was founded in 2012 by Select Milk Producers, a co-op of 92 family-owned dairies responsible for the high-quality milk that is key to fairlife products. fairlife purely nutritious milk™ joins sister brand Core Power, a great-tasting high protein drink created for fitness enthusiasts and on-the-go protein seekers. For more information, visit www.fairlife.com.
Related Link:
fairlife website
Photo: http://photos.prnewswire.com/prnh/20140217/MM65731-a
Photo: http://photos.prnewswire.com/prnh/20140217/MM65731-b
Photo: http://photos.prnewswire.com/prnh/20140217/MM65731-c
SOURCE fairlife
RELATED LINKS | With soda sales sagging, Coca-Cola is moving into the dairy business. It plans to offer milk with some big differences to the stuff now on supermarket shelves: For starters, it will cost twice as much. A Coke exec told a conference last week that the company's Fairlife will be "a milk that's premiumized and tastes better and we'll charge twice as much for it as the milk we're used to buying," the Guardian reports. Chief Customer Officer Sandy Douglas said the milk, which is being produced in venture involving 92 family-owned dairies and will launch next month, will contain 50% more protein and 30% less sugar than regular milk. A filtering process will also make it lactose-free. "We're going to be investing in the milk business for a while to build the brand so it won't rain money in the early couple of years," Douglas said. "But like Simply, when you do it well, it rains money later," he added, referring to the company's strong-selling juice brand. A Fairlife spokesman describes the product—which some have dubbed "Milka-Cola"—as "innovative ultra-filtered milk" that will offer consumers "a dairy option that is sourced from sustainable family farms," reports the Independent. Fairlife is already on sale in Minnesota, where its launch was accompanied by some eye-catching print ads that some found sexy and some found weird, Business Insider reports. (This fall, Coca-Cola pledged to help reduce the number of calories people are consuming through soda.) |
SAN FRANCISCO (MarketWatch) — With its market value still more than 30% below its peak, Apple Inc. has drawn the gaze of investor activist Carl Icahn, who announced a “large position” on the iPhone maker’s stock on Tuesday afternoon.
Bloomberg
The announcement — made through a pair of tweets — gave a notable boost to Apple’s (NASDAQ:AAPL) stock, which was up more than 4.7% to $489.57 by the closing bell. The shares were up about 1.8% prior to Icahn’s announcement.
“We currently have a large position in Apple. We believe the company to be extremely undervalued,” Icahn tweeted.
In another message, he said he had a “a nice conversation with [Apple CEO] Tim Cook today,” adding that they “discussed my opinion that a larger buyback should be done now.” Icahn added that “We plan to speak again shortly.”
Icahn has recently taken to announcing significant actions over Twitter, including moves related to his battle against a privatization deal at Dell Inc. (NASDAQ:DELL) . In related news, the National Investor Relations Institute is floating a proposal for rules that would require large investors to disclose their investment stakes more frequently.
Apple, which reported a total cash hoard of more than $146 billion by the end of June, has long been under pressure to return more cash to shareholders — especially over the last year, as its sales growth has slowed and earnings have begun to decline. That has contributed to a sharp decline in the company’s market value, as its stock peaked just above the $700 mark in late September and was on a mostly downward slope for the first half of this year.
The company began a $10 billion stock buyback last year and boosted that program to $60 billion on April 23. The company has not communicated plans to raise that level further.
“We appreciate the interest and investment of all our shareholders,” Apple spokesman Steve Dowling said in an email. “Tim had a very positive conversation with Mr. Icahn today.”
Apple’s shares have been on the rise of late, picking up nearly 18% since late July on rising anticipation of the next round of expected product launches this fall. The stock also rose above its 200-day moving average on Tuesday prior to Icahn’s announcement.
Click to Play Apple jumps on Icahn stake Activist investor Carl Icahn said on Twitter that he has taken a "large" position in Apple and urged its CEO to step up stock buybacks. David Benoit reports. Photo: AP.
Over the weekend, the AllThingsD technology blog reported that the company would unveil its next iPhone at a Sept. 10 media event. The Wall Street Journal reported Monday that Apple is building its next large iPad with the same thin, lightweight it used on the iPad mini. Analysts widely expect the new iPads to be unveiled in October.
This is not the first time Apple has come in the sights of activist investors. Earlier this year, the company found itself enmeshed in a battle with David Einhorn of Greenlight Capital, who was pressing for a new class of preferred stock as a way for Apple to return more of its large cash horde to shareholders.
For more: Apple-heavy ETF primed for breakout.
U.S. stocks rise with help from Apple. ||||| Activist investor Carl Icahn said on Twitter that he has taken a "large" position in Apple and urged its CEO to step up stock buybacks. David Benoit reports. Photo: AP.
Investor Carl Icahn has grabbed a stake valued at over $1.5 billion in Apple Inc., believing that more cash should be falling from the tech giant's branches.
Specifically, Mr. Icahn is pressing the company to buy back shares now.
While Apple earlier this year announced a large buyback, Mr. Icahn said in an interview Tuesday that he wants to see it happen right away, near the current share price, which he considers cheap.
"This is a no-brainer to go buy stock in a company that can go borrow" at a low rate, Mr. Icahn said in an interview. "Buy the company here and even without earnings growth, we think it ought to be worth $625," he said, referring to the stock price, which closed Tuesday at $489.57, having risen 5% on the news of Mr. Icahn's investment.
Mr. Icahn's thesis rests on Apple borrowing at about a 3% interest rate and buying back shares right now, likely at around $525 a piece. A stock buyback can increase earnings per share by reducing the number of shares outstanding.
Using Twitter on Tuesday to publicize his move, Mr. Icahn—who is known for buying large positions in various companies and then agitating for change—said he had a "nice" conversation with Tim Cook, Apple's chief executive, and discussed his opinion that "a larger share buyback should be done now." He added that he plans to speak with Mr. Cook again "shortly."
The tweets didn't disclose the size of the stake but a person familiar with the position said Mr. Icahn's stake is worth more than $1.5 billion.
Wielding influence at Apple won't be easy, or inexpensive, given a stock market value that currently stands at close to $450 billion. At that capitalization, Mr. Icahn's stake would be less than 1%.
Steve Dowling, an Apple spokesman, said the company appreciates the interest and investment of all its shareholders. "Tim had a very positive conversation with Mr. Icahn today," he said, without elaborating.
The investment is the second time in recent months an activist investor has targeted Apple, adding to the pressures on a company whose shares have dropped sharply since reaching all-time highs above $700 a share in September.
Earlier this year, David Einhorn, founder of Greenlight Capital Inc., pushed Apple to return more money to shareholders through a preferred stock plan. In a series of statements, Mr. Einhorn criticized Apple for being stingy with its large and growing cash reserves.
Apple said it believed it was taking the most prudent course, and in April increased its buyback authorization to $60 billion from the $10 billion announced last year. The company said the move marks the largest single share repurchase authorization of any company in history and it is expected to finish by the end of calendar 2015.
In July, Apple said it had already spent $16 billion to repurchase shares in its third quarter ended in June.
Mr. Icahn's use of his Twitter account for the news was an unusual move in itself, marking one of the first times such a position has been initially disclosed through the medium.
Mr. Icahn has lately been engaged in a battle over the future of Dell Inc., whose CEO and founder is trying to take the company private. Mr. Icahn holds a stake of nearly 9% in the computer maker.
In the interview Tuesday, Mr. Icahn, who plays chess on his iPad, said he made the Apple investment on the advice of his son Brett Icahn and investment partner David Schechter, who have been looking at the technology sector for Icahn Enterprises LP.
Those two also led Mr. Icahn's successful investment in video provider Netflix Inc. where they have made $1 billion in less than a year. They pitched Mr. Icahn on Apple's solid cash position and its ability to borrow with ease to fund a massive stock buyback, Mr. Icahn said.
They also are bullish on Apple's ability to increase earnings, and expressed enthusiasm over the possibility that Apple's coming products, such as the widely anticipated watch and television, will drive sales.
Analysts have expressed concerns about a slowing pace of innovation at Apple, arguing that it hasn't launched a brand new product line since it released the first iPad in 2010. Other missteps for the Cupertino, Calif., trendsetter include a widely panned new mapping service for its iPhones and iPads.
On the financial front, the company has been under heavy scrutiny by various investors complaining about the size of its cash stockpile, which was recently reported as $146.6 billion. In March last year, Apple agreed, saying it had more cash than it needed to run its business, and began a dividend and share buyback program.
Mr. Icahn's move into Apple is the latest example of activist investors pursuing big game, in this case the largest company in the Standard & Poor's 500-stock index. For executives and boards of companies large and small, anticipating, managing and responding to activist shareholders has emerged as a significant and ongoing task, not to mention a source of revenue for advisers on Wall Street who help companies with the challenge.
What is unclear is what comes next. Mr. Icahn's typical investment methods are to buy a large chunk of a company stock and agitate for changes to the company's management, how they use cash or other strategies he believes will boost stock prices.
Mr. Icahn also is known for picking fights with executives and directors of companies he believes aren't acting in the interests of shareholders, including management at technology companies such as Netflix and Yahoo Inc. So far, both Mr. Icahn and Apple said the talks were amicable.
In his battle involving Dell, Mr. Icahn argues that CEO Michael Dell's plan for a buyout amounts to theft from shareholders.
In his bid to derail the proposed $24.8 billion deal, Mr. Icahn has said repeatedly in interviews that he wants to fire Mr. Dell as CEO. He added in a public letter that Mr. Dell has been "whining" about the terms of the buyout deal.
Last month, the Dell special committee reviewing the transaction said it had "reservations" about Mr. Icahn's methods of valuing Dell's stock, and directors have criticized him for abandoning repeated proposed deals involving the company.
Gene Munster, an analyst at Piper Jaffray, said Mr. Icahn's investment serves as an acknowledgment that better things could be coming from Apple over the next six months, which should help raise the company's stock. But he doesn't expect Mr. Icahn's influence to have much impact beyond the way Apple allocates its capital.
Share buybacks have enjoyed newfound popularity in the last couple of years, after companies that hoarded cash in the wake of the financial crisis have looked for ways to put it to work.
The outcome of a buyback can depend on a number of factors, including whether the company takes the stock out of circulation or gives it to executives, who might later sell it. Some investors view buybacks as a sign of strength, indicating that a company believes its shares are undervalued; others view it as an admission that the company is short on ideas for ways to invest its excess cash.
—Shira Ovide contributed
to this article.
Write to Ian Sherr at [email protected] and David Benoit at [email protected]
A version of this article appeared August 13, 2013, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Icahn Pushes Apple on Buyback. ||||| Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference at the New York Stock Exchange in this June 27, 2007 file photograph.
SAN FRANCISCO/NEW YORK |
SAN FRANCISCO/NEW YORK (Reuters) - Activist investor Carl Icahn said he has amassed a "large position" in Apple Inc and believes the stock could be worth as much as $700 a share if Chief Executive Tim Cook pushed for a larger stock buyback.
The surprise revelation from the billionaire activist caused a stir on Wall Street and pushed Apple's stock almost 5 percent higher to close at a 7-month high of $489.57 on the Nasdaq on Tuesday.
Icahn said on Twitter that he had a "nice conversation" with Cook on Tuesday and they planned to speak again soon. Apple confirmed the conversation took place, but did not say if it influenced management's view of buybacks.
Icahn told Reuters that the iPhone, iPad and Mac computer maker has the ability to do a $150 billion buyback now by borrowing funds at 3 percent.
"If Apple does this now and earnings increase at only 10 percent, the stock - even keeping the same multiple currently - should trade at $700 a share," Icahn said in a phone interview. Apple has "huge borrowing power, little relative debt and trades at a low multiple."
Icahn, who this year launched an assault on Michael Dell's $25 billion effort to take Dell Inc private, did not say how many shares of Apple he holds.
A source familiar with the matter, who declined to be named because Icahn hasn't disclosed his holdings in Apple, said the investor's stake was worth around $1 billion, a fraction of the company's market value of more than $400 billion.
U.S. rules require investors to disclose stakes of 5 percent or larger within 10 days of hitting that threshold.
In April, Apple bowed to Wall Street pressure and said it would return $100 billion to shareholders by the end of 2015 - double the amount set aside previously. It got there in part by raising its dividend 15 percent and boosting its share buyback program six-fold to $60 billion, one of the largest of its kind.
The news gave Apple shares a lift, but they remain down more than 30 percent since hitting a record high of $702.10 in September 2012, pummeled by fears of slowing growth and thinning margins amid competition from Samsung Electronics.
"We currently have a large position in Apple. We believe the company to be extremely undervalued," Icahn said in one of two tweets about Apple on Tuesday.
"Had a nice conversation with Tim Cook today. Discussed my opinion that a larger buyback should be done now. We plan to speak again shortly," he said in his second tweet.
Icahn is the second prominent activist to target Apple this year. The company had averted a dispute with hedge fund manager David Einhorn of Greenlight Capital, who sued Apple to try to block a proposal regarding voting on preferred shares.
Apple eventually withdrew the proposal. Einhorn's $8 billion hedge fund is a major shareholder and owned about 2.4 million shares of the company as of the end of the first quarter.
"We appreciate the interest and investment of all our shareholders," Apple said in a statement on Tuesday in response to Icahn's tweets. "Tim had a very positive conversation with Mr. Icahn today."
STILL EDGY ENOUGH?
Analysts said Icahn's interest in Apple helped cement improving sentiment on the stock, as investors began to anticipate a new line-up of gadgets in the fall, including possibly a cheaper iPhone that can spearheard a deeper drive into fast-growing emerging markets.
Speculation has persisted also that the company may be planning some sort of TV or smartwatch product - worn on the user's wrist - in the near future.
Cook said last month there will be products "in new categories" but gave no details.
Apple bought about more than $16 billion worth of stock in the June quarter, much more than analysts had expected.
"It's a heavyweight investor who can maybe accelerate the (buyback) program," said Morningstar analyst Brian Collelo. "It helps the positive momentum that Apple has seen."
Others say they saw little need for Apple to expand or speed up its buyback program. Much of the company's $147 billion in cash is held overseas, and that cash cannot be accessed without incurring taxes. As an alternative, Apple raised debt to bankroll its buyback program.
"It was already greatly increased and there was a debt offering to facilitate that," Hudson Square Research analyst Daniel Ernst said. "I can't say that I agree that the pace of the buyback is tepid."
Investors' biggest long-term concern about Apple is whether the company has lost its innovative edge. "Product innovation and profitability" are now top priorities, Ernst said.
Apple's profit fell 22 percent in the June quarter as gross margins slid below 37 percent from over 42 percent a year earlier.
On Tuesday, about 31 million Apple shares changed hands, almost three times the recent daily average. The stock is now up nearly $20 from its 200-day moving average of around $470.
Options volume was running three times the average daily turnover with 764,000 calls and 344,000 puts changing hands, according to options analytics firm Trade Alert.
Apple's options volume also accounted for 11.6 percent of the total single-stock options volume for the day, data from Trade Alert showed.
(Additional reporting by Doris Frankel in Chicago, and Angela Moon and Sam Forgione in New York; Editing by Matthew Lewis, Tiffany Wu and Richard Chang) | "We currently have a large position in APPLE," activist investor Carl Icahn tweeted yesterday. "We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come." That was enough to send Apple stocks soaring up 5%, closing yesterday at $489.57. But Icahn tells the Wall Street Journal that he thinks they should be worth more, and with his "large position"—a sources says it's $1.5 billion worth, though that's probably less than 1%—he's putting the hard word on the tech giant to start buying back shares with its reported $146.6 billion cash stash. Icahn reckons the company could do a $150 billion buyback now, borrowing at 3%. "If Apple does this now and earnings increase at only 10%, the stock—even keeping the same multiple currently—should trade at $700 a share," he says, per Reuters. Apple confirmed the meeting with CEO Cook, but not whether it would be taking Icahn's advice. As MarketWatch notes, even without the help of Icahn's Twitter feed, the company's stocks have been doing well of late, thanks to an upcoming round of product launches: the new iPhone will be unveiled September 10, and a new thinner, lighter iPad is expected in October. |
Recent advances in aircraft technology, including advanced collision avoidance and flight management systems, and new automated tools for air traffic controllers enable a shift from air traffic control to collaborative air traffic management. Free flight, a key component of air traffic management, will provide pilots with more flexibility, under certain conditions, to fly more direct routes from city to city. Currently, pilots primarily fly fixed routes—the aerial equivalent of the interstate highway system—that often are less direct because pilots are dependent on ground- based navigational aids. Through free flight, FAA hopes to increase the capacity, efficiency, and safety of our nation's airspace system to meet the growing demand for air transportation as well as enhance the controllers’ productivity. The aviation industry, especially the airlines, is seeking to shorten flight times and reduce fuel consumption. According to FAA’s preliminary estimates, the benefits to the flying public and the aviation industry could reach into the billions of dollars when the program is fully operational. In 1998, FAA and the aviation community agreed to a phased approach for implementing the free flight program, established a schedule for phase 1, and created a special program office to manage this phase. During phase 1, which FAA plans to complete by the end of calendar year 2002, the agency has been deploying five new technologies to a limited number of locations and measuring their benefits. Figure 1 shows how these five technologies—Surface Movement Advisor (SMA), User Request Evaluation Tool (URET), Traffic Management Advisor (TMA), Collaborative Decision Making (CDM), and passive Final Approach Spacing Tool (pFAST)—operate to help manage air traffic. According to FAA, SMA and CDM have been deployed at all phase 1 sites on or ahead of schedule. Table 1 shows FAA’s actual and planned deployment dates for URET, TMA, and pFAST. To measure whether the free flight tools will increase system capacity and efficiency, in phase 1, FAA has been collecting data for the year prior to deployment and initially planned to collect this information for the year after deployment before making a decision about moving forward. In December 1999, at the urging of the aviation community, FAA accelerated its funding request to enable it to complete the next phase of the free flight program by 2005—2 years ahead of schedule. During this second phase, FAA plans to deploy some of the tools at additional locations and colocate some of them at selected facilities. FAA also plans to conduct research on enhancements to these tools and incorporate them when they are sufficiently mature. FAA plans to make an investment decision in March 2002 about whether to proceed to phase 2. However, by that date, the last site for URET will have been operational for only 1 month, thus not allowing the agency to collect data for 1 year after deployment for that site before deciding to move forward. (See table 1.) FAA officials told us that because the preliminary data showed that the benefits were occurring more rapidly than anticipated, they believe it is unnecessary to wait for the results from the evaluation plan to make a decision about moving forward. To help airports achieve their maximum capacity for arrivals through free flight, FAA’s controllers will undergo a major cultural change in how they will manage the flow of air traffic over a fixed point (known as metering). Under the commonly used method, controllers use “distance” to meter aircraft. With the introduction of TMA, controllers will have to adapt to using “time” to meter aircraft. The major technical challenge with deploying the free flight tools is making URET work with FAA’s other air traffic control systems. While FAA does not think this challenge is insurmountable, we believe it is important for FAA to resolve this issue to fully realize URET's benefit of increasing controller productivity. Initially, controllers had expressed concern about how often they could rely on TMA to provide the data needed to effectively manage the flow of traffic. However, according to FAA and subsequent conversations with controllers, this problem was corrected in May 2001 when the agency upgraded TMA software and deployed the new version to all sites. To FAA’s credit, it has decided not to deploy pFAST to additional facilities in phase 2 because of technical difficulties associated with customizing the tool to meet the specific needs of each facility, designing other automated systems that are needed to make it work, and affordability considerations. Ensuring that URET is compatible with other major air traffic control systems is a crucial technical challenge because this requires FAA to integrate software changes among multiple systems. Among these systems are FAA’s HOST, Display System Replacement, and local communications networks. Compounding this challenge, FAA has been simultaneously upgrading these systems’ software to increase their capabilities. How well URET will work with these systems is unknown because FAA has yet to test this tool with them. FAA has developed the software needed for integration and has begun preliminary testing. Although problems have been uncovered during testing, FAA has indicated that these problems should not preclude URET’s continued deployment. By the end of August 2001, FAA expects to complete testing of URET’s initial software in conjunction with the agency’s other major air traffic control systems. FAA acknowledges that further testing might uncover the need for additional software modifications, which could increase costs above FAA’s current estimate for this tool’s software development and could cause the agency to defer capabilities planned for phase 1. Ensuring URET’s compatibility with other air traffic control systems is important to fully realize its benefits of increasing controllers’ productivity. URET is used in facilities that control air traffic at high altitudes and will help associate and lead controllers work together to safely separate aircraft. Traditionally, an associate controller has used the data on aircraft positions provided by the HOST computer and displayed on the Display System Replacement workstation to assess whether a potential conflict between aircraft exists. If so, an associate controller would annotate the paper flight strips containing information on their flights and forward these paper flight strips to the lead controller who would use the Display System Replacement workstation to enter flight plan amendments into the HOST. URET users we spoke with said that this traditional approach is a labor-intensive process, requiring over 30 keystrokes. With URET, an associate controller can rely on this tool to automatically search for potential conflicts between aircraft, which are then displayed. URET also helps an associate controller resolve a potential conflict by automatically calculating the implications of any change prior to amending the flight plan directly into the HOST. According to the users we spoke with, these amendments require only three keystrokes with URET. FAA, controllers, maintenance technicians, the aviation community, and other stakeholders agree on the importance of using a phased approach to implementing the free flight program. This approach allows FAA the opportunity to gradually deploy the new technologies at selected facilities and users to gain operational experience before total commitment to the free flight tools. It basically follows the “build a little, test a little, field a little” approach that we have endorsed on numerous occasions. To FAA’s credit, the agency has appropriately used this approach to determine that it will not deploy pFAST in phase 2. We also agree with major stakeholders that adapting to the program’s tools poses the greatest operational challenge because they will change the roles and responsibilities of the controllers and others involved in air traffic services. However, the success of free flight will rely on agencywide cultural changes, especially with controllers, who trust their own judgment more than some of FAA’s new technologies, particularly because the agency’s prior efforts to deploy them have had significant problems.Without training in these new tools, air traffic controllers would be hampered in fulfilling their new roles and responsibilities. Another major challenge is effectively communicating TMA’s capabilities to users. Because FAA has been deferring and changing capabilities, it has been difficult for controllers to know what to expect and when from this tool and for FAA to ensure that it provides all the capabilities that had been agreed when FAA approved the investment for phase 1. During our meetings with air traffic controllers and supervisors, their biggest concern was that the free flight tools would require cultural changes in the way they carry out their responsibilities. By increasing their dependence on automation for their decisionmaking, these tools are expected to help increase controllers’ productivity. Moreover, the tools will require changes in commonly recognized and accepted methods for managing traffic. Controllers and supervisors emphasized that URET will increase the responsibilities of the associate controllers in two important ways. First, their role would no longer be focused primarily on separating traffic by reading information on aircraft routes and altitudes from paper flight strips, calculating potential conflicts, and manually reconfiguring the strips in a tray to convey this information to a lead controller. With the URET software that automatically identifies potential conflicts up to 20 minutes in advance, associate controllers can be more productive because they will no longer have to perform these manual tasks. Second, they can assume a more strategic outlook by becoming more focused on improving the use of the airspace. URET enables them to be more responsive to a pilot’s request to amend a flight plan (such as to take advantage of favorable winds) because automation enables them to more quickly check for potential conflicts before granting a request. Although the controllers said they look forward to assuming this greater role and believe that URET will improve the operational efficiency of our nation’s airspace, they have some reservations. Achieving this operational efficiency comes with its own set of cultural and operational challenges. Culturally, controllers will have to reduce their dependency on paper flight strips as URET presents data electronically on a computer screen. According to the controllers we interviewed, this change will be very challenging, especially at facilities that handle large volumes of traffic, such as Chicago, because the two facilities that have received URET have taken several years to become proficient with it even though they have less traffic. Operationally, controllers said that URET’s design must include some backup capability because they foresee the tool becoming a critical component in future operations. Moreover, as controllers become increasingly experienced and reliant on URET, they will be reluctant to return to the former manual way because those skills will have become less current. As new controllers join the workforce, an automated backup capability will become increasingly essential because they will not be familiar with controlling traffic manually with paper flight strips. Currently, FAA is not committed to providing a backup to URET in either phase because the tool is only a support tool, not a mission-critical tool that requires backup. However, the agency is taking preliminary steps to provide some additional space for new equipment in the event it decides to provide this backup. Depending on how the agency plans to address this issue, the cost increase will vary. For TMA, controllers emphasized during our discussions that using time rather than distance to meter properly separated aircraft represents a major cultural shift. While controllers can visually measure distance, they cannot do the same with time. As one controller in a discussion group commented, TMA “is going to be a strain, … and I hate to use the word sell, but it will be a sell for the workforce to get this on the floor and turn it on and use it.” Currently, controllers at most en route facilities use distance to meter aircraft as they begin their descent into an airport’s terminal airspace. This method, which relies on the controllers’ judgment, results in the less efficient use of this airspace because controllers often add distance between planes to increase the margin of safety. With TMA, controllers will rely on the computer’s software to assign a certain time for aircraft to arrive at a predetermined point. Through continuous automatic updating of its calculations, TMA helps balance the flow of arriving flights into the congested terminal airspace by rapidly responding to changing conditions. The controllers at the first three of the en route centers that have transitioned to TMA easily accepted it because they had been using time to meter air traffic for 20 years. However, as other en route centers transition to TMA, the controllers’ receptivity will be difficult because they have traditionally used distance to meter air traffic. FAA management realizes that the controllers’ transition to metering based on time versus distance will be challenging and has allowed at least 1 full year for them to become proficient in using the tool and begin to reap its full benefits. As a result, the Free Flight Program Office has established a 1-year period for controllers to become trained and comfortable with using this tool. FAA is relying heavily on national user teams to help develop training for TMA and URET. However, because of a lack of training development expertise and other factors, their efforts to provide adequate training for TMA have been hampered. Controllers said that, while they have knowledge of TMA, they are not specialists in developing training and therefore need more assistance from the program office. Also, because only a few key controllers have experience in using TMA, the teams have had to rely on them to develop a standardized training program while working with local facilities to tailor it to their needs. Moreover, these controllers are being asked to troubleshoot technical problems. Finally, controllers said the computer-based training they have received to date has not been effective because it does not realistically simulate operational conditions. FAA is currently revising its computer-based training to provide more realistic simulations. Because using the free flight tools will require controllers to undergo a complex and time-consuming cultural change, developing a comprehensive training program would greatly help FAA’s efforts to implement the new free flight technologies. Communicating to users how the new tools will benefit the organization and them will greatly enhance the agency’s training strategy. While FAA’s training plans for URET are preliminary because it is undergoing testing and is not scheduled for deployment until the latter part of 2001, we believe that providing adequate training in advance is essential for controllers to become proficient in using this tool. Our discussions with controllers and FAA’s TMA contractor indicated that in order to address local needs and to fix technical problems with TMA, FAA deferred several aspects of the tool that had been established for earlier deployment in phase 1. FAA officials maintain that these capabilities will be deployed before the end of phase 1. However, if these capabilities are not implemented in phase 1, pushing them into phase 2 will likely increase costs and defer benefits. For example, TMA’s full capability to process data from adjacent en route centers has been changed because FAA determined that providing the full capability was not cost effective. While controllers said that even without this full capability, TMA has provided some benefits, they said that deferring some aspects of the tool’s capabilities has made it less useful than they expected. Moreover, controllers maintain that FAA has not clearly communicated the changes with the tool’s capabilities to them. Without knowing how the tool’s capabilities are being changed and when the changes will be incorporated, it is difficult for users to know what to expect and when and for FAA to evaluate the tool’s cost, schedule, and ability to provide expected benefits. FAA has begun to measure capacity and efficiency gains from using the free flight tools and its preliminary data show that the tools provide benefits. FAA expects additional sites to show similar or greater benefits, thus providing data to support a decision to move to phase 2 by March 2002. Because the future demand for air traffic services is expected to outpace the tools’ capacity increases, the collective length of delays during peak periods will continue to increase but not to the extent that they would have without them. When FAA, in collaboration with the aviation industry, instituted the phased approach to implement its free flight program in 1998, the agency established a qualitative goal for increasing capacity and efficiency. In May 2001, FAA announced quantifiable goals for each of the three tools. For URET, FAA established an efficiency goal to increase direct routings by 15 percent within the first year of being fully implemented. Achieving this goal translates into reduced flight times and fuel costs for the airlines. The capacity goals for TMA and pFAST are dependent upon whether they are used together (colocated) and whether any constraints at an airport prevent them from being used to their full potential to expand capacity. If they are used together (such as at Minneapolis), FAA expects capacity to increase by 3 percent in the first year of operations and by 5 percent in the following year. However, at Atlanta, which is constrained by a lack of runways, the goal is 3 percent when these tools are used together. If only one of these tools is deployed (such as at Miami), FAA expects a 3-percent increase in capacity. While FAA has established quantifiable goals for these tools, the agency has only recently begun to develop information to determine whether attaining its goals will result in a positive return on the investment. Making this determination is important to help ensure that the capacity and efficiency gains provided by these tools are worth the investment. As previously shown in table 1, the actual systems that will be deployed for TMA and pFAST have only recently been installed at several locations or are scheduled to be installed this winter. To date, prototypes of these tools have been colocated at one location, and the actual equipment has been colocated at three locations. TMA is in a stand-alone mode at two locations. FAA reported that TMA achieved its first-year goal of a 3- percent increase in capacity at Minneapolis, and the agency is collecting data to determine whether the tool is meeting its goals at the other locations. Most of FAA’s data regarding the benefits provided by these tools are based on operations of their prototypes at Dallas-Fort Worth. These data show that TMA and pFAST achieved the 5-percent colocation goal. However, the data might not be indicative of the performance of the actual tools that will be deployed to other locations because Dallas-Fort Worth does not face the constraints affecting many other airports (such as a lack of runways). Because FAA does not plan to begin deploying the actual model of URET until November 2001, the agency’s data on its benefits have been based only on a prototype. At the two facilities—Indianapolis and Memphis— where the prototype has been deployed since 1997, FAA reported that URET has increased the number of direct routings by over 17 percent as of April 2001. According to FAA’s data, all flights through these two facilities were shortened by an average of one-half mile, which collectively saved the airlines approximately $1.5 million per month in operating costs. However, the benefits that FAA has documented for using URET reflect savings for just a segment of a flight—when an airplane is cruising through high-altitude airspace—not the entire flight from departure to arrival. Maintaining URET’s benefits for an entire flight is partly dependent on using it in conjunction with TMA and pFAST. Although a researcher at the Massachusetts Institute of Technology, who is reviewing aspects of FAA’s free flight program, recognizes URET’s potential benefits, the researcher expressed concerns that its benefits could be lessened in the airspace around airports whose capacity is already constrained. Likewise, in a study on free flight supported by the National Academy of Sciences and the Department of Transportation, the authors found that the savings attributed to using direct routings might “be lost as a large stack of rapidly arriving aircraft must now wait” in the terminal airspace at constrained airports. Although URET can get an airplane closer to its final destination faster, airport congestion will delay its landing. While TMA and pFAST are designed to help an airport handle arrivals more efficiently and effectively, they cannot increase the capacity of an airport’s terminal airspace beyond the physical limitations imposed by such constraining factors as insufficient runways or gates. In contrast, FAA’s Free Flight Program Office believes that the savings observed with the prototype of URET will accrue when the actual tool is used in conjunction with TMA and pFAST. FAA plans to have procedures in place by the time these three tools are used together so that URET’s benefits will not be reduced. However, the colocation of these three tools is not expected to occur until February 2002, which is only 1 month before the agency plans to make an investment decision for phase 2. Thus, we believe that FAA will not have enough time to know whether URET’s benefits would be reduced. During peak periods, the demand for air traffic currently exceeds capacity at some airports, causing delays. FAA expects this demand to grow, meaning that more aircraft will be delayed for longer periods. Free flight tools have the potential to allow the air traffic system to handle more aircraft (increase capacity) but not to keep up with the projected growth in demand. Thus, they can only slow the growth of future delays. They cannot fully eliminate future delays or reduce current delays unless demand remains constant or declines. FAA’s model of aircraft arrivals at a hypothetical congested airport, depicted in figure 2, illustrates the projected impact of the tools. According to the model, if demand increases and the tools are not deployed (capacity remains constant); the collective delays for all arriving flights (not each one) will increase by about an hour during peak periods. But if demand increases exceed capacity increases from deploying the tools, these delays will only increase by about half an hour. While recognizing that the free flight tools will provide other benefits, FAA has not quantified them. According to FAA, although TMA and pFAST are designed to maximize an airport’s arrival rates, they also can increase departure rates because of their ability to optimize the use of the airspace and infrastructure around an airport. Regarding URET, FAA maintains that by automating some of the functions that controllers had performed manually, such as manipulating paper flight strips, the tool allows controllers to be more productive. If FAA’s data continue to show positive benefits, the agency should be in a position by March 2002 to make a decision to deploy TMA to additional sites. However, FAA might not be in a position to make an informed decision on URET because the schedule might not allow time to collect sufficient data to fully analyze the expected benefits from this tool during phase 1. Currently, operational issues present the greatest challenge because using the free flight tools will entail a major cultural shift for controllers as their roles and responsibilities and methods for managing air traffic will change. While FAA management has recognized the cultural changes involved, they have not taken a leadership role in responding to the magnitude of the changes. In particular, while involving controllers in developing and delivering training on these new tools, FAA has not provided support to ensure that the training can be effectively developed and presented at local sites. Because the agency has been changing the capabilities of TMA from what had been originally planned but not systematically documenting and communicating these changes, FAA and the users of this tool lack a common framework for understanding what is to be accomplished and whether the agency has met its goals. While the free flight tools have demonstrated their potential to increase capacity and save the airlines money, only recently has FAA established quantifiable goals for each tool and begun to determine whether its goals are reasonable—that they will result in a positive return on investment. Because several factors influence the benefits expected from the tools, it is important for FAA to clearly articulate the expectations for each tool by specific location. To make the most informed decision about moving to phase 2 of the free flight program, we recommend that the Secretary of Transportation direct the FAA Administrator to take the following actions: Collect and analyze sufficient data in phase 1 to ensure that URET can effectively work with other air traffic control systems. Improve the development and the provision of local training to enable field personnel to become proficient with the free flight tools. Determine that the goals established in phase 1 result in a positive return on investment and collect data to verify that the goals are being met at each location. Establish a detailed set of capabilities for each tool at each location for phase 2 and establish a process to systematically document and communicate changes to them in terms of cost, schedule, and expected benefits. We provided a draft of this report to the Department of Transportation and the National Aeronautics and Space Administration for their review and comment. We met with officials from the Office of the Secretary and FAA, including the Director and Deputy Director Free Flight Program Office, to obtain their comments on the draft report. These officials generally concurred with the recommendations in the draft report. They stated that, to date, FAA has completed deployment of the Surface Movement Advisor and the Collaborative Decision Making tools on, or ahead of, schedule at all phase 1 locations and plans to complete the deployment of the remaining free flight tools on schedule. FAA officials also stated that the agency is confident that it will be in position to make an informed decision, as scheduled in March 2002, about moving to the program’s next phase, which includes the geographic expansion of TMA and URET. Furthermore, FAA stated that the free flight tools have already demonstrated positive benefits in an operational environment and that it expects these benefits will continue to be consistent with the program’s goals as the tools are installed at additional sites. In addition, FAA officials provided technical clarifications, which we have incorporated in this report, as appropriate. We acknowledge that FAA has deployed the Surface Movement Advisor and the Collaborative Decision Making tools on schedule at various locations. Furthermore, the report acknowledges that the free flight tools have demonstrated benefits and that the agency should have the data on TMA to make a decision about moving forward to phase 2 by March 2002. However, as we note in the report, FAA faces a significant technical challenge in ensuring that URET works with other air traffic control systems. Moreover, the data on URET's benefits reflect those of the prototype system. FAA is scheduled to deploy the first actual system in November 2001 and the last in February 2002—just 1 month before it plans to make an investment decision. With this schedule, the actual system might not be operational long enough to gather sufficient data to measure its benefits. Furthermore, FAA has yet to overcome the operational challenge that is posed when controllers use TMA and must shift from the traditional distance-based method of metering air traffic to one based on time. If FAA can not satisfactorily resolve these issues, the free flight program might not continue to show positive benefits and could experience cost overruns, delays, and performance shortfalls. The National Aeronautics and Space Administration expressed two major concerns. First, it felt that the benefits provided from the TMA tool justified its further deployment. Our initial conclusion in the draft report, that FAA lacked sufficient data to support deploying this tool to additional sites, was based on FAA’s initial evaluation plan, which required at least 1 year of operational data after each tool had been deployed. FAA officials now believe that waiting for full results from the evaluation plan before making a decision to move forward is no longer necessary because TMA's performance results are occurring more rapidly than anticipated. This report now acknowledges that the agency should have the data it needs to make a decision to move forward with this tool. Second, NASA felt that the report was unclear regarding the nature of our concerns about the reliability of TMA's data. The discussion in the draft report indicated that FAA lacked sufficient data to show that it had addressed our concerns with TMA. FAA officials provided this support, and this report has been revised accordingly. In addition, National Aeronautics and Space Administration officials provided technical clarifications, which we have incorporated into this report, as appropriate. (See appendix II for the National Aeronautics and Space Administration's comments.) As agreed with your offices, unless you publicly release its contents earlier, we plan no further distribution of this report until 30 days after the date of this letter. At that time, we will send copies of this report to interested Members of Congress; the Secretary of Transportation; the Administrator, Federal Aviation Administration; and the Administrator, National Aeronautics and Space Administration. We will also make copies available to others upon request. If you have questions about this report, please contact me at (202) 512- 3650. Key contributors are listed in appendix III. Because of the importance of the free flight program to the future operation of our nation’s aviation system and the upcoming decision about whether to proceed to the next phase, the Chairmen of the Senate Committee on Commerce, Science, and Transportation and the Subcommittee on Aviation asked us to provide information to help them determine whether the Federal Aviation Administration (FAA) will be in a position to decide on moving to the next phase. This report discusses (1) the significant technical and operational issues that could impair the ability of the free flight tools to achieve their full potential and (2) the extent to which these tools will increase efficiency and capacity while helping to minimize delays in our nation’s airspace system. Our review focused on three free flight phase 1 tools—the User Request Evaluation Tool, the Traffic Management Advisor, and the passive Final Approach Spacing Tool—because they account for approximately 80 percent of FAA’s $630 million estimated investment for phase 1 and approximately 80 percent of FAA’s $717 million estimated investment for phase 2. We did not review the Surface Movement Advisor or the Collaborative Decision Making tools because generally they had been implemented at all phase 1 locations when we started this review and FAA does not intend to deploy their identical functionality in phase 2. To obtain users’ insights into the technical and operational issues and the expected benefits from these tools, we held four formal discussion group meetings with nationwide user teams made up of controllers, technicians, and supervisors from all the facilities currently using or scheduled to receive the Traffic Management Advisor during phase 1. We also visited and/or held conference calls with controllers, technicians, and supervisors that used one or more of these tools in Dallas, Texas; southern California; Minneapolis, Minnesota; Memphis, Tennessee; Indianapolis, Indiana; and Kansas City, Kansas. development and acquisition. Based on these criteria, we interviewed FAA officials in the Free Flight Program Office, the Office of Air Traffic Planning and Procedures, and the Office of Independent Operational Test and Evaluation. To review test reports and other documentation highlighting technical and operational issues confronting these tools, we visited FAA’s William J. Hughes Technical Center in Atlantic City, New Jersey, and FAA’s prime contractors that are developing the three free flight tools. We also visited the National Aeronautics and Space Administration’s Ames Research Center at Moffett Field, California, to understand how its early efforts to develop free flight tools are influencing FAA’s current enhancement efforts. To determine the extent to which the free flight tools will increase capacity and efficiency while helping to minimize delays, we analyzed the relevant legislative and Office of Management and Budget’s requirements that recognize the need for agencies to develop performance goals for their major programs and activities. We also interviewed FAA officials in the Free Flight Program Office and the Office of System Architecture and Investment for information on the performance goals of the free flight tools during phase 1. In addition, we held discussions with officials from RTCA, which provides a forum for government and industry officials to develop consensus-based recommendations. We also reviewed documentation explaining how the tools are expected to and actually have helped increase system capacity and efficiency, thereby helping to minimize delays. We conducted our review from October 2000 through July 2001, in accordance with generally accepted government auditing standards. In addition to those named above, Nabajyoti Barkakati, Jean Brady, William R. Chatlos, Peter G. Maristch, Luann M. Moy, John T. Noto, and Madhav S. Panwar made key contributions to this report. | This report reviews the Federal Aviation Administration's (FAA) progress on implementing the Free Flight Program, which would provide more flexibility in air traffic operations. This program would increase collaboration between FAA and the aviation community. By using a set of new automated technologies (tools) and procedures, free flight is intended to increase the capacity and efficiency of the nation's airspace system while helping to minimize delays. GAO found that the scheduled March 2002 date will be too early for FAA to make an informed investment decision about moving to phase 2 of its Free Flight Program because of significant technical and operational issues. Furthermore, FAA's schedule for deploying these tools will not allow enough time to collect enough data to fully analyze their expected benefits. Currently, FAA lacks enough data to demonstrate that these tools can be relied upon to provide accurate data. |
The mission of the U.S. Department of Health and Human Services (HHS) is to "enhance the health and well-being of Americans by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine, public health, and social services." HHS is organized into 11 main agencies, called "operating divisions," which are responsible for a wide variety of health and human services and related research (see a list of these agencies in the g lossary below). In addition, HHS has a number of "staff divisions" within the Office of the Secretary (OS). These staff divisions fulfill a broad array of management, research, oversight, and emergency preparedness functions in support of the entire department. Eight of the HHS operating divisions are part of the U.S. Public Health Service (PHS). PHS agencies have diverse missions in support of public health, ranging from the provision of health care services and supports (e.g., IHS, HRSA, SAMHSA), to the advancement of health care quality and medical research (e.g., AHRQ, NIH), to the prevention and control of infectious and chronic diseases and environmental health hazards (e.g., CDC, ATSDR), and the regulation of food and drugs (e.g., FDA). The three remaining HHS operating divisions are not PHS agencies: ACF, ACL, and CMS. ACF and ACL largely administer human services programs focused on the well-being of vulnerable children, families, older Americans, and individuals with disabilities. CMS—which accounts for the largest share of the HHS budget by far—is responsible for administering the Medicare and Medicaid programs, and some aspects of the private health insurance market. On February 9, 2016, the Obama Administration released its FY2017 budget request. Under this proposal, HHS would spend an estimated $1.145 trillion in outlays in FY2017 (see Table 1 ). This represents an increase of $34 billion (+3%) from FY2016. The Office of Management and Budget (OMB) estimates that HHS will account for more than a quarter of all federal outlays (nearly 28%) in FY2017. HHS has accounted for at least 20% of all federal outlays in each year since FY1995. Figure 1 displays proposed FY2017 HHS outlays by major program or spending category in the President's request. As this figure shows, mandatory spending typically accounts for the vast majority of the HHS budget. In fact, two programs—Medicare and Medicaid—are expected to account for 86% of all estimated HHS spending in FY2017. Medicare and Medicaid are "entitlement" programs, meaning the federal government is required to make mandatory payments to individuals, states, or other entities based on criteria established in authorizing law. This figure also shows that discretionary spending accounts for only about 8% of FY2017 HHS outlays in the President's request. Although discretionary spending represents a relatively small share of total HHS spending, the department nevertheless receives more discretionary money than most federal departments. According to OMB data, more than half of the President's request for discretionary budget authority in FY2017 (51%) would go to the Department of Defense. However, HHS would receive the next largest share (nearly 7%) of all discretionary budget authority requested by the President, followed by the Department of Veterans Affairs and the Department of Education. Readers should be aware that the HHS budget includes a broader set of budgetary resources than the amounts provided to HHS through the annual appropriations process. As a result, certain amounts shown in FY2017 HHS budget materials (including amounts for prior years) will not match amounts provided to HHS by annual appropriations acts and displayed in accompanying congressional documents. There are several reasons for this, described throughout this section. First, mandatory spending accounts for a large portion of the HHS budget and much of that spending is provided directly by authorizing laws, not through appropriations acts. All discretionary spending is controlled and provided through the annual appropriations process. By contrast, all mandatory spending is controlled by the program's authorizing statute. In most cases, that authorizing statute also provides the funds for the program. However, the budget authority for some mandatory programs, including Medicaid, while controlled by criteria in the authorizing statute, must still be provided through the annual appropriations process; such programs are commonly referred to as "appropriated entitlements" or "appropriated mandatories." In addition, the HHS budget request takes into account the department as a whole, while the appropriations process breaks up HHS funding across three different appropriations bills. While most of the discretionary spending for the department is provided through the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) Appropriations Act, funding for certain HHS agencies and activities is appropriated in two other bills—the Departments of the Interior, Environment, and Related Agencies Appropriations Act (INT) and the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act (AG). Table 2 lists HHS agencies by appropriations bill. Moreover, the Administration's estimates for HHS programs may follow different conventions than congressional scorekeepers. For example, certain transfers of funding between HHS agencies (or from HHS to other federal agencies) that occurred in prior fiscal years, or are expected to occur in this fiscal year, may be accounted for in the Administration estimates but not necessarily in the congressional documents. In addition, HHS budget materials may include two different estimates for mandatory spending programs in FY2017: proposed law and current law . Proposed law estimates take into account changes in mandatory spending proposed in the FY2017 HHS budget request. Such proposals would need to be enacted into law to affect the budgetary resources ultimately available to the mandatory spending program. HHS materials may also show a current law or current services estimate for mandatory spending programs. These estimates assume that no changes will be made to existing policies, and instead estimate mandatory spending for programs based on criteria established in current authorizing law. The HHS budget estimates in this report reflect the proposed law estimates for mandatory spending programs, but readers should be aware that other HHS, OMB, or congressional estimates might reflect current law instead. Finally, the amounts of discretionary spending provided in the appropriations bills do not necessarily account for all of the budgetary resources that are available to those agencies. This is because agencies within HHS may have the authority to expend user fees and other types of collections that effectively supplement those appropriations. In addition, agencies may receive transfers of budgetary resources from other sources, such as from the Public Health Service Evaluation Set-Aside (also referred to as the PHS Tap) or one of the mandatory trust funds established by the Patient Protection and Affordable Care Act (ACA, P.L. 111-148 ). Budgetary totals that account for these sorts of resources in the Administration estimates are referred to as being at the "program level." HHS agencies that have historically had notable differences between the amounts in the appropriations bills and their program level include the Food and Drug Administration (due to user fees) and the Agency for Healthcare Research and Quality (due to transfers). The program level for each agency is listed in the table entitled, "Composition of the HHS Budget Discretionary Programs" in the HHS FY2017 Budget in Brief (BIB). Table 3 displays budgetary totals for each HHS operating division. These totals are inclusive of both mandatory and discretionary spending. The FY2015, FY2016, and FY2017 figures are taken from the HHS BIB for FY2017; the FY2014 figures are taken from the FY2016 BIB. The remainder of this section provides a brief summary of the mission of each operating division, the FY2017 budget request, and links to additional resources related to that request. A table of K ey P olicy S taff is included at the end of the report. The figures in this section are provided in terms of budget authority and outlays. Budget authority (BA) is the authority provided by federal law to enter into contracts or other financial obligations that will result in immediate or future expenditures involving federal government funds. Outlays occur when funds are actually expended from the Treasury and could be the result of either new budget authority enacted in the current fiscal year or unexpended budget authority that was enacted in previous fiscal years. As a consequence, the BA and outlays in this table represent two different ways of accounting for the funding that is provided to each HHS agency through the federal budget process. The ACF mission is focused on promoting the "economic and social well-being of families, children, individuals, and communities." ACF administers a wide array of human services programs, including Temporary Assistance for Needy Families (TANF), Head Start, child care, the Social Services Block Grant (SSBG), and various child welfare programs. Relevant Appropriations Bill: LHHS FY2017 Request: BA: $63.005 billion (+$9.864 billion compared to FY2016) Outlays: $58.266 billion (+$5.491 billion compared to FY2016) Additional Resources Related to the FY2017 Request : Congressional Justification, available at https://www.acf.hhs.gov/sites/default/files/olab/final_cj_2017_print.pdf . All-Purpose Table (p. 14), available at https://www.acf.hhs.gov/sites/default/files/olab/final_cj_2017_print.pdf#page=19 . BIB Chapter (p. 131), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page-135 . The ACL mission is focused on maximizing the "independence, well-being, and health of older adults, people with disabilities across the life span, and their families and caregivers." ACL administers a number of programs targeted at older Americans and the disabled, including Home and Community-Based Supportive Services and State Councils on Developmental Disabilities. Relevant Appropriations Bill: LHHS FY2017 Request: BA: $1.969 billion (+$30 million compared to FY2016) Outlays: $1.929 billion (-$279 million compared to FY2016) Additional Resources Related to the FY2017 Request: Congressional Justification, available at http://www.acl.gov/About_ACL/Budget/docs/FY_2017_ACL_CJ.pdf . All-Purpose Table (p. 17), available at http://www.acl.gov/About_ACL/Budget/docs/FY_2017_ACL_CJ.pdf#page=25 . BIB Chapter (p. 151), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page=155 . The AHRQ mission is focused on research to make health care "safer, higher quality, more accessible, equitable, and affordable." Specific AHRQ research efforts are aimed at reducing the costs of care, promoting patient safety, measuring the quality of health care, and improving health care services, organization, and financing. Relevant Appropriations Bill: LHHS FY2017 Request: BA: $280 million (-$54 million compared to FY2016) Outlays: $394 million (+$199 million compared to FY2016) Additional Resources Related to the FY2017 Request: Congressional Justification, available at http://www.ahrq.gov/sites/default/files/wysiwyg/cpi/about/mission/budget/2017/cj2017.pdf . All-Purpose Table (p. 7), available at http://www.ahrq.gov/sites/default/files/wysiwyg/cpi/about/mission/budget/2017/cj2017.pdf#page=13 . BIB Chapter (p. 58), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page=62 . The CDC mission is focused on "disease prevention and control, environmental health, and health promotion and health education." CDC is organized into a number of centers, institutes, and offices, some focused on specific public health challenges (e.g., injury prevention), and others focused on general public health capabilities (e.g., surveillance and laboratory services). In addition, the Agency for Toxic Substances and Disease Registry (ATSDR) is headed by the CDC director. For that reason, the ATSDR budget is often shown within CDC. Following the conventions of the FY2017 HHS Budget in Brief, ATSDR's budget request is included in the CDC totals shown in this report. ATSDR's work is focused on preventing or mitigating the adverse effects resulting from exposure to hazardous substances in the environment. Relevant Appropriations Bill s : LHHS (CDC) INT (ATSDR) FY2017 Request (CDC and ATSDR combined) : BA: $7.455 billion (-$203 million compared to FY2016) Outlays: $7.877 billion (+$635 million compared to FY2016) Additional Resources Related to the FY2017 Request: CDC Congressional Justification, available at http://www.cdc.gov/budget/documents/fy2017/fy-2017-cdc-congressional-justification.pdf . All-Purpose Table (p. 24), available at http://www.cdc.gov/budget/documents/fy2017/fy-2017-cdc-congressional-justification.pdf#page=24 . ATSDR Congressional Justification, available at http://www.cdc.gov/budget/documents/fy2017/fy-2017-atsdr.pdf BIB Chapter (p. 37), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page=41 . The CMS mission is focused on ensuring "effective, up-to-date health care coverage and promot[ing] quality care for beneficiaries" of Medicare, Medicaid, the State Children's Health Insurance Program (CHIP), and new private insurance and private insurance market reform programs. The President's budget estimates that roughly 125 million individuals will be enrolled in Medicare, Medicaid, and CHIP in FY2017. Relevant Appropriations Bill: LHHS FY2017 Request: BA: $1,019.936 billion (+$21.908 billion compared to FY2016) Outlays: $1,017.627 billion (+$25.096 billion compared to FY2016) Additional Resources Related to the FY2017 Request: Congressional Justification, available at https://www.cms.gov/About-CMS/Agency-Information/PerformanceBudget/Downloads/FY2017-CJ-Final.pdf . All-Purpose Table (p. 10), available at http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM485237.pdf#page=25 . BIB Chapter (p. 63), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page=67 . The FDA mission is focused on regulating the safety of human foods, dietary supplements, cosmetics, and animal foods; and the safety and effectiveness of human drugs, biological products (e.g., vaccines), medical devices, radiation-emitting products, and animal drugs. It also regulates the manufacture, marketing, and sale of tobacco products. Relevant Appropriations Bill: AG FY2017 Request: BA: $2.821 billion (+$91 million compared to FY2016) Outlays: $2.624 billion (+$161 compared to FY2016) Additional Resources Related to the FY2017 Request: Congressional Justification, available at http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM485237.pdf . All-Purpose Table (p. 17), available at http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM485237.pdf#page=25 . BIB Chapter (p. 19), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page=23. The HRSA mission is focused on "improving access to health care for those who are uninsured, isolated, or medically vulnerable." Among its many programs and activities, HRSA supports health care workforce training, the National Health Service Corps, and the federal health centers program, which provides grants to nonprofit entities that provide primary care services to people who experience financial, geographic, cultural, or other barriers to health care. Relevant Appropriations Bill: LHHS FY2017 Request: BA: $10.866 billion (+$96 million compared to FY2016) Outlays: $11.537 billion (+$1.241 billion compared to FY2016) Additional Resources Related to the FY2017 Request: Congressional Justification, available at http://www.hrsa.gov/about/budget/budgetjustification2017.pdf . All-Purpose Table (p. 17), available at http://www.hrsa.gov/about/budget/budgetjustification2017.pdf#page=17 . BIB Chapter (p. 26), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page=30 . The IHS mission is focused on providing "comprehensive health services for American Indians and Alaska Natives ... to improve their health status and overall quality of life." IHS provides health care for approximately 2.2 million eligible American Indians/Alaska Natives through a system of programs and facilities located on or near Indian reservations, and through contractors in certain urban areas. Relevant Appropriations Bill: INT FY2017 Request: BA: $5.368 billion (+$403 million compared to FY2016) Outlays: $5.260 billion (+$186 million compared to FY2016) Additional Resources Related to the FY2017 Request: Congressional Justification, available at https://www.ihs.gov/budgetformulation/includes/themes/newihstheme/documents/FY2017CongressionalJustification.pdf . All-Purpose Table (p. 8), available at https://www.ihs.gov/budgetformulation/includes/themes/newihstheme/documents/FY2017CongressionalJustification.pdf#page=14 . BIB Chapter (p. 32), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page=36 . The NIH mission is focused on supporting and conducting research "into the causes, diagnosis, treatment, control, and prevention of diseases" and promoting the "acquisition and dissemination of medical knowledge to health professionals and the public." NIH is organized into 27 research institutes and centers, headed by the NIH Director. In FY2017, the majority of NIH budget (81%) will support research performed by more than 300,000 non-federal scientists and technical personnel who work at more than 2,500 universities, hospitals, medical schools, and other research institutions. Relevant Appropriations Bill: LHHS FY2017 Request: BA: $32.305 billion (+$758 million compared to FY2016) Outlays: $32.302 billion (+$2.081 million compared to FY2016) Additional Resources Related to the FY2017 Request: Congressional Justification, available at https://officeofbudget.od.nih.gov/pdfs/FY17/31-Overview.pdf . All-Purpose Table (p. 3), available at https://officeofbudget.od.nih.gov/pdfs/FY17/31-Overview.pdf#page=7 . BIB Chapter (p. 46), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page=50 . The SAMHSA mission is focused on reducing the "impact of substance abuse and mental illness on America's communities." SAMHSA coordinates behavioral health surveillance to better understand the impact of substance abuse and mental illness on children, individuals, and families, and the costs associated with treatment. Relevant Appropriations Bill: LHHS FY2017 Request: BA: $4.107 billion (+$461 million compared to FY2016) Outlays: $3.701 billion (-$109 million compared to FY2016) Additional Resources Related to the FY2017 Request: Congressional Justification, available at http://www.samhsa.gov/sites/default/files/samhsa-fy-2017-congressional-justification.pdf . All-Purpose Table (p. 17), available at http://www.samhsa.gov/sites/default/files/samhsa-fy-2017-congressional-justification.pdf#page=25 . BIB Chapter (p. 52), available at http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf#page=56 . | This report provides information about the FY2017 budget request for the Department of Health and Human Services (HHS). It begins by reviewing the department's mission and structure. This is followed by an overview of the total FY2017 request for the department. Next, the report discusses the concept of the HHS budget as a whole, compared to funding provided to HHS through the annual appropriations process. This distinction is important because certain amounts shown in FY2017 HHS budget materials (including amounts for prior years) will not match amounts provided to HHS by annual appropriations acts (and displayed in accompanying congressional documents) because they take into account a broader set of budgetary resources. The report concludes with a breakdown of the HHS request by agency, along with additional HHS resources that provide further information on the request. A table of key policy staff is included at the end of the report. |
Proposals to limit Senate debate are as old as the Senate itself. Over the 224-year history of the body, numerous procedures have been proposed to allow the Senate to end discussion and act. The most important debate-limiting procedure enacted was the adoption in 1917 of the "cloture rule," codified in paragraph 2 of Senate Rule XXII. Under the current version of this rule, a process for ending debate on a pending measure or matter may be set in motion by a supermajority vote of the Senate. Since the Senate's adoption of the cloture rule in 1917, proposals have been advanced to repeal or amend it in almost every session of Congress. At times, Senators of both political parties have debated the merits of the Senate's tradition of free and unlimited debate. These debates have occurred at different times and under different sets of circumstances as Senators attempted, for example, to prevent filibusters of civil rights measures, pass consumer protection legislation, or secure the confirmation of judicial or executive branch nominations. Debates on the cloture rule have frequently focused on whether the Senate must consider amendments to it under the body's existing rules, including Rule XXII itself. This argument rests on the principle that the Senate is a "continuing body," and relatedly, that its rules stay in force from one Congress to the next. A contrary argument contends that this principle has the effect of "entrenching" the existing rules against change, a situation which amounts to an unconstitutional limit on the power of the body to set the terms of its own operation. To overcome these difficulties, Senators attempting to change Rule XXII have employed various procedural tactics, including seeking to invoke cloture by majority vote, seeking opinions by the Vice President acting as presiding officer that the cloture rule itself is unconstitutional, and arguing that the Senate's standing rules do not apply on the first day of a Congress. Although many attempts have been made to amend paragraph 2 of Rule XXII, only six amendments have been adopted since the cloture rule was enacted in 1917: those undertaken in 1949, 1959, 1975, 1976, 1979, and 1986. Each of these changes was made within the framework of the existing or "entrenched" rules of the Senate, including Rule XXII. In 1949, the cloture rule was amended to apply to all "matters," as well as measures, a change that expanded its reach to nominations, most motions to proceed to consider measures, and other motions. A decade later, in 1959, its reach was further expanded to include debate on motions to proceed to consider changes in the Senate rules themselves. The threshold for invoking cloture was lowered in 1975 from two-thirds present and voting to three-fifths of the full Senate except on proposals to amend Senate rules. In a change made in 1976, amendments filed by Senators after cloture was invoked were no longer required to be read aloud in the chamber if they were available at least 24 hours in advance. In 1979, Senators added an overall "consideration cap" to Rule XXII to prevent so-called post-cloture filibusters, which occurred when Senators continued dilatory parliamentary tactics even after cloture had been invoked. In 1986, this "consideration cap" was reduced from 100 hours to 30 hours. In its current form, which was adopted in 1986, Rule XXII provides that a cloture motion must be signed by 16 Senators and presented on the Senate floor. One hour after the Senate meets on the second calendar day of session after a cloture motion has been filed (and after a quorum has been ascertained), the presiding officer puts the question, "Is it the sense of the Senate that the debate shall be brought to a close?" The cloture motion is then subject to a mandatory yea-and-nay vote. If three-fifths of Senators—60 if there is no more than one vacancy in the body—vote for the cloture motion, the Senate must take final action on the matter on which it has invoked cloture by the end of 30 total hours of additional consideration. Invoking cloture on a proposal to amend the Senate's standing rules requires a higher threshold: approval by two-thirds of the Senators present and voting or 67 senators if there are no vacancies and all Senators vote. Once cloture has been invoked, the clotured matter remains the pending business of the Senate until it is disposed of, and no Senator may speak for more than one hour. Senators may yield all or part of their allotted hour to a floor manager or floor leader, who may then yield time to other Senators. Each floor manager and leader, however, can have no more than two hours in total yielded to him or her. As with most Senate procedures, any of these requirements may be waived or their operations altered by unanimous consent. The mandatory quorum call, for example, is almost always waived by unanimous consent. After cloture has been invoked, no dilatory amendments or motions are permitted, and all debate and amendments must be germane. Only amendments filed before the cloture vote (or still pending, if germane) may be considered, and a Senator may not call up more than two amendments until every other Senator has had an opportunity to do likewise. Printed amendments that have been available for at least 24 hours are not read when called up. Time for votes, quorum calls, and other actions is charged against the 30-hour limit on consideration. This time limit may be extended by joint leadership motion if three-fifths of all Senators vote for a non-debatable motion to do so. Senators who have not used or yielded 10 minutes of their hour are guaranteed up to 10 minutes to speak. When all time expires, the Senate immediately votes on any pending amendments and then on the underlying matter. Supporters of extended debate believe that the American system of government should safeguard certain rights of legislative minorities against the power of a majority. Further, they argue, obstruction is sometimes justified to prevent a majority from restricting the rights of a minority until a broad political consensus has developed on an issue. They note that the structure of the Senate was intended to protect the rights of smaller states, and assert that the diminishment of minority rights would undermine this intent. Defenders of extended debate also contend that, in the long run, matters that are truly in the nation's best interest have not been permanently blocked by extended debate. Likewise, the Senate's tradition of debate has protected different political parties at different times in history. The cloture rule has been in effect for nearing 100 years with little ill effect, they contend. Supporters of extended debate believe that the ability of any Senator to speak at length about virtually any topic at any time is a unique characteristic of the Senate that allows the chamber to play a vital role in the legislative process, serving to cool passions and force deliberation. Furthermore, supporters argue, this more deliberative approach was intended by the framers of the Constitution, differentiating the Senate from the House. Removed of this deliberative function, they believe the Senate would become a shadow of the larger House of Representatives, and would specifically surrender its unique role as a check on the executive branch through its role in executive business—that is, nominations and treaties. Supporters of restricting debate argue that it is undemocratic to allow a determined minority to prevent an institutional majority from working its will. They say that the current process gives too much power to the minority at the expense of the majority, contending that although the founders intended the Senate to be more deliberative than the House, they did not intend to create a chamber where the minority could stall or prevent all action. Further, they believe it undermines public accountability of a majority in its responsibilities to manage the chamber's policy agenda. In addition, extended debate by one Senator or a small group of Senators expends valuable time and money, supporters of changing debate rules argue, and brings public disrepute because the Senate cannot act in a timely fashion on important issues. Much legislation and many qualified nominations have been delayed or defeated by extended debate, they contend. Supporters of proposals to limit debate assert that their proposed changes would still provide those who oppose a bill or matter significant time to discuss the proposal, but would not allow them to block action on it if a majority of the Senate supported it. Proponents of additional debate limitations focus on the benefits of an up or down vote, regardless of the outcome. As noted above, the Senate has considered—and in some cases, adopted—changes to the cloture rule and associated procedures at various times in the past. In recent Congresses—and perhaps especially in the 112 th (2011-2012) and 111 th (2009-2010) Congresses—some Senators have expressed renewed concern over the effect of extended debate on the Senate's capacity to act efficiently. Rather than list all (sometimes overlapping) proposals introduced in recent Congresses, the discussion below groups proposals into categories based on the procedural mechanism by which the change would be effected or the overall goal of the change. The first category addressed below includes proposals that provide a non-rule-based mechanism by which the Senate could change its rules or precedents, or both, without needing to surmount the supermajority hurdle present in existing rules; specifically, these proposals hinge on a novel ruling by the Senate's presiding officer in relation to Senate rules on debate or the constitutionality thereof. The second category discussed focuses on changes to the rules that would alter the vote threshold by which cloture is invoked. A third group of proposals focuses on the time the Senate must expend in using the cloture process to end debate on a question. Fourth, the report discusses proposals to limit debate on only certain questions (e.g., on the motion to proceed, motions related to establishing a conference committee). The fifth and final category addressed includes proposals that would increase the procedural burden on those opposing an end to debate on a particular matter. This section of the report then concludes by addressing other proposals that have been discussed in the context of changing the cloture process. As noted earlier, the Senate considers itself to be a "continuing body." This is because (1) the Constitution provides for overlapping Senate terms by which only one-third of the seats can theoretically turn over in each election (and therefore, two-thirds of the Senate continues to serve with no interruption), and (2) the number of Senators continuing their service exceeds the number constitutionally required (a simple majority) for a quorum. Thus, there is no point at the beginning of a new Congress at which the Senate could be said to lack the possibility of a quorum for processing chamber business. This principle has been interpreted to imply that the Senate is continuously organized across Congresses, as well. In other words, Senate rules continue to apply across Congresses with no action necessary from the body to readopt them. The Senate did not readopt its rules at the beginning of the 2 nd Congress (1791-1792), and standing rules changes have always been accomplished in the context of the procedures and precedents established by the standing rules as they existed at the time. In 1959, the Senate explicitly incorporated this understanding into the standing rules, which state, "The Rules of the Senate shall continue from one Congress to the next Congress unless they are changed as provided in these rules" (Rule V, paragraph 2). Because of the continued application of Senate rules, it has been said that Senate rules are "entrenched" in the sense that action to change the standing rules is constrained by existing rules that provide limited mechanisms to end debate on most matters. Thus, to change the rules requires (1) using procedures that may require a supermajority for certain steps, or (2) a departure from the principle that the existing system of procedure (and precedents in relation thereto) remains in effect. In the past several Congresses, there has been increased discussion of what recently has been called by some a "nuclear" parliamentary option to end debate and vote. Under such a scenario, the chair, perhaps occupied by the Vice President serving as presiding officer or by the President pro tempore of the Senate, would set aside the existing provisions of Rule XXII and rule that cloture could be invoked by simple majority vote. Supporters of such an approach argue that if such a ruling were appealed by opponents or submitted to the Senate for decision, and then sustained by a majority vote, debate would end and the pending business could then be brought to a vote. In another version of this scenario, a Senator might raise a constitutional point of order against the decision that cloture had not been invoked on a matter, and the same end achieved if the point of order were sustained by a majority vote of Senators. Supporters argue that this proceeding would be permissible because under the Constitution, the Senate has the express right to make, or change, the rules of its proceedings at any time. This has led some Senators to call this scenario the "constitutional option." Under Senate precedents, however, constitutional questions are to be submitted to a vote of the full chamber for decision; therefore, the chair also would have to act in contravention of the precedent that constitutional questions are submitted to the Senate (or the rule that submitted questions are debatable), perhaps by stating that the body has a right to "get to the question" at hand. In the 108 th and 109 th Congresses, the focus of such proposals was on certain judicial nominations, not on other business. Those concerned about filibusters on these questions in particular argued that the inability of the Senate to reach a final vote on a nomination represented an abdication by the Senate of a constitutional duty, that of advising and consenting to nominations. In the current context (as well as in some historical ones), these proposals are often intended instead to apply to all debatable questions, or, in some cases, at least to questions in relation to a rules change at the start of a new Congress. Indeed, Senate floor proceedings at the start of the 112 th Congress were conducted in light of this perspective, including actions that kept the Senate in the first "legislative day" beyond the initial calendar day of Senate session. Opponents have used the term nuclear to describe these scenarios, in part because they rely on steps that would contravene existing rules or precedents, or both, but also because of the belief that their use would destroy the comity and senatorial courtesy necessary in a body that operates overwhelmingly by unanimous consent. They further argue that such an approach might destroy the unique character of the Senate itself, making it more like the House of Representatives, where a majority has the ability to halt debate any time it wishes. Observers point out that such a parliamentary proceeding is not unprecedented. On several occasions, Vice Presidents acting as the presiding officer (including Vice Presidents Richard Nixon, Hubert Humphrey, and Nelson Rockefeller) offered advisory opinions from the chair that the provisions of Rule XXII can be changed by a majority vote of the Senate at the beginning of a Congress. In 1975, a ruling to this effect, submitted to the chamber by Vice President Nelson Rockefeller, was sustained by a vote of the Senate. The Senate later reversed itself by recorded vote, but whether this obliterated the precedent permitting cloture by majority vote has been a source of disagreement. For example, Senator Robert C. Byrd, the architect of the 1975 cloture amendment, observed that the reversal vote "erased the precedent of majority cloture established two weeks before, and reaffirmed the 'continuous' nature of Senate rules." Others argued that such a precedent was established and was not overturned. Senator Walter F. Mondale observed, "the Rule XXII experience was significant because for the first time in history, a Vice President and a clear majority of the Senate established that the Senate may, at the beginning of a new Congress and unencumbered by the rules of previous Senates, adopt its own rules by majority vote as a constitutional right. The last minute votes attempting to undo that precedent in no way undermine that right." One element of the cloture rule that the Senate has changed on occasion is the voting threshold required for the invocation of cloture, which is currently three-fifths of the full Senate (60, assuming no more than one vacancy). Some have proposed changing this threshold to three-fifths of those present and voting (provided that a quorum—a simple majority—is present). This change would lower the number of votes necessary to invoke cloture by only a few in some cases, but it could affect a handful of significant votes; in addition, for those voting against cloture, it would provide an incentive to be present and cast a vote because nonvoting Senators would have the effect of lowering the number of votes needed for cloture. (If only a quorum voted, then supporters would theoretically need as few as 31 of 51 votes—that is, three-fifths of a quorum.) A related proposal would change Rule XXII to allow for multiple cloture votes in which the vote threshold to invoke cloture gradually drops lower with each successive vote (e.g., starting at 60, then dropping to 57, then 54, then 51). By implementing a change like this, supporters say, the Senate could allow a determined simple majority the ability to eventually work its will. In past Congresses, advocates proposed to apply this "ratchet" process only to nominations—premised on a distinction between executive business and legislative business—arguing that the existing supermajority vote requirement in pursuit of a vote on a nomination is not consistent with the constitutional provisions for Senate advice and consent. In the current context, however, this sort of change has been proposed to apply to all matters—including legislation—on which a cloture motion might be filed. In these cases, there would be no guarantee that the Senate would actually debate the matter on which cloture has been filed during the days the cloture motion must lay over. In addition, because recent proposals along these lines would not allow for a subsequent cloture motion to be filed until after the disposition of the previous motion, this approach would require significant expenditure of floor time. (Currently, cloture petitions can be filed on successive days—or even on the same day—without first disposing of the previous petition, so that each motion can meet the layover requirement simultaneously.) Other proposals seek to change Rule XXII so as to allow a simple majority to invoke cloture on the first attempt, not just to allow for a gradual reduction in the vote threshold. Proponents argue that the existing cloture process (including the two-day layover of the motion and the possibility of 30 hours of post-cloture consideration) provides ample time for deliberation and debate, and that the supermajority requirement is too often used to block passage of a matter rather than subject it to due deliberation. Opponents of this idea note that the complexity of legislation and the need for careful deliberation and negotiation often requires more time, especially in situations in which policy proposals are brought to the floor with little or no committee consideration (a practice that some Senators assert is on the increase in recent Congresses). Finally, some proposals would allow for a lower voting threshold to invoke cloture in only specific circumstances. Some, for example, have proposed applying a lower threshold for confirmation of nominees, on the argument that a President is entitled to some deference in his nominations. Some advocates of this position support a lower threshold only for executive branch nominees, not for judicial nominees, due to the potential lifetime nature of appointments to the federal bench. Other proposals attempt to encourage more bipartisan agreement on decisions to end debate or at least to discourage filibusters characterized by strict party polarization; for example, a vote threshold of less than three-fifths might be required for cloture, but only in circumstances in which some majority party members oppose cloture or, alternatively, when minority party members support an end to debate. Other proposals focus on shortening the cloture process itself. As noted earlier, invoking cloture involves a two-day layover period once a cloture motion is filed, and then—if cloture is invoked—up to 30 additional hours of consideration of the matter. This means that even if a cloture motion is immediately filed on a matter on which three-fifths of the Senate will support cloture, the Senate could very well devote five days of floor time getting to a final vote. Due to this time-consuming process, some items of business are never considered on the Senate floor; the majority party has to decide which matters warrant the use of the extensive floor time that may be necessary to leverage the support of three-fifths of the Senate through a cloture process. Proposals to shorten this process can focus on the pre-cloture layover period, post-cloture consideration, or both. In regard to shortening the two-day layover period, one recent proposal reduces the two-day layover period to a 24-hour layover period. Others have proposed creating a non-debatable motion that may be made after a cloture motion has been filed, which would reduce the layover period to some specified amount of time. Such a motion could be subject to a supermajority vote threshold, so that only on matters with broad support could the period be reduced. Alternatively, some proposals instead provide a mechanism by which the majority leader under certain circumstances could move the Senate to an immediate vote on cloture before the layover period has expired. Other proposals seek to potentially reduce floor time expended by the Senate during the period after cloture has been invoked. Some recent proposals apply this idea to consideration of all (or most) nominations by eliminating all post-cloture consideration after a successful cloture vote. Others propose a two-hour post-cloture consideration or debate limit on all or certain nominations. Another recent proposal sought to limit post-cloture consideration of nominations and motions to proceed by allowing the majority leader, if no one sought recognition on the floor to speak during the 30 hours of post-cloture debate, to move the Senate to an immediate vote on the nomination or motion to proceed on which the Senate had voted for cloture. Alternatively, some have proposed altering the existing non-debatable motion in Rule XXII by which three-fifths of the Senate can extend the 30-hour period such that it could also be used to reduce the 30-hour period, while another sought to divide the 30 hours of post-cloture time for control by each party (which could allow for some time to potentially be yielded back). Rather than attempting to reduce the use of floor time associated with the cloture process in general, some proposals instead focus on providing new debate limitations on only certain motions or matters, such that a cloture process would not be necessary in some circumstances. Some recent proposals along these lines—addressed below—have focused on the motion to proceed, motions to go to conference, certain amending situations, and new limits in relation to debate on a pending nomination. The motion to proceed to a matter, under most circumstances, is subject to debate. Those opposed to Senate consideration of a matter, therefore, typically may subject it to extended debate, thereby requiring the invoking of cloture to end debate on the motion to proceed. The only other alternative for bringing a measure to the floor for consideration is via unanimous consent (or as a proposed amendment to another measure). Therefore, many measures that face opposition in the Senate may be subject to at least two cloture processes (on the motion to proceed and on the measure itself), which even if supported by three-fifths of the Senate, requires the expenditure of significant time (during the layover period for the cloture motion, as well as during the use of any post-cloture debate time). One way to hasten Senate action on a matter would be to eliminate or curtail the floor time spent considering the motion to proceed. Such a change would not remove the ability of opponents to prevent passage of a measure with a coalition sufficient to block cloture because the measure itself—and amendments to it—would still be subject to extended debate, theoretically requiring a cloture process and the support of 60 Senators to end debate and allow a vote on the matter. In addition, it could be argued that the two-day layover required for a cloture motion is necessary when filed on a measure because those days are used for the drafting and filing of amendments that may be proposed post-cloture; these activities are not relevant, however, for cloture on a motion to proceed to consider. Changing Senate rules such that all (or some additional) motions to proceed could be non-debatable could have a significant effect on the time the Senate spends on each matter it considers. Other proposals to limit the time spent on motions to proceed include ideas that limit debate without eliminating it entirely. For example, the Senate could instead expand the number of questions for which the motion to proceed is not debatable beyond the existing circumstances. Alternatively, the Senate could allow debate on these motions to proceed, but limit it to a certain number of hours. Finally, the Senate could instead establish a new non-debatable motion to limit debate on a pending motion to proceed, if made by the majority leader. This change, supporters argue, would allow the Senate to make a decision about the length of debate on the motion to proceed on a case-by-case basis. Of course, the Senate could make such a motion to limit debate subject to a simple majority vote, but even subjecting the motion to a supermajority threshold could serve to limit the time spent on motions to proceed. Certainly, a majority threshold would prove an easier hurdle to clear in deciding whether to subject a certain motion to proceed to extended debate. However, even a supermajority threshold of three-fifths for such a vote could also provide the Senate a faster way of bringing the measure to the floor; while the 60 votes necessary likely would be the same as the 60 votes necessary to invoke cloture on a motion to proceed, allowing this motion to limit debate could still allow the Senate to immediately agree to the motion to proceed rather than spend the multiple days necessary to invoke cloture and conclude consideration of a motion to proceed. By precedent, the three actions the Senate must take when arranging to send a measure to conference with the House are all separate: disagree to a House amendment (or insist on a Senate amendment); request (or agree to) a conference; and grant the presiding officer the authority to appoint conferees. In addition, Senators can offer motions to instruct conferees, and various other motions are in order during the consideration of motions to disagree (or insist) and motions to request (or agree to) a conference committee. The Senate normally takes all three required actions en bloc by unanimous consent. If a Senator objected to such a unanimous consent request, however, debate could occur separately on each of the three required actions; under current procedures, the floor manager may not offer one motion to take all three actions. Although cloture could be invoked on each of the three actions, the requirement to do so separately on each has made the threat of a single Senator to obstruct the process at this stage extremely potent. Some Senators have suggested that Senate rules be amended to allow these motions to be combined, thus permitting a single motion to facilitate arranging for a conference committee. Leaving the unified motion debatable could still require a cloture process, but it would require only one, whereas the current rules may require three. The Senate may also seek to resolve differences with the House using amendment exchange (sometimes called "ping-pong"). Because of the availability of this option, those who may prevent the Senate from going to conference do not necessarily prevent the Senate from resolving its differences with the House. The amendment exchange process may be structured to limit the input of those opposing a conference, thus undermining their goals. Given this alternative, proposals that may expedite Senate actions necessary for conference may attract support from those who believe that amendment exchange process is even less likely to result in attention to their policy concerns. An alternative proposal aims to reduce the need to invoke cloture multiple times on the same policy proposal. Even if the Senate does not need to invoke cloture on the motion to proceed to a measure, it frequently must invoke it twice (or more) during consideration due to the application of certain principles of the amending process under cloture; specifically, it is common practice for the Senate to consider, and agree to, an amendment in the nature of a substitute to a bill that may have been proposed by a committee or offered on the floor as a policy option negotiated after the bill's introduction or pendency. Because Rule XXII prohibits non-germane amendments from being offered after cloture is invoked on a bill—and because an amendment in the nature of a substitute frequently includes provisions that are not germane to the underlying bill it seeks to amend—the Senate must invoke cloture on this substitute amendment before invoking it on the underlying bill. (Otherwise, the substitute amendment would fall as non-germane once cloture was invoked on the bill.) This means that the Senate must go through the time-consuming cloture process twice on almost all bills on which an amendment in the nature of a substitute is offered, even though the Senate is, in effect, invoking cloture twice on the same text (because if the substitute was agreed to, the second vote is on invoking cloture on the underlying bill, as fully amended by the substitute). To avoid this "double" cloture process, some have proposed allowing no debate on an underlying bill or resolution once the Senate has agreed to an amendment in the nature of a substitute. Such a change would avoid the additional floor time expended in the final cloture process, which proponents of a change deem an unnecessary use of time because the pending text of the underlying measure does not now differ from the amendment on which cloture was already invoked. As an alternative means of restricting debate in certain circumstances, some have suggested broadening the scope of Senate Rule XIX, paragraph 1, to apply its provisions to a subset of Senate business known as "executive business" (i.e., treaties and nominations). The rule says, in part, "no Senator shall speak more than twice upon any one question in debate on the same legislative day, without leave of the Senate, which shall be determined without debate." Enforcement of this limitation has generally not been useful to those seeking to bring a measure to a vote, because each Senator may make two speeches on any "question." Many such separate questions are routine when considering legislation, such as debating a first degree amendment, or a second degree amendment (to the first degree amendment), or any procedural question. Each Senator would get two speeches on each of those questions, each of unlimited length, and, therefore, a determined opposition would have numerous opportunities to block a final disposition of the matter at hand. The same is not true, however, for nominations. No amendment is in order when considering nominations, and the Senate may not attach any conditions to the confirmation of a nomination, so the number of "questions" that would arise would necessarily be more limited than during consideration of legislation. Senate precedents, however, would need to be re-interpreted in order to apply the two-speech rule to executive business. The key phrase in the rule as applied to nominations is "the same legislative day." There are several methods the Senate uses to keep track of passing time. One is a calendar day, where time is measured based on the calendar system and is not altered; one day, under this system, is a calendar day. The Senate in other contexts, however, measures time in legislative days: the time elapsed since the last adjournment (rather than recess) of the Senate. A new legislative day is triggered only by an adjournment of the Senate. When the majority leader chooses to recess the Senate from day to day, the legislative day remains the date the Senate met following the last Senate adjournment, while the calendar day continues on. It is possible, therefore, for the Senate to be meeting on the calendar day of May 20, while recording the legislative day as May 8. After an adjournment, the legislative day resets to the current calendar day, but the two only remain the same as long as the Senate continues to adjourn each day. The possibility of one legislative day spanning several calendar days can have an impact on the application of the two-speech rule, which counts time in legislative days. For example, if the Senate did not adjourn but, instead, recessed each day between January 5 and January 9 (such that all of these days remained the legislative day of January 5), any Senator who had made two speeches on January 5 on an amendment, could be prevented (on a point of order) from speaking again on the amendment during any of these subsequent days. The two-speech limitation, under Senate precedents, however, applies differently to executive business; it is a restriction only on a calendar day because a legislative day has been interpreted not to apply to executive business. So, for example, if a Senator used her two speeches on a nominee during Monday's session of the Senate, she would be entitled to two additional speeches on Tuesday, regardless of whether the Senate adjourned or recessed at the end of Monday's session. To make the two-speech rule applicable to executive business could require a change in Senate standing rules, but it possibly also could be achieved by a ruling from the chair, particularly a ruling that is subsequently endorsed by a vote of the Senate. It is not clear that this change would necessarily save the Senate time when debating a controversial nomination. If the majority leader did not have 60 votes to invoke cloture and move to a confirmation vote on a nomination, however, but decided it was worth spending potentially significant Senate floor time, the two-speech rule theoretically could provide a mechanism where a majority of the Senate could, eventually, be able to get to a final vote. The mechanics of the rule also could be difficult, such as deciding what constitutes a "speech" and how managers of the nomination on the floor for both parties would be treated (as well as the leadership, who typically speak on multiple occasions on a question), and who would keep track of the number of speeches given by each Senator on each nomination. Many Senators who support changing the operation of cloture are chiefly concerned with the level of costs associated with threatening (or of conducting) a filibuster. These Senators advocate requiring those who desire to prevent action by the Senate on a question to hold the floor and make their opposition known and even perhaps to speak to prevent final action by the Senate on the question. A recent set of proposals discussed earlier seeks to allow supporters of a matter, under certain circumstances, to move cloture much more quickly than is typical under Rule XXII. Specifically, once a cloture motion has been filed and the time for first degree amendments has passed, these proposals would allow the majority leader to move that the Senate vote on cloture if no Senator sought recognition to speak. One goal of the proposals, supporters argue, is to make those opposed to final action on a question hold the floor and speak, which might require at least some of those Senators to stay close to the floor to prevent the majority leader from using this mechanism to shorten the layover period for cloture. Under these proposals, this idea also would apply to the possible 30 hours of post-cloture debate time, but only on nominations and motions to proceed (though there is no reason that the concept could not be applied to a broader variety of questions). These proposals also envision a parliamentary scenario that would allow the presiding officer to rule out dilatory motions and quorum calls in the period after a cloture motion is filed but before its disposition. The presiding officer is already permitted such power in a post -cloture environment, pursuant to existing provisions of Rule XXII. Interpretation of such a proposal may, if adopted, rely on the large body of precedents on dilatory actions developed for post-cloture procedure and apply them to the earlier period while the cloture petition is ripening. Along the same lines are proposals designed to make it harder for opponents of a measure or matter to use routine quorum calls to use up time at any point in the process; this would be accomplished by specifically linking certain quorum calls to a so-called "snap" vote. Under current rules and precedents, if a Senator notices the absence of a quorum, the presiding officer instructs the clerk to call the roll. Typically, this is done to provide time for the next Senator who wishes to speak to reach the floor, and it routinely ends when the Senate agrees, by unanimous consent, to dispose of the call of the roll. This back and forth occurs routinely every day the Senate is in session. If the quorum call is not lifted by the time the clerk reads the last name, however, the quorum becomes a "live" one. This means that to allow the Senate to stay in session, a majority of Senators must register their presence (technically through a vote on a subsequent motion); alternatively, the Senate may adjourn. Some proposals to change the cloture rule would use this procedure to shorten the length of time spent on the layover period for a cloture motion. If any quorum call were to "go live," an automatic (presumably early) vote on invoking cloture would be triggered. Similarly, the same technique could be used to obtain a vote on the question if cloture were invoked and another quorum call was allowed to go live. Such a proposal also could be modified to say that the automatic vote would occur only after a specified number of quorum calls or after the Senate had expended a certain amount of time in quorum calls. A set of related recent proposals also seek to address these rules and practices that allow opponents of a measure or matter to delay or prevent a vote with relative ease. They propose to create an "extended debate" session, which the Senate could enter after a (less than three-fifths) majority voted to invoke cloture. During this session, Senators could prevent a vote on the main question only by talking, but not by forcing the majority to attend to keep a quorum or to vote. The proposals either limit the use of quorum calls or otherwise provide disincentives for their use, and also would allow the majority leader to postpone votes that could occur during the extended debate session, thereby forcing opponents to commit time to floor debate without necessarily requiring supporters of the measure to bear the burden of remaining in attendance responding to quorum calls. Other proposals do not focus either on changes that would require opponents of cloture to speak on the floor or on new prohibitions on opponents' use of certain motions or quorum calls. Instead, these ideas seek to increase the procedural burden borne by opponents of cloture by changing the voting threshold for cloture such that its invocation would directly depend, in part, on the number of Senators voting against it. Specifically, one recent proposal would have provided that cloture would be invoked by a simple majority as long as less than 41% of the Senate (chosen and sworn) voted against cloture, while another proposed that simple majority could invoke cloture unless two-fifths of the Senate (typically 40) or more voted against cloture. Under the current rule requiring three-fifths of Senators to invoke cloture, 41 Senators (if 100 Senators vote) can oppose and thereby prevent the invocation of cloture, even by not voting at all. Under the change proposals, 41 opponents of cloture, in one case (or 40, in the other) would need to vote to prevent its invocation; if a sufficient number of opponents do not vote, cloture is invoked as long as more Senators vote for cloture than against it. Other proposals to change the operation of cloture do not involve new or altered Senate rules on cloture, but rather, focus on more vigorous enforcement of existing rules. In addition, the use of "holds"—although not explicitly addressed by the cloture rule—is an associated practice that has been the subject of proposals to alter the operation of the cloture process. One final idea unaddressed by the previous discussion involves proposals to delay or sunset the operation of any rules changes adopted. There are a number of Senate rules and precedents which, if enforced or used differently by the Senate, could provide means to limit debate in some circumstances. The two-speech limit in Rule XIX, explained earlier, for example, could be routinely enforced during debate on legislation. If the majority leader recessed the Senate each night, instead of adjourning it, then each Senator would be limited to two speeches on the pending business before the Senate (not including executive business). There are significant hurdles to this idea, not the least of which is the enormous record-keeping task this could present for Senate floor staff as well as questions over what constitutes a "speech." In addition, each Senator gets two speeches for each question at hand, so it might lead to more complex parliamentary situations where a Senator makes repeated, different motions to obtain an additional two speeches on the underlying issue. Another tool available is the precedent that allows the presiding officer, if no Senator seeks recognition, to put the pending question to the Senate without any further consideration. Although this tool is currently used by presiding officers in some circumstances, its use could be increased. A determined opposition, of course, could counter this strategy by positioning a Senator on the floor who would be able to gain recognition to prevent the question from being put, if need be. A combination of the enhanced enforcement of the two-speech rule and the putting of the question by the chair could also be used to try and foreclose extended debate, particularly if the majority leader decided to hold extended Senate sessions, reaching into the night or perhaps overnight. This approach may require the opposition to defend its position and take to the floor from time to time to preclude a vote, but the costs of staying in session are still largely borne by the majority party, because the majority would need to be present (relatively near to the floor) to ensure a quorum is available to do business and to vote on the question, when put to the Senate. Finally, there have been proposals to require that debate and amendments be germane to the pending business before the Senate. Currently, there is no general germaneness requirement for amendments (except in the post-cloture period); debate must be germane to the measure or matter before the Senate only for the first three hours of debate each calendar day. The ability of a Senator to speak extemporaneously about anything for as long as she wants, regardless of what is pending, is a central feature of the Senate and changes to it would seem to face long odds. The Senate has usually understood holds to be notifications by Senators to their floor leaders, sometimes on a confidential basis, of an intent to object to the consideration of an item of business. Their effectiveness depends on Senate rules that place no limits on debate of most questions (absent unanimous consent or cloture). As a result, fashioning a mechanism that limits the use of holds is difficult, because even if a hold is not made public, it may represent a potential threat to filibuster an action, and for that reason may effectively deter attempts to call up or consider an item of business. Senate standing rules do not currently address the practice of holds, and regulating them does not necessarily require amendment of Rule XXII. To the extent that a hold often indicates a threat to subject a measure or matter to extended debate, however, proposals to reduce the effects of extended debate (by addressing, for example, mechanisms by which a simple or supermajority may expedite consideration) often include proposals addressing holds. In recent Congresses, the Senate has twice agreed to establish some procedures governing the use of holds, though in neither case did it amend its standing rules. In the 110 th Congress, Congress created, in statute (Section 512 of P.L. 110-81 ), that an objection on the floor by any Senator, on another Senator's behalf, to a unanimous consent request to proceed to an item of business, would under certain circumstances to trigger the identification (in a designated section of the appropriate Senate calendar and in the Congressional Record ) of the Senator on whose behalf objection was made. In the 111 th Congress, there were proposals formally submitted and informally discussed to enhance the regulation (and/or limit the effect) of holds, especially those placed confidentially (so-called secret holds). Some of the proposals were modeled on the hold directive found in P.L. 110-81 and sought to address some perceived limitations of these existing statutory provisions, but none were agreed to in the 111 th Congress. Such proposals were also introduced in the 112 th Congress or included as an element of other proposals to change the operation of cloture. One such proposal— S.Res. 28 —was adopted as a new standing order in January 2011, establishing a new process by which an objection to proceeding to a measure or matter on behalf of another Senator triggers a requirement for notice to be placed in the Record and in the designated section of the appropriate Senate calendar. In sum, to the extent that a hold on a measure by even one Senator may mean that a successful cloture process is necessary to proceed to the bill (and in some cases, also, to end debate on it and amendments to it), any efforts to limit the impact of holds should be assessed within the context of proposals to change the operation of cloture in the Senate. In recent Congresses, attention has been paid to the extent to which amending opportunities have been available during consideration of a measure. Some Senators have focused their concerns on the frequency with which the majority leader "fills the amendment tree"—that is, offers a series of amendatory motions such that opportunities for other Senators to make additional amendments pending are (at least temporarily) limited. Others have expressed concern that individual Senators have become more willing to object to unanimous consent requests that would allow more amendments to become simultaneously pending, or to otherwise constrain the ability of bill managers to negotiate packages of "cleared" amendments. These concerns can be both directly and indirectly linked to the operation of cloture. For instance, Senators concerned that amending opportunities will be limited may be inclined to oppose proceeding to the bill at all without assurances about such opportunities, thereby potentially increasing the need to use a cloture process on motions to proceed (a dynamic that is at the root of many proposals to limit debate on such motions). In addition, to the extent that negotiations over the offering of amendments often are reduced to the challenges the Senate faces in coming to a final vote on a pending question (including an amendment), proposals to make it easier to invoke cloture (or make it harder to sustain a filibuster) inherently implicate the leverage that Senators have in the floor amending process. Since the current practices surrounding the right to extended debate have been linked to the argument that amending opportunities for Senators have been limited in recent years, some proposals to change the operation of cloture have included provisions that address this aspect of Senate floor procedure. Some recent proposals on changing the operation of cloture have addressed this issue by guaranteeing to each party the ability to offer a set number of amendments; proponents of these provisions argue that such a guarantee could potentially alleviate the concerns of those Senators who now might block or seek to delay the Senate's consideration of a matter due to uncertainty over amending opportunities later. Another proposal instead would establish a non-debatable motion by which individual Senators could—with the agreement of a majority of voting Senators—be allowed to offer a germane amendment when it is otherwise not in order (due to an already-pending amendment). Proposed changes to the operation of cloture often raise concerns that one party may be more advantaged by the changes than the other, especially because they typically involve some reduction of leverage to those opposing an end to debate (in most circumstances, a group dominated by the minority party). To address this concern, many supporters propose to make changes effective at some date in the future—perhaps in a future Congress when the identity of the majority party is as yet unknown. Others have suggested instead to provide that any changes are effective for only a short period, as a way to assess any unanticipated changes that may result without binding the Senate to the changes (because rules changes, as mentioned above, tend to become entrenched). This latter approach often seems to opponents, however, to be a way of assuring any benefits of the change accrue to the present majority party while preventing their accrual to a different party in the future. Each proposal to change the operation of cloture discussed above does not necessarily require a change in Senate standing rules. For example, some rely only on changes in Senate practices, and some propose a series of steps on the Senate floor that could establish new precedents. Many proposals do, however, require a rules change. A change to Senate standing rules could be accomplished via adoption of a simple resolution making specified rules changes, though standing rules changes can also be accomplished through provisions of a statutory measure (e.g., pursuant to an amendment to legislation adopted on the floor). Once a simple resolution is on the Calendar of Business (typically after having been reported by committee), it could be brought before the Senate by unanimous consent or by a debatable motion to proceed. Once a rules change is under consideration on the Senate floor, it could be subject to extended debate; a cloture process may be necessary to end debate and allow for a final vote on adoption. As noted earlier, pursuant to changes made in 1975 to Rule XXII, cloture on a proposal to change the standing rules requires a two-thirds threshold of those present and voting. This provision makes it difficult to make changes in the standing rules of the Senate and contributes to the so-called entrenchment of Senate rules, as discussed earlier. It is again worth noting that Senate procedure is governed not only by the standing rules and the precedents interpreting them, but also by the Constitution, standing orders, the rule-making provisions of certain statutes that provide for procedures outside of the provisions of the standing rules (e.g., the Congressional Budget Act), and practice. Changes to Senate procedures accomplished through these other mechanisms—for example, through adoption of a new standing order or enactment of statutory provisions that do not amend the standing rules—do not fall under the Rule XXII requirement that cloture on a rules change obtain a two-thirds affirmative vote. These options, however, would still be subject to the lower (but still supermajority) threshold of three-fifths to end debate. Changes accomplished via a new statutory provision, of course, would also require House—and potentially presidential—approval for enactment. | Paragraph 2 of Senate Rule XXII, also known as the "cloture rule," was adopted in 1917. It established a procedure, amended several times over the intervening years, by which the Senate may limit debate and act on a pending measure or matter. Aside from unanimous consent agreements and statutory limits applying to certain types of legislation, cloture is the only mechanism by which the Senate can limit debate. In recent years, some Senators have expressed renewed concerns over the way in which extended debate is conducted in the Senate and the operation of the cloture rule. Proposals for changing the cloture process include the establishment of new precedents on amending the rules, changes in the threshold necessary to invoke cloture, reductions in the time costs associated with certain cloture-related actions, and new or additional restrictions on debate in certain circumstances. This report provides a brief history of the Senate cloture rule, explains its main features and the arguments made by supporters and opponents of these features, outlines a range of proposals to change its operation, and briefly explains the methods by which the Senate might change its rules or practices. |
The federal Lifeline program, established in 1985 by the Federal Communications Commission (FCC), assists qualifying low-income consumers to gain access to and remain on the telecommunications network. The program assists eligible individuals in paying the reoccurring monthly service charges associated with telecommunications usage. While initially designed to support traditional landline service, in 2005 the FCC expanded the program to cover either a landline or a wireless/mobile option. On March 31, 2016, the FCC adopted an Order (2016 Order or Order) to once again expand the program to make broadband an eligible service. The Lifeline program is available to eligible low-income consumers in every state, territory, commonwealth, and on tribal lands. The Universal Service Administrative Company (USAC), an independent not-for-profit corporation, established by the FCC in 1997, is the designated administrator of the Universal Service Fund (USF) and the related support programs of which the Lifeline Program is a part. USAC administers the USF programs on behalf of the FCC. As an administrative and oversight entity, USAC does not set or advocate policy, or interpret statutes, policies, or FCC rules. The Lifeline program provides a discount in most cases of up to $9.25 per month, for eligible households to help offset the costs associated with use of the telecommunications network. The program provides a subsidy for network access for one line, either a landline or wireless/mobile option, per eligible household and does not provide a subsidy for devices (i.e., handsets or customer premises equipment). The 2016 Order has expanded the scope of the program to provide subsidies for broadband adoption. The Order provides support for stand-alone mobile or fixed broadband, as well as combined bundles of voice and broadband, and sets minimum broadband and mobile voice standards for service offerings. The Order phases down and eventually eliminates support, in most cases, for stand-alone voice services. The one line per eligible household limitation and the prohibition on support for devices remain. Most providers that offer a prepaid wireless option currently offer a wireless phone to the subscriber at no charge. The cost of this device is not covered under the Lifeline program but is borne by the designated provider. Misinformation connecting the program to payment for a "free phone" has resulted in numerous queries. Yes. There are some differences in the program for those living on tribal lands. Tribal lands are defined as any federally recognized Indian Tribe's reservation, pueblo, or colony, including former reservations in Oklahoma, Alaska, Native regions, Hawaiian Home Lands, or Indian Allotments. For those providing Lifeline service to eligible consumers living on tribal lands the Lifeline program subsidy is $34.25 ($9.25 in general support plus additional support of up to $25 per month). In addition assistance programs unique to those living on tribal lands (e.g., Bureau of Indian Affairs general assistance [BIA general assistance]) may also be used to certify subscriber eligibility. Subscribers living on tribal lands are also eligible for additional assistance under the FCC's Link Up Program. This program, while established by the FCC in 1987 for the general eligible population, was restricted in 2012 solely to those residing on tribal lands. The Link Up program assists eligible subscribers to pay the costs associated with the initiation of service and provides a one-time discount of up to $100 on the initial installation/activation of the service for the primary residence. Under the program, subscribers may pay any remaining amount on a deferred schedule interest free. A subscriber may be eligible for Link Up for a second or subsequent time only when moving to a new primary residence. Link Up support is not available to all providers offering service, but only to those who are building out infrastructure on tribal lands. Therefore, eligible subscribers residing on tribal lands may receive a monthly subsidy of up to $34.25 in Lifeline support plus a one-time initiation of service discount of up to $100 for Link Up support. To participate in the program, a consumer must either have an income that is at or below 135% of the federal poverty guidelines or be enrolled in certain qualifying needs-based programs (e.g., Medicaid). USAC has an eligibility pre-screening tool available which may assist consumers in determining eligibility. Once enrolled in the program, participants are required to verify their eligibility on a yearly basis. If a program recipient becomes ineligible for the program (e.g., due to an increase in income or de-enrollment in a qualifying program) the recipient is required to contact the provider and de-enroll from the program. Failure to de-enroll can lead to penalties and/or permanent disbarment from the program. Consumers can apply for Lifeline by contacting a Lifeline program provider in his or her state or through the state-designated public service commission. To locate a state-designated provider the consumer may call USAC's toll free number (1-888-641-8722) or access USAC's website. The National Association of Regulatory Utility Commissioners (NARUC) provides a listing of contact information for state public utility commissions. The provider, selected by the enrollee, will provide a Lifeline application form, upon request, to complete. Information required includes name, address, date of birth, and the last four digits of the enrollee's social security or tribal identification number. If applying based on household income eligibility the enrollee will be required to show proof of income documentation. If applying based on program eligibility the enrollee will be required to show documentation proving program participation. (Providers are required to keep documentation demonstrating subscriber eligibility.) The provider will process the application form and enrollee information will be entered into a nationwide USAC database to verify enrollee identity and to verify that the household is not currently receiving a Lifeline program discount. The 2016 Order establishes an independent National Lifeline Eligibility Verifier (National Verifier), under the auspices of USAC, that removes the responsibility of determining Lifeline subscriber eligibility from service providers. The National Verifier will launch in six states, Colorado, Mississippi, Montana, New Mexico, Utah, and Wyoming, in December 2017, with use required for all verifications within those states by March 13, 2018. By December 31, 2018, 20 more states will join the National Verifier. By December 31, 2019, the FCC expects that all states and territories will be required to use the National Verifier to determine Lifeline eligibility. Once enrolled, participants must be recertified annually to confirm eligibility. Recertification can be done by the provider or the provider may elect for USAC to undertake the recertification on its behalf. If the provider chooses to recertify their own enrollees they may query databases that confirm that an enrollee meets program-based or income-based eligibility requirements or the provider may send the enrollee a yearly recertification letter. The letter requires the enrollee to certify that he or she is still eligible to receive the discount, and that no other household member is receiving a Lifeline discount. If no longer eligible, participants must de-enroll or will be removed from the program. Lifeline benefits are not transferable, even to other qualifying subscribers. If an enrollee is still eligible but does not meet the recertification deadline, the discount will be lost and the participant must re-enroll to regain the discount. Those enrolled under a pre-paid wireless option where there is no charge may be de-enrolled for nonusage. If the participant either does not initiate or use the service for 30 consecutive days the provider is required to automatically de-enroll the participant 15 days from notification. This gives the participant a total of 45 days in which to demonstrate usage. No. Enrollment is limited to one discount for either a landline or wireless connection, per household. A household is defined for Lifeline program eligibility as any individual, or group of individuals, who live together at the same address, that function as a single economic unit (i.e., share income and household expenses). All adult individuals (e.g., husband, wife, domestic partner, another related or unrelated adult) living at the same address that share expenses (e.g., food, living expenses) and shares income (e.g., salary, public assistance benefits, social security payments) would be considered part of a single household. If any one of these persons is enrolled in the Lifeline program no other member of that household is eligible. However it is possible that more than one household can reside in a single dwelling if they are separate economic units. Any violation of the one-per-household rule will result in de-enrollment from the program and may subject the enrollee to criminal and/or civil penalties. Providers must be certified as "eligible telecommunications carriers" to participate in the Lifeline program. That certification is given by the state or in some cases the FCC. In most cases the state public utility regulator establishes certification criteria and approves providers for participation in the program. However, for those providing service on tribal lands and in those cases where a state utility regulator does not have jurisdiction, certification is done by the FCC. A third alternative certification path for federal Lifeline Broadband Providers (LBPs), a subset of eligible telecommunications carriers, has been established as a result of the 2016 Order. Under this certification path LBP's may receive a designation from FCC staff to solely provide broadband Lifeline services to eligible subscribers and receive subsidies under the Federal Lifeline program. The LBP designation process is an alternative to the ETC process which remains in place. However, this federal designation process is currently not in use. Yes. A recipient may transfer the discount to another provider, but no more than once every 60 days for voice services and 12 months for data services. To transfer to a new provider the recipient must contact a provider that participates in the program and ask them to transfer the benefit to them. The recipient must provide selected information to verify identity (e.g., name, date of birth, address, last four digits of his or her social security number) as well as give consent acknowledging that the benefit with the previous provider will be lost and that the new provider has explained that there may not be more than one benefit per household. In most cases no service disruption should occur. Telecommunications carriers that provide interstate service and certain other providers of telecommunications services are required to contribute to the federal Universal Service Fund (USF) based on a percentage of their end-user interstate and international telecommunications revenues. These companies include wireline telephone companies, wireless telephone companies, paging service providers, and certain Voice over Internet Protocol (VoIP) providers. The USF (and its related programs including Lifeline) receives no federal monies. Some consumers may notice a "Universal Service" line item among their telephone charges. This line item appears when a company choses to recover its USF contributions directly from its subscribers. The FCC permits, but does not require, this charge to be passed on directly to subscribers. Each company makes a business decision about whether and how to assess charges to recover its universal service obligations. The charge, however, cannot exceed the amount owed to the USF by the company. No. The Lifeline program does not have a designated funding cap, or ceiling, but the 2016 Order does establish a budget-type mechanism. Funding for the Lifeline program can increase, decrease, or remain the same depending on program need as determined on a quarterly basis by USAC. According to USAC, authorized support for the Lifeline program peaked in 2012 at $2.18 billion and has continued to decline totaling $1.49 billion in 2015. The 2016 Order has established a nonbinding yearly funding ceiling of $2.25 billion, indexed to inflation. The funding ceiling for the calendar year beginning January 1, 2018, will be $2,279,250,000. The FCC has taken steps, including the following, to combat fraud, waste, and abuse in the Lifeline program: established an annual recertification requirement for participants receiving a Lifeline subsidy. The program requires those enrolled to certify, under penalty, on a yearly basis, that they are still eligible to receive the discount and that no one else in their household is receiving the Lifeline program discount; created a National Lifeline Accountability Database (NLAD) to prevent multiple carriers from receiving support for the same household; established an independent National Eligibility Verifier, under the auspices of USAC, to confirm subscriber eligibility. Prior to this the provider who received the subsidy verified subscriber eligibility; refined the list of federal programs that may be used to validate Lifeline eligibility; revised documentation retention to require providers of Lifeline service to retain documentation demonstrating subscriber eligibility; established minimum service standards for any provider that receives a Lifeline program subsidy; increased the amount and publication of program data; and undertakes enforcement actions against providers and subscribers who have broken program rules, resulting in fines and program disbarment. | The Federal Lifeline Program, established by the Federal Communications Commission (FCC) in 1985, is one of four programs supported under the Universal Service Fund. The Program was originally designed to assist eligible low-income households to subsidize the monthly service charges incurred for voice telephone usage and was limited to one fixed line per household. In 2005 the Program was modified to cover the choice between either a fixed line or a mobile/wireless option. Concern over the division between those who use and have access to broadband versus those who do not, known as the digital divide, prompted the FCC to once again modify the Lifeline program to cover access to broadband. On March 31, 2016, the FCC adopted an Order to expand the Lifeline Program to support mobile and fixed broadband Internet access services on a stand-alone basis, or with a bundled voice service. Households must meet a needs-based criteria for eligibility. The program provides assistance to only one line per household in the form of a monthly subsidy of, in most cases, $9.25. This subsidy solely covers costs associated with network access (minutes of use), not the costs associated with devices, and is given not to the subscriber, but to the household-selected service provider. This subsidy is then in turn passed on to the subscriber. The Lifeline program is available to eligible low-income consumers in every state, territory, commonwealth, and on tribal lands. |
While Section 271(a) of the Patent Act creates strict liability for someone who directly infringes a patent, Section 271(b) of the Patent Act provides indirect infringement liability for "[w]hoever actively induces infringement of a patent." This succinct and seemingly straightforward statutory text was the subject of an interpretive dispute between the parties in Global-Tech Appliances, Inc. v. SEB S.A., a 2011 Supreme Court case. Although the statutory text does not specify a scienter requirement for a person to be found liable for actively inducing patent infringement, the Supreme Court in this case inferred that "at least some intent is required" because of the presence of the adverb "actively" before "induces," which "suggests that the inducement must involve the taking of affirmative steps to bring about the desired result." However, Section 271(b) is ambiguous in that two different interpretations are possible regarding the language "induces infringement": (1) the defendant induces another party to engage in conduct that happens to amount to infringement, or (2) the defendant persuades another party to engage in conduct that the inducer knows is patent infringement. The question in Global-Tech was whether a plaintiff must show that the defendant knew that the induced acts constituted patent infringement in order to hold him liable under Section 271(b). On May 31, 2011, the Supreme Court ruled by a vote of 8-1 that induced infringement under Section 271(b) requires actual knowledge that the induced acts constitute patent infringement. In addition, the Court held that this knowledge standard could be satisfied by proof that the defendant took deliberate actions to "willfully blind" himself to the high probability of the infringing nature of the induced activities. Although the "willful blindness" doctrine is widely used by lower federal courts in criminal cases, this is the first time that the Supreme Court has applied it to a civil patent infringement case. It is also the first time that the Court has held that proof of willful blindness can satisfy a statutory requirement of knowing or willful conduct, thus establishing a standard not only for patent infringement cases brought under Section 271(b), but also for all federal criminal cases involving knowledge. This report provides a legal analysis of Global-Tech Appliances, Inc. v. SEB S.A. and discusses its potential impact on the law. The Patent Act grants patent holders the exclusive right to exclude others from making, using, offering for sale, or selling their patented invention throughout the United States, or importing the invention into the United States. Whoever performs any one of these five acts during the term of the invention's patent, without the patent holder's authorization, is liable for infringement. A patent holder may file a civil action against an alleged infringer in order to enjoin him from further infringing acts. The patent statute also provides for the award of damages "adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer." While Section 271(a) of the Patent Act creates liability for someone who directly infringes a patent, Section 271(b) of the act "extends liability to one who actively induces infringement by another." This statutory provision "codified long-standing precedent deriving from tort law that those who aid and abet direct patent infringement shall be liable for indirect infringement." Although direct patent infringement is a strict liability offense, in that the direct infringer's knowledge or intent is irrelevant—the unauthorized use of a patented invention is sufficient for liability—indirect infringement requires some element of knowledge. Thus, the elements of a Section 271(b) inducement claim include the following: (1) evidence of actual infringement of a patent by the direct infringer, (2) evidence of the defendant's "active steps ... taken to encourage direct infringement" by third parties, and (3) proof of the defendant's mental state. With respect to this third element, however, the federal courts have struggled to clearly define what mental state is necessary to support a finding of induced infringement. Two decisions from different panels of the U.S. Court of Appeals for the Federal Circuit caused this confusion. In Hewlett-Packard Co. v. Bausch & Lomb, Inc. , a panel of the Federal Circuit held that a defendant could be liable if the plaintiff could prove that the defendant actually intended to cause the acts that ultimately turned out to be patent infringement. A different panel of the Federal Circuit held in Manville Sales Corp. v. Paramount Systems, Inc. that "[i]t must be established that the defendant possessed specific intent to encourage another's infringement and not merely that the defendant had knowledge of the acts alleged to constitute inducement. The plaintiff has the burden of showing that the alleged infringer's actions induced infringing acts and that he knew or should have known his actions would induce actual infringements." An en banc Federal Circuit attempted to resolve this conflict of authority in its 2006 decision, DSU Medical Corp. v. JMS Co., Ltd., which held that to be held liable under Section 271(b),"the inducer must have an affirmative intent to cause direct infringement." The en banc court explained that, The plaintiff has the burden of showing that the alleged infringer's actions induced infringing acts and that he knew or should have known his actions would induce actual infringements. The requirement that the alleged infringer knew or should have known his actions would induce actual infringement necessarily includes the requirement that he or she knew of the patent. However, prior to its decision in Global-Tech Appliances, Inc. v. SEB S.A. , the U.S. Supreme Court had never before addressed the scope of the knowledge requirement (or even determined whether there is a requisite intent) for inducement liability under Section 271(b) of the Patent Act. SEB S.A. is a French company that manufactures home-cooking appliances and sells its products through an indirect subsidiary, T-Fal Corp. In 1991, SEB S.A. obtained a U.S. patent, No. 4,995,312, for its design of an innovative "cool-touch" deep-fat fryer for home kitchen use that incorporated a plastic outer shell surrounding a metal frying pot. After obtaining the patent, the company sold it in the United States under its T-Fal brand and enjoyed commercial success with the product. In 1997, the U.S. company Sunbeam Products (a competitor of SEB) requested that Pentalpha Enterprises (a Hong Kong corporation and wholly owned subsidiary of Global-Tech Appliances, Inc.) develop and supply it with deep-fat fryers that Sunbeam planned to sell in the United States. In developing its fryer, Pentalpha purchased an SEB deep fryer in Hong Kong and copied its "cool touch" design. Because the SEB fryer that Pentalpha bought had been made for sale in Hong Kong, it did not bear any U.S. patent markings. Pentalpha also hired a U.S. patent attorney to conduct a "right-to-use" study regarding its deep fryer; Pentalpha did not, however, inform the attorney that it had copied everything but the cosmetic features of an SEB deep fryer. The attorney failed to locate SEB's patent in the course of his investigation and issued an opinion letter stating that Pentalpha's deep fryer did not infringe any U.S. patents he had found and analyzed. Pentalpha then sold the deep fryers to Sunbeam, which resold them in the U.S. market under its trademarks, "Oster" and "Sunbeam." Because Sunbeam had obtained the deep fryers from a manufacturer that had lower production costs than SEB, Sunbeam was able to offer the appliance to U.S. customers at a lower price than SEB. In March 1998, SEB sued Sunbeam, alleging that its sales of the fryer infringed SEB's patent. A month later, Sunbeam notified Pentalpha of the lawsuit. SEB reached a settlement with Sunbeam in which Sunbeam agreed to pay SEB $2 million. Even after being informed of the patent infringement lawsuit against Sunbeam, Pentalpha continued to sell the deep fryers to other resellers, including Fingerhut Corp. and Montgomery Ward & Co. SEB then filed a lawsuit in the U.S. District Court for the Southern District of New York against Pentalpha for direct infringement of its patent as well as for actively inducing Sunbeam, Fingerhut, and Montgomery Ward to sell or to offer to sell Pentalpha's deep fryers in violation of SEB's patent rights. On April 21, 2006, the jury found Pentalpha guilty on both infringement claims because it had willfully infringed SEB's patent and induced others to infringe the patent. The jury awarded SEB $4.65 million as a reasonable royalty. Pentalpha then filed a variety of post-trial motions, including one in which it asked the district court to reduce the damages award by $2 million to account for Sunbeam's settlement with SEB. The court agreed to this reduction, but also approved SEB's request for enhanced damages and an award of attorneys' fees due to the jury's finding that Pentalpha's infringement had been willful. Pentalpha also filed a motion seeking a new trial or judgment as a matter of law because Pentalpha believed that SEB did not adequately prove inducement under 35 U.S.C. Section 271(b). Pentalpha argued that because it did not actually know of SEB's patent until it had received notice of the lawsuit against Sunbeam, the jury erred in finding Pentalpha liable for actively inducing infringement during the time it was selling its deep fryers to Sunbeam. The district court rejected Pentalpha's argument and upheld the jury's finding of inducement liability under Section 271(b). Pentalpha appealed the decision to the U.S. Court of Appeals for the Federal Circuit. On appeal, a panel of the Federal Circuit affirmed the district court's judgment on February 5, 2010. The appellate court first explained that its decision in DSU Medical Corp. v. JMS Co., Ltd . had established the intent necessary to support a finding of induced infringement under Section 271(b): "the plaintiff must show that the alleged infringer knew or should have known that his actions would induce actual infringements." The court observed, however, that the en banc Federal Circuit's opinion in DSU Medical Corp. had not "set out the metes and bounds of the knowledge-of-the-patent requirement," nor did it "address the scope of the knowledge requirement for intent ." The court stated that "a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit." Elaborating upon this point, the court ruled that constructive knowledge of the patent could be shown by proof of the defendant's "deliberate indifference of a known risk" that an infringement of a patent may occur. The Federal Circuit acknowledged that there was no direct evidence in the record to show that Pentalpha actually knew of SEB's patent before being informed of the Sunbeam lawsuit. However, applying its newly articulated intent standard for Section 271(b) to the facts of the case, the court found in the record "adequate evidence to support a conclusion that Pentalpha deliberately disregarded a known risk that SEB had a protective patent." Such evidence included, among other things, Pentalpha's failure to inform the patent lawyer it had hired to conduct a patent search that it had copied SEB's fryer design. According to the Federal Circuit, the deliberate indifference to an overt risk that a patent exists "is not different from actual knowledge, but is a form of actual knowledge." Pentalpha and Global-Tech (its parent company) petitioned the U.S. Supreme Court for writ of certiorari on June 23, 2010. The Supreme Court accepted the petition on October 12, 2010. On May 31, 2011, in an 8-1 decision, the Supreme Court affirmed the Federal Circuit's ruling that Pentalpha was liable for inducing infringement of SEB's patent. However, the Court rejected the Federal Circuit's "deliberate indifference" standard for proving intent under Section 271(b) in the absence of proof of actual knowledge of the existence of a patent; instead, the Court adopted a higher standard, borrowing the concept of "willful blindness" from criminal law. Justice Alito, author of the majority opinion, first explained that the text of Section 271(b) is inconclusive with respect to the question presented in the case: whether a party who "actively induces infringement of a patent" under 35 U.S.C. Section 271(b) must know that the induced acts constitute patent infringement. As a threshold matter, the Court noted that "[a]lthough the text of §271(b) makes no mention of intent, we infer that at least some intent is required" for liability to attach. Such an inference was based on dictionary definitions of "induce" and "actively" that imply an intent to bring about a particular result, the Court noted. The Court then observed that there are two possible interpretations of the statutory phrase "induces infringement": 1. [T]his provision [of §271(b)] may require merely that the inducer lead another to engage in conduct that happens to amount to infringement, i.e., the making, using, offering to sell, selling, or importing of a patented invention. 2. [It] may also be read to mean that the inducer must persuade another to engage in conduct that the infringer knows is infringement. To resolve this ambiguity in the statutory text, the Court relied on an examination of the legislative history of the Patent Act of 1952 as well as case law, specifically its 1964 opinion, Aro Mfg. Co. v. Convertible Top Replacement Co. ("Aro II"). Justice Alito determined that the Aro II decision "resolves the question in this case." Aro II concerned the requisite state of mind under Section 271(c), which was enacted at the same time as Section 271(b) and shares a "common origin" in contributory infringement case law. Section 271(c) provides that "[w]hoever offers to sell or sells ... a component of a patented [invention] ..., constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent ... shall be liable as a contributory infringer." Justice Alito noted that Section 271(c) contains the same ambiguity as the language in Section 271(b), in that the italicized phrase above may be read in either of two ways: (1) requiring a violator to know that the component is "especially adapted for use" in a product that happens to infringe a patent, or (2) requiring, in addition, knowledge of the existence of the patent that is infringed. He explained that "a badly fractured" Aro II Court voted 5-4 in favor of the second interpretation, that knowledge of the patent was required. Justice Alito also observed that Congress had not changed Section 271(c)'s intent requirement in the decades since Aro II and he specifically mentioned the "special force" of the doctrine of stare decisis for matters of statutory interpretation . Given that the language of the two provisions [Section 271(b) and Section 271(c)] "creates the same difficult interpretative choice," the majority opinion stated that "[i]t would thus be strange to hold that knowledge of the relevant patent is needed under § 271(c) but not under § 271(b)." Therefore, the Court held that induced infringement under Section 271(b) requires knowledge that the induced acts constitute patent infringement. Next, the Court ruled that the Federal Circuit was erroneous in holding that a "deliberate indifference to a known risk that a patent exists" would satisfy this knowledge requirement. The Court explained that the Federal Circuit's standard contained two flaws: First, it permits a finding of knowledge when there is merely a "known risk" that the induced acts are infringing. Second, in demanding only "deliberate indifference" to that risk, the Federal Circuit's test does not require active efforts by an inducer to avoid knowing about the infringing nature of the activities. Instead of the Federal Circuit's "deliberate indifference" standard, the Supreme Court decided that the more appropriate standard for Section 271(b) inducement cases that lack direct evidence of the accused inducer's actual knowledge of a patent is "willful blindness." Justice Alito noted that the doctrine of willful blindness is used widely within the federal judiciary in criminal law cases involving criminal statutes that require proof that a defendant acted knowingly or willfully, in order to hold defendants accountable so that they "cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances." He also explained that "persons who know enough to blind themselves to direct proof of critical facts in effect have actual knowledge of those facts." To supports its claim that willful blindness can substitute for a statutory requirement of knowledge, the majority opinion relied on opinions from the federal courts of appeals that applied the willful blindness doctrine in criminal matters. The Court stated that "we can see no reason why the doctrine should not apply in civil lawsuits for induced patent infringement under 35 U.S.C. § 271(b)." The Court described a two-part test for the willful blindness doctrine: 1. The defendant must subjectively believe that there is a high probability that a fact exists. 2. The defendant must take deliberate actions to avoid learning of that fact. The Court believed that these two requirements of the willful blindness doctrine provide "an appropriately limited scope that surpasses recklessness and negligence." The differences between these three standards, according to the Court, are as follows: "[A] willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts." "[A] reckless defendant is one who merely knows of a substantial and unjustified risk of such wrongdoing." "[A] negligent defendant is one who should have known of a similar risk but, in fact, did not." Finally, the Court affirmed the Federal Circuit's finding of inducement liability for Pentalpha because it determined that the evidence in the case led to that same conclusion under the Court's new "willful blindness" test: "Taken together, this evidence was more than sufficient for a jury to find that Pentalpha subjectively believed there was a high probability that SEB's fryer was patented, that Pentalpha took deliberate steps to avoid knowing that fact, and that it therefore willfully blinded itself to the infringing nature of Sunbeam's sales." In lone dissent, Justice Kennedy agreed with the majority opinion's first holding that in order to hold a defendant liable for inducing infringement under Section 271(b), the defendant must know that the induced acts constitute patent infringement. However, he disagreed with the Court's second significant holding, that "willful blindness will suffice" for the statutory requirement of knowledge. He criticized the majority opinion for failing to cite any Supreme Court precedent for the specific proposition that willful blindness can substitute for a statutory requirement of knowledge, relying instead on precedent from the courts of appeals. He insisted that "[w]illful blindness is not knowledge" and opined that "judges should not broaden a legislative proscription by analogy." He faulted the Court's willful blindness test for its potential to cause the following problem: One can believe that there is a "high probability" that acts might infringe a patent but nonetheless conclude they do not infringe. The alleged inducer who believes a device is noninfringing cannot be said to know otherwise. Finally, Justice Kennedy criticized the Court for "endors[ing] the willful blindness doctrine here for all federal criminal cases involving knowledge ... in a civil case where it has received no briefing or argument from the criminal defense bar, which might have provided important counsel on this difficult issue." The Supreme Court in Global-Tech held that Section 271(b) requires specific intent to induce acts that constitute patent infringement. However, the alleged inducer's actual knowledge of the patent is not necessarily required, as the knowledge requirement may be satisfied by the "willful blindness" doctrine. This standard is stricter than the Federal Circuit's "deliberate indifference" standard for establishing inducement of infringement that would have allowed a finding of knowledge when there is only a "known risk" that the induced acts infringe a patent. Thus, the Court has raised the bar for proving that a defendant is liable for actively inducing infringement of a patent under Section 271(b). In addition, as Justice Kennedy noted in his dissent, the Court's opinion not only impacts patent law, but it also appears to apply to federal cases that involve criminal statutes with knowledge requirements. One observer praised the Court's decision by saying that the Court's "willful blindness" rule "is truly narrow, limited to cases like this one with particularly bad facts showing that the defendant almost certainly knew they were infringing on the plaintiff's patent." Another commentator believed that the ruling "will eliminate a lot of the ambiguity in the Federal Circuit's 'deliberate indifference' standard." Several questions remain following Global-Tech. The Court did not decide whether a defendant's "willful blindness" may extend to the induced acts that constitute infringement (as opposed to being willfully blind to the existence of the patent), as the question was not at issue in the case because "Pentalpha was indisputably aware that its customers were selling its products" in the United States. Another unresolved matter is whether "knowledge of the patent" means knowledge of a specific patent, or knowledge of the high probability that a patent exists. These questions remain left to be resolved by future litigation or by Congress. | While Section 271(a) of the Patent Act (35 U.S.C. § 271(a)) creates liability for someone who directly infringes a patent (by the unauthorized use of a patented invention), Section 271(b) of the act provides indirect infringement liability for someone who "actively induces" another party to engage in infringing activities. "Inducement" is a theory of indirect patent infringement, in which a party causes, encourages, influences, or aids and abets another's direct infringement of a patent. In Global-Tech Appliances, Inc. v. SEB S.A., the question was the legal standard for the mental state necessary for a defendant to be liable for actively inducing infringement under Section 271(b). The U.S. Court of Appeals for the Federal Circuit had ruled that a plaintiff may hold a defendant liable for induced patent infringement by showing that the defendant had a "deliberate indifference of a known risk" that the induced acts may violate an existing patent. On May 31, 2011, the Supreme Court rejected the Federal Circuit's "deliberate indifference" standard. By a vote of 8-1, the Court ruled that induced infringement under Section 271(b) requires actual knowledge that the induced acts constitute patent infringement. However, in a somewhat surprising step, the Court declared that this statutory knowledge requirement could be satisfied by proof of the accused inducer's "willful blindness" (that is, the defendant subjectively believes there is a high probability that a patent exists and takes deliberate actions to avoid learning of that fact). This is the first time that the Supreme Court has applied "willful blindness," a criminal law doctrine, to a civil patent infringement case. It is also the first time that the Court has held that proof of willful blindness can substitute for actual knowledge, thus establishing a standard not only for patent infringement cases brought under Section 271(b), but also potentially for all federal criminal cases involving knowledge. |
Members of Congress have demonstrated an ongoing interest in annual U.S. contributions to the United Nations (U.N.) regular budget, which funds core activities for U.N. organs such as the General Assembly and Security Council, staffing and administration at U.N. headquarters, international conferences, human rights promotion, and U.N. special political missions, among other things. Over the years, Congress has focused on the overall cost of the U.S. assessment to the regular budget per year, as well as any outstanding contributions; how the United States assessment compares to the assessments of other U.N. member states; and how the United States' payment of its assessed contributions over time compares with other U.N. member states. In 2010—the last calendar year for which data are publicly available—the United States was the single largest contributor to the regular budget, paying $532,435,102, or 22%, in assessed contributions. The next largest contributors were Japan (12.530%), Germany (8.018%), the United Kingdom (6.604%), and France (6.123%). Seventeen countries, including the United States, were assessed at over 1%, representing about 83% of the total regular budget. Ten countries were assessed between 0.5% and 1%, accounting for about 7% of the budget. The rest of the U.N. membership (167 countries) accounted for about 8% of the regular budget. This report highlights, for each of the past 20 years, payments and the total outstanding contributions of the top contributors to the U.N. regular budget—including the United States. For additional information on U.S. funding of the U.N. system, see CRS Report RL33611, United Nations System Funding: Congressional Issues , by [author name scrubbed]. The enclosed tables list the assessment level, actual payment, and contributions outstanding of key contributors to the U.N. regular budget from calendar years 1990 through 2010. Most countries pay their assessment in full during the calendar year. Other countries, however, (including Argentina, Brazil, Ukraine, USSR/Russian Federation, and the United States) have on occasion failed to pay the entire assessment and maintained unpaid or outstanding contribution balances. Consequently, the annual payments listed may not always match the assessment for any given year. Each table is divided into four columns, described below. Countries —Contributing countries are grouped into key categories: (1) the "United States"; (2) "Other Major Contributors," which are countries assessed at more than 1%; (3) "Middle Contributors," a new category created in 2004 that provides data on nations that are assessed at 0.5% and over but less than 1%; and (4) "Rest of Membership," which lists overall contributions from the remaining member states. Assessment —The percentage of the U.N. regular budget at which a country is assessed. Payment —Country payments to the U.N. regular budget that have been received and duly recorded as of December 31 of each calendar year (assessed contributions received after that date are reported in the next statement on the status of contributions). Contributions Outstanding —Total outstanding contributions represent money owed by a country as of December 31 of that year. It includes both current year and prior year contributions outstanding. Four of the five permanent U.N. Security Council members are identified in each table, and information on the fifth permanent Council member, China, is provided in a footnote. China is included among the major contributors starting in 2001, when its assessment level first exceeded 1%. | The United States is the single largest contributor to the United Nations (U.N.) regular budget. As such, Members of the 113th Congress will likely continue to demonstrate an interest in the United States' assessment level, the cost of the U.S. assessment each year, how U.S. contributions to the regular budget compare to those of other countries, and how assessment levels have changed over time. This report provides the assessment level, actual payment, and total outstanding contributions for the United States and other selected U.N. member states from 1990 to 2010—the last year for which data are publicly available. In 2010, the United States was assessed to pay 22% (or $532,435,102) of the regular budget. The next largest contributors were Japan (12.53%), Germany (8.018%), the United Kingdom (6.604%), and France (6.112%). This report is updated annually, or as the U.N. document upon which the data are based is published. |
Published on May 23, 2018
Milwaukee Police Chief Alfonso Morales apologized to Bucks guard Sterling Brown for officers' actions during a January arrest that included use of a stun gun, and said some officers had been disciplined. Bodycam footage shows the encounter. (May 23)
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https://twitter.com/AP ||||| My experience in January with the Milwaukee Police Department was wrong and shouldn’t happen to anybody. What should have been a simple parking ticket turned into an attempt at police intimidation, followed by the unlawful use of physical force, including being handcuffed and tased, and then unlawfully booked. This experience with the Milwaukee Police Department has forced me to stand up and tell my story so that I can help prevent these injustices from happening in the future.
Situations like mine and worse happen every day in the black community. Being a voice and a face for people who won’t be heard and don’t have the same platform as I have is a responsibility I take seriously. I am speaking for Dontre Hamilton of Milwaukee, Laquan McDonald of Chicago, Stephon Clark of Sacramento, Eric Garner of New York, and the list goes on. These people aren’t able to speak anymore because of unjust actions by those who are supposed to “serve and protect” the people.
The common denominator in all of these situations has been racism towards the minority community, the abuse of power, and the lack of accountability for officers involved. The lack of repercussions for the police officers involved in so many of these cases is offensive. This is a slap in the face to the victims’ families and communities.
Black men shouldn’t have to have their guard up and instantly be on the defensive when seeing a police officer, but it’s our reality and a real problem. There must be mutual respect and both sides have to figure out how to accomplish this.
There are no easy solutions to this problem, but there are strides that can be made to create change. I will do my part in helping to prevent similar incidents from happening to the minority community in the future.
This is bigger than me. My family, friends, legal team, Priority Sports, Milwaukee Bucks, the black community and the communities of all who stand against injustice plan to continue the fight. Peaceful support to ensure no further damage to our community is the only way to respond. I know many of you will share my anger and frustration, but for our community to progress and grow, we need to build on what we already have and not destroy it. I will take legal action against the Milwaukee Police Department to continue forcing change in our community. ||||| CLOSE Milwaukee Bucks guard Sterling Brown, was confronted by a Milwaukee Police officer January 26 for a parking violation. He was tased and arrested. Milwaukee Police Department
Body Worn Camera Video Release of Sterling Brown Arrest (Photo: Milwaukee Police)
Milwaukee police were confrontational from the start of their January interaction with Milwaukee Bucks rookie Sterling Brown, who was thrown to the pavement and tased over a parking violation, body camera video shows.
Department members "acted inappropriately" and have been disciplined, Milwaukee Police Chief Alfonso Morales said at a news conference Wednesday.
"I am sorry this incident escalated to this level," he said.
The video shows the situation getting progressively worse after an officer who was doing a business check at a Walgreens near West National Avenue and South 26th Street stopped to question Brown about a parking violation about 2 a.m.
Milwaukee Police Chief Alfonso Morales speaks with the media about the release the body camera footage of the arrest of Bucks player Sterling Brown. (Photo: Rick Wood / Milwaukee Journal Sentinel)
Brown initially gave his name and showed an identification card. The officer apparently did not recognize him as a player with the Bucks. The officer called for assistance. Half a dozen squad cars showed up. Eight officers ended up on the scene; three were disciplined.
After the additional officers arrived, the situation became more tense, with police standing in a circle around Brown and using profane language before yelling at him to take his hands out of his pockets — now.
Brown, who had taken his hands in and out of his pockets several times before that, replied: "Hold on. I've got stuff in my hands."
Sterling Brown (23) and Jabari Parker (12) battle for a rebound against Ante Zizic of the Cleveland Cavaliers' in a game March 19 in Cleveland. (Photo: Tony Dejak, Associated Press)
Police swarmed him, shouting "Taser! Taser! Taser!" Brown yelled in pain as he was shocked.
The officer who first encountered Brown continued to be antagonistic after Brown had been tased — and after he realized Brown was a professional athlete.
"Sorry, I don't follow the Bucks. I didn't recognize you. I didn't recognize your famous name," the officer said sarcastically.
"No, it ain't famous. It's legit," Brown said.
He added: "You could have talked. You didn't have to touch. You initiated."
"Look me up," Brown said at one point, "Look me up."
The officer shot back: "I don't know how to do that. So why don't you tell me? You been to Mars? You been to Venus? You been to the moon?"
RELATED: Milwaukee Bucks rookie Sterling Brown plans to file suit against cops who tased him
RELATED: What you need to know about Milwaukee police body cameras
The officer later told another cop Brown was to blame for what happened.
"If the guy hadn't been such a dick it would have just been, 'Hey, have a nice day.' You know. But then I thought OK, he's being an ass, he's trying to hide something," the officer said.
Brown's arrest did not result in criminal charges, and he played in a game later that day with bruises and marks on his face.
Supervisors disciplined
Morales did not name the officers involved, nor did he say what discipline was handed down. Sources have told the Journal Sentinel two sergeants, Jeffrey S. Krueger and Sean A. Mahnke, were among those who received discipline.
Krueger was promoted to a sergeant last year. He was one of dozens of officers named in a series of federal civil rights lawsuits alleging illegal body and cavity searches by Milwaukee police. He was not characterized as a ringleader and was dismissed from at least one of those suits.
RELATED: Police Tasers: How do they work? What are the risks?
RELATED: Who is Sterling Brown of the Milwaukee Bucks?
Last year, Krueger received a merit award after he and two officers arrested a shooting suspect. He joined the Milwaukee Police Department in 2006 and received about $104,000 in pay, including about $15,000 in overtime, last year.
Mahnke joined the department in 2006 and was paid about $105,000 last year, including nearly $17,000 in overtime pay. Mahnke was praised by the department in 2012 after he got a confession from a teen shooting suspect who fled from a house party.
'Abuse and intimidation'
After the video was released, Brown issued a statement on Twitter that said such situations and worse happen every day in the black community.
"This experience with the Milwaukee Police Department has forced me to stand up and tell my story so that I can help prevent these injustices from happening in the future," he said.
He added: "Black men shouldn't have to have their guard up and instantly be on the defensive when seeing a police officer, but it's our reality and a real problem. There must be mutual respect and both sides have to figure out how to accomplish this."
Brown is planning to file a civil rights lawsuit against the Police Department. He is represented by attorney Mark Thomsen of Gingras, Cates & Wachs.
In a statement, the Bucks said, in part: "The abuse and intimidation that Sterling experienced at the hands of Milwaukee police was shameful and inexcusable."
Bucks Organization Statement On Sterling Brown: https://t.co/W8prv5B4II — Milwaukee Bucks (@Bucks) May 23, 2018
Markasa Tucker, director of the African American Roundtable, called for the officers involved in the arrest to be fired and spoke of past instances of police misconduct.
"Sterling Brown's case should not have been the only one that's bringing attention to what's been happening in Milwaukee forever," she said.
"If we're talking about moving in a new direction, we need to see that new direction as well."
Morales took over as police chief in February after the retirement of Police Chief Edward Flynn and weeks after Brown's arrest. He has pledged to rebuild trust between the police and the community and to address violent crime.
He has also pledged transparency but did not take questions from reporters at his news conference.
City officials react
Milwaukee Mayor Tom Barrett has called the video "disturbing."
"As a human being, I am offended by what I saw on the video," Barrett said Wednesday. "As mayor, I am committed to improving police-community relations."
He also apologized to Brown.
Council President Ashanti Hamilton said the situation "shouldn't have ended up in the person being tased, handcuffed, arrested and taken to jail."
"I don’t want to debate the humanity of my community anymore," Hamilton said Wednesday.
"I don’t want to debate the humanity of black males ... and then the slightest thing that you can find that they did wrong, and use that as a justification for the actions that’s used against them. That can’t be a debate in this country anymore."
Ald. Milele Coggs said she expects the video to spark potential change in police training and policy so that "situations like what people will see in this video don’t happen again."
The Milwaukee Police Association, the union representing rank-and-file officers, called for support of the city's police force and said use of force is "always dictated" by the person responding to the officer.
"Use of force will never look pretty, but it is, unfortunately, a necessary component of policing," the union said in a Facebook post, adding: "Inevitably every use of force will be scrutinized and often opinion gets in the way of fact."
Daniel Bice of the Journal Sentinel staff contributed to this report.
Correction: An earlier version of this story used the 2016 salary totals for the disciplined officers, instead of 2017.
Read or Share this story: https://jsonl.in/2x7q1an ||||| Milwaukee Police Disciplined For Using Stun Gun On, Arresting NBA Player
MilwaukeePolice YouTube
Milwaukee police have released bodycam footage showing officers using a stun gun on Milwaukee Bucks rookie Sterling Brown in a Walgreens parking lot in January.
The officers arrested Brown, who is black, after challenging him over a parking violation. Brown was not charged with a crime.
toggle caption Nam Y. Huh/AP
Shortly after the Jan. 26 arrest, a "law enforcement source" told radio station News/TAlk 1130 WISN that Brown had been "combative."
But in a statement on Wednesday, Milwaukee Police Chief Alfonso Morales said the department had "conducted an investigation into the incident which revealed members acted inappropriately and those members were recently disciplined."
"I am sorry this incident escalated to this level," Morales wrote.
Brown, a 6-foot-6 guard who graduated from Southern Methodist University last year, released a response to the video that was posted on local TV station WTMJ:
"The common denominator in all of these situations has been racism towards the minority community, the abuse of power, and the lack of accountability for officers involved. The lack of repercussions for the police officers involved in so many of these cases is offensive. This is a slap in the face to the victims' families and communities."
National Milwaukee Basketball Player Expected To Sue Police After Being Hit With Stun Gun Milwaukee Basketball Player Expected To Sue Police After Being Hit With Stun Gun Listen · 2:04 2:04
The Bucks released a statement calling for more accountability:
"Incidents like this remind us of the injustices that persist. As an organization, we will support Sterling and build on our work with local leaders and organizations to foster safe neighborhoods and better our community."
Maayan Silver of member station WUWM reports that Brown plans to file a lawsuit against the city.
High-profile incidents of police violence against unarmed black Americans repeatedly have prompted mourning, protests and attempts at reform. Meanwhile the underlying pattern continues: Black people, particularly young black men, are significantly more likely to be shot or killed by police than are white people, a difference that cannot be explained by crime rates or threat levels.
That's a national phenomenon. But as NPR's Code Switch team has reported, "there is no state where that disparity is larger than in Wisconsin."
The state "incarcerates a higher percentage of its black male population than any other in the country — and it's not even particularly close," NPR's Gene Demby writes.
Wisconsin — Milwaukee in particular — is one of the worst places in the country for African-Americans to live, as measured by a number of factors, including education gaps, incarceration and segregation.
Police in Milwaukee are being sued for what the ACLU calls a pattern of baseless, unconstitutional police stops targeting black and Latino men — more than 350,00o stops in total, the organization alleges.
And the police department previously has been challenged over its practice of keeping investigations of fatal police shootings within the officers' own departments, a practice that was changed several years ago.
In short, the police department in Milwaukee was already under community scrutiny for its treatment of black residents, long before officers approached Brown in that Walgreens parking lot.
Before the video was released on Wednesday, local officials were bracing for a backlash. On Monday, Mayor Tom Barrett told reporters he had seen the video and found it troubling.
"I have the same concerns that I have heard the chief mention about the actions of some of the people involved in that," he told reporters. "I'm going to let the release of that speak for itself, but yes, I definitely have concerns after watching that video." | Milwaukee Mayor Tom Barrett has apologized to NBA player Sterling Brown for the "disturbing" way police treated him in a video released Wednesday. Police body-camera footage of the Jan. 26 arrest shows an officer becoming confrontational after finding the Milwaukee Bucks rookie's vehicle parked across two spots reserved for disabled drivers outside a Walgreen's around 2am, the Washington Post reports. Six more squad cars turn up at the scene after the officer requests assistance. Officers surround Brown, who is Tasered after police yell at him to take his hands out of his pockets. Brown, then 22, was arrested but not charged. Scratches could be seen on his face in a game later that day. Milwaukee Police Chief Alfonso Morales said Wednesday that the officers involved "acted inappropriately" and had been disciplined, the Milwaukee Journal-Sentinel reports. The Bucks described the "abuse and intimidation" Brown suffered as "shameful and inexcusable." Brown plans a civil rights lawsuit. "What should have been a simple parking ticket turned into an attempt at police intimidation, followed by the unlawful use of physical force, including being handcuffed and tased, and then unlawfully booked," he said in a statement after the video was released, vowing to help "prevent similar incidents from happening to the minority community in the future." NPR notes that the Milwaukee police department was already being sued for alleged mistreatment of black residents. |
When Lynne Schultz first heard that her oldest child, Scout, had been shot and killed by a Georgia Tech police officer late Saturday night, she assumed it occurred at a protest rally.
Scout, she says, was politically active in progressive causes. Scout, a brilliant student despite numerous medical issues, suffered from depression and had attempted suicide two years ago, Lynne Schultz said.
According to Georgia Tech police, Scout was seen walking toward police and ignored numerous orders to drop what appeared to be a pocket knife. Photos of the knife taken at the scene reveal the blade was not extended.
Related: Georgia Tech student dies after shooting on campus
Photos: Scene at fatal shooting of Georgia Tech student
Video of the incident showed Scout, 21, shouting “Shoot me!” to the four officers on the scene. A minute later, one of them did.
“Why didn’t they use some nonlethal force, like pepper spray or Tasers?” Lynne Schultz told The Atlanta Journal-Constitution on Sunday.
That’s among the questions the GBI will be asking as the state agency investigates the shooting.
A Georgia Tech student was shot by police in an incident on the campus late Saturday night. (Photos by Dalton Touchberry / www.daltontouch.com)
Police said the shooting was prompted when Scout Schultz failed to comply with their repeated commands to drop the knife.
Chris Stewart, the attorney for the student’s parents, said it appears the officer who shot Scout overreacted.
“I think (Scout) was having a mental breakdown and didn’t know what to do,” said Stewart, who wondered why nonlethal force wasn’t used. “The area was secured. There was no one around at risk.”
Scout Schultz was shot in the heart and was pronounced dead 30 minutes later at Grady Memorial Hospital, Lynne Schultz said.
Two years ago, Scout attempted suicide by hanging, the student’s mother said.
Stewart said he doesn’t believe Scout was attempting “suicide by cop.”
RELATED: How Atlanta police handle calls involving mentally ill
Scout was majoring in computer engineering and was already taking courses for a master’s degree in biomedical engineering, with plans to design biomedical devices for a living.
Scout identified as non-binary, meaning neither male nor female, Lynne Schultz said. The accepted pronoun for non-binary individuals is “they.”
Most of Scout’s stress was related to school, the student’s mother said.
“Scout was always a perfectionist,” Lynne Schultz said. “They always worried he was going to fail a test but got all A’s and only two B’s at Tech.”
“(Scout) had a lot of empathy for people, active in a lot of causes. And very smart. Scary smart, really.”
A more complete story will appear later today on myAJC.com. ||||| This collection contains content included in or referenced by the Georgia Institute of Technology's web presence. The materials in the collection document the teaching, research, cultures, and communities of Georgia Tech. ||||| by: Steve Gehlbach, Matt Johnson, Nefertiti Jaquez Updated: Sep 18, 2017 - 11:48 AM
ATLANTA - Update: Parents of Scout held a news conference Monday where they asked the Georgia Tech police why they had to kill their child.
----------
The Georgia Bureau of Investigation is handling the case of an officer-involved shooting that happened on the campus of Georgia Tech.
According to the GBI, the Georgia Tech Police Department responded to a 911 call about a person with a knife and gun in the area of Eighth Street on the campus at about 11 p.m. Saturday.
Officers arrived and found Scott Schultz, 21, armed with a knife outside a Georgia Tech dormitory.
Schultz was not cooperative and would not comply with officers' commands to drop the knife, the GBI said. They said Schultz approached the officers, despite continuous commands. Scout Shultz served as president of the Georgia Tech Pride Alliance GT Progressive Student Alliance
The GBI said that is when one of the officers shot Schultz.
Schultz was taken to Grady Memorial Hospital and later died, the GBI said.
Schultz's family is speaking about the incident at a law firm in Atlanta Monday.
We have a reporter and photographer at the news conference for live reports on Channel 2 Action News at Noon.
Georgia Tech released a statement Sunday morning, saying Schultz was a four-year computer engineering student from Lilburn.
Schultz was a leader in the LGBT pride community on campus was known as "Scout." The student-activist served as the president of the Pride Alliance on Georgia Tech's campus. Schultz's profile on the Pride Alliance website states "I'm bisexual, non-binary and intersex," adding "they" and "their" as the appropriate pronouns to address Schultz instead of "he" or "she." The profile also states Schultz enjoyed playing the role-playing game "Dungeons and Dragons" and is politically active.
In a statement from the Pride Alliance's board, Schultz is remembered as a driving force behind the group.
As you might have heard, last night we lost our President, Scout Schultz. We are all deeply saddened by what has occurred. They have been the driving force behind Pride Alliance for the past two years. They pushed us to do more events and a larger variety events, and we would not be the organization we are known as without their constant hard work and dedication. Their leadership allowed us to create change across campus and in the Atlanta community. Scout always reminded us to think critically about the intersection of identities and how a multitude of factors play into one's experience on Tech's campus and beyond. We love you Scout and we will continue to push for change. With love,
Pride Alliance
A vigil will be held to honor Schultz's life at 8 p.m. Monday at the Georgia Tech Campanile.
In an exclusive interview with our partners at the Atlanta-Journal Constitution, Scout's mother Lynne says her oldest child was active in progressive causes and was a brilliant student despite having medical problems.
She told the paper, "(Scout) suffered from depression and attempted suicide two years ago."
Channel 2 Action News was at the scene when the knife Schultz was suspected of holding was still on the ground.
It appeared to be a metal, flip-open, multitool knife that would likely include a small blade.
"I mean things happen off campus, but it's kind of shaking for it to happen right so close to home," one student said.
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Several of the students nearby did see the incident, and two who recorded it on their cellphones shared video of the incident with Channel 2 Action News.
One video shows the tense moments as Georgia Tech police officers confront what looks like a barefooted person holding something in their right hand.
The person yells at police to shoot.
"Shoot me!” they yell.
Police yell back: “Drop the knife! Drop the knife!"
Officers can be heard repeating the command more than a dozen times.
"Nobody wants to hurt you man. Drop the knife," an officer says.
Another angle from further away shows three officers in front and another off to Schultz's left, at the entrance to Curran parking deck.
It pans away to show another officer walking up from behind as you hear only one gunshot.
Channel 2 Action News has chosen, both on-air and online, to not to show the moment of the shooting.
The video does show Schultz walking forward, toward police slowly, with hands still at his side when one of the officers fired.
Students received an emergency alert from the university shortly after the shooting.
The school tweeted around 11:30 p.m. for everyone to seek shelter in a secure location. About 20 minutes later, the school sent another tweet saying there was no longer a threat to campus.
Schultz's family attorney confirmed to Channel 2's Nefertiti Jaquez he is currently conducting his own investigation into exactly what happened during the shooting.
The attorney is expected to address the media on Monday morning.
Georgia Tech confirms shooting on campus. No ongoing threat. pic.twitter.com/DgLFB2mCNY — Matt Johnson (@MJohnsonWSB) September 17, 2017
BREAKING: Witnesses report officer involved shooting on Georgia Tech campus. pic.twitter.com/fgS9N4bkAd — Matt Johnson (@MJohnsonWSB) September 17, 2017
APD & Georgia Tech Police on the scene on campus near Curran parking deck. Witnesses heard “drop the knife” before police shot a man. pic.twitter.com/k04z9lWyx3 — Matt Johnson (@MJohnsonWSB) September 17, 2017
© 2017 Cox Media Group. ||||| The call that led Georgia Tech campus police to respond to a man reportedly wielding a knife was made by the student who was later shot and killed by officers, police investigators said Monday night.
That student, Scout Schultz, left three suicide notes behind in a dormitory room, according to the Georgia Bureau of Investigation.
The developments added further layers of complexity to the death of Schultz, a 21-year-old who led the university’s Pride Alliance and had a history of mental illness.
In the call to police Saturday night, Schultz described a suspicious person “as a white male, with long blond hair, white T-shirt & blue jeans who is possibly intoxicated, holding a knife and possibly armed with a gun on his hip,” according to a statement from the Georgia Bureau of Investigation.
Investigators said a multipurpose tool that contained a knife was recovered from the scene. The statement did not say whether the knife was displayed but said no firearms were recovered.
An attorney for Schultz’s family said in a statement Monday night the knife remained in its holder and Scout’s arms were at the student’s side.
“It’s tragic that as Scout was battling mental health issues that pushed them to the edge of desperation, their life was taken with a bullet rather than saved with non-lethal force,” said the statement from L. Chris Stewart, the Schultz family attorney.
The parents of Schultz said their child, who identified as neither male nor female, had suffered from anxiety and depression, and had spent time in counseling after attempting suicide by hanging two years ago.
But Scout’s death stunned Lynne and Bill Schultz, who described Scout as “a very loving and caring and empathetic person.”
“I don’t think there was a single person that didn’t love them and cherish them for their involvement in the different causes,” Bill Schultz said.
On Monday night about 50 people marched to the campus police department following a memorial vigil, according to University spokesman Lance Wallace. Three people were arrested after protesters set one police vehicle on fire and injured two officers.
Schultz’s family urged protesters to act peacefully in a statement released through their attorney, according to the Associated Press.
“Answering violence with violence is not the answer. Our goal is to work diligently to make positive change at Georgia Tech in an effort to ensure a safer campus for all students.”
The shooting in Atlanta comes as police nationwide continue to face protest and media scrutiny over the use of deadly force. Police across the country shoot and kill an average of three people each day, a rate virtually unchanged in recent years despite calls from police leaders and the public for reform.
Mental illness remains a major factor in fatal police shootings, playing a role in at least one-fourth of all such shootings — at least 159 so far in 2017 — according to a Washington Post analysis.
Police reform groups have long emphasized the need for officers to undergo specialized crisis intervention training to learn best practices for interaction with people who are in the midst of a mental health crisis, but many police departments still do not require such training.
Since January 2015, police nationwide have shot and killed at least 392 people who were armed with knives, blades or other edged weapons — an average of about one such shooting every four days — according to the Washington Post’s database of fatal police shootings.
At least 102 of those cases, including the shooting of Schultz, occurred in 2017.
Fatal shootings of people armed with knives account for about 14 percent of the nearly 2,700 deadly police shootings tracked by The Post since the beginning of 2015.
Officers from Georgia Tech’s campus police force encountered Schultz, a computer engineering student, in a parking lot outside a dormitory, according to the Georgia Bureau of Investigation.
Schultz wasn’t holding a gun in video captured from a window above the parking lot shortly before midnight, as the campus was placed on lockdown.
Stewart, the attorney, said Schultz was shot once and that the bullet pierced the heart. Stewart said only one officer fired and that none of the other officers who responded from the Georgia Tech police department had been issued Tasers. A spokesman for Georgia Tech told CNN that campus police do not carry stun guns.
“That’s baffling to me that on a college campus you’d rather give the officers the most deadly weapons and not equip them with less lethal weapons,” Stewart said, noting that Schultz’s family is hoping the death leads to reforms within the department, including better training.
Video shows officers repeatedly telling Schultz to drop the weapon as the student advances.
“Come on, man, let’s drop the knife,” an officer with his gun drawn says in the graphic video. But Schultz walks toward him.
“Shoot me!”
The officer keeps backing up, moving behind a parking barricade and imploring again: “Nobody wants to hurt you, man.”
At least four officers had surrounded Schultz, according to WSB-TV. In the video, one of the officers called out to the student, who turned away from the barricade and began to move toward the new voice.
“What are we doing here?” the officer asked. No reply.
“Do not move!”
[After Minneapolis police officer fatally shoots Australian woman, her relatives plead for answers]
“Drop it!” someone said finally, as Schultz takes three more steps toward an officer, followed by the report of a gunshot and many screams. Schultz died Sunday at an Atlanta hospital.
While the state’s investigative bureau referred to Schultz as a male — “Scott Schultz” — the student and the student’s family used the pronoun “them,” and on the Pride Alliance website Schultz used the description “bisexual, nonbinary and intersex.”
“When I’m not running Pride or doing classwork I mostly play D&D and try to be politically active,” Schultz wrote.
Bill Schultz said recently that Scout had expressed interest in the anti-fascist political movement and frustration with news coverage of police-involved shootings.
“I will say this, that recently Scout has been slightly involved with the anti-fascist community and had expressed a number of anti-fascist ideas to me,” he said.
“I tend to think that if there was a cause it might have been anger at the police over all the shootings and all the long litany of police shootings.”
In a statement, Pride Alliance called its late president the “driving force” behind the LGBT group for the past two years.
“They pushed us to do more events and a larger variety events, and we would not be the organization we are known as without their constant hard work and dedication,” the statement reads.
“We love you Scout and we will continue to push for change.”
Scout, a fourth-year student at Georgia Tech, was born in Rockville, Md., and spent time in Iowa, Missouri and Florida before moving to the Atlanta area six years ago. Bill Schultz, a retired computer engineer, said Scout came by an interest in engineering earnestly and was scheduled to graduate a semester early.
“Scout was definitely a chip off the old block,” he said.
Both parents remembered well the time that Scout came out to them.
“It wasn’t a shock because we’re welcoming and loving parents,” Bill Schultz said. “It shouldn’t have been hard for Scout to come out but I think there were some issues involved there which is why they did a session in therapy.”
Lynne Schultz said that any of Scout’s mental health issues appeared to have been resolved and that friends had told them that Scout seemed fine in recent weeks.
“We had no clue that there was an issue in the last four weeks,” she said.
Lynne Schultz said that they have received an outpouring of support from members of the community and that more than 30 friends showed up to the hospital in the middle of the night when Scout was shot.
“Scout had a lot more friends than I realized,” she said.
Bill Schultz said Scout was “all justice for everyone. Now, we have to seek justice for Scout.”
“We’re proud of them for standing up for what they believe in,” Lynne Schultz said.
Had a great time tabling for Pride at FASET today! Always fun to greet the incoming first-years and get a glance at the… Posted by Pride Alliance at Georgia Tech on Monday, July 17, 2017
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Seven transgender women have been killed this year. Democrats want Jeff Sessions to investigate. | The president of Georgia Tech's Pride Alliance group was shot dead on campus Saturday night after suffering what a lawyer says appears to have been a mental breakdown. Police say Scout Schultz, who identified as non-binary instead of male or female, was shot after they responded to a 911 call about a person armed with a knife and gun outside a dormitory, WSB reports. Schultz doesn't appear to have had a gun, but police say the student was shot after refusing orders to drop a knife. Graphic video of the incident shows the 21-year-old walking toward officers and shouting "Shoot me!" around a minute before being shot by one of four nearby officers, reports the Washington Post. Video shows that Schultz's hands were down when the student approached officers, and photos from the scene show a utility tool that apparently included a blade, though it wasn't extended. A lawyer for Schultz's family accuses officers of overreacting. It appears Schultz "was having a mental breakdown and didn't know what to do," the lawyer says. "The area was secured. There was no one around at risk." Schultz's mother tells the Atlanta Journal-Constitution that her eldest child, who was born Scott, suffered from depression and attempted suicide two years ago. "Why didn't they use some nonlethal force, like pepper spray or Tasers?" she wonders. |
In 1995, VA began transforming its delivery and management of health care to expand access to care and increase efficiency. As part of this transformation VA decentralized decision-making and budgeting authority to 22 Veterans Integrated Service Networks, which became responsible for managing all VA health care. The networks and their health care locations became responsible for responding to changing inpatient food service needs and for maintaining or improving quality. Since 1995, the networks have focused on providing care in the most appropriate setting by following headquarters’ guidance and responding to performance measurement incentives. This has resulted in an increase in outpatient care and a decrease in inpatient care. The inpatient average daily census numbers have declined by 35 percent during this period (see fig. 1). Because the decreased number of inpatients meant less need for food services, VA downsized its inpatient food service staff by about 22 percent as a result of actions taken by networks and inpatient locations (see fig. 2). Unlike most health care systems, VA divides its food service operations into inpatient and retail operations, usually with separate kitchens and staff at each inpatient location. The NFS program, funded by appropriations, is responsible for ensuring that VA’s inpatients receive quality nutrition as an integrated part of their health care. VCS is generally responsible for providing food and other retail services to outpatients, visitors, and employees at VA’s health care delivery locations. Although the law authorizes VCS to receive appropriations, VCS has operated for many years solely on funds earned from sales. As with direct health care services, VA’s networks have also explored ways to improve services that support health care, such as food service operations. While VA networks have the option to focus exclusively on improving the efficiency of in-house provision of food service, they also have the option of competing their in-house operations versus contractors to improve efficiency. VA could do this through the Office of Management and Budget (OMB) Circular A-76 process. In the A-76 process, the government identifies the work to be performed—described in the performance work statement—and prepares an in-house cost estimate, based on its most efficient organization, to compare with the best offer from the private sector. To enhance the efficiency of food service, VA has consolidated food production (the cooking and preparation of food) for 28 inpatient locations into kitchens at 10 VA inpatient locations. One of these consolidations took place in the Central Texas Healthcare System and resulted in elimination of food production at two facilities. This example illustrates key elements of the consolidation process. Before consolidation, the Temple, Waco, and Marlin locations each produced their own food for average daily inpatient populations of 664, 679, and 74, respectively. After consolidation, food for Waco and Marlin was produced at Temple because adequate space was available and driving distances (the time needed to transport food) to the receiving locations were less than 90 minutes. The consolidation was phased in over about 3 years and completed in 1998. The consolidation required one-time equipment purchases of about $1 million and resulted in recurring annual labor savings of about $1.3 million.Labor savings were achieved by a reduction of 32 employees, primarily through attrition and buyouts. The Central Texas Healthcare System produces food in one location and transports it to other locations using an advance food preparation and delivery system. Food is prepared in advance and chilled for serving up to 5 days later. The chilled food can be transported in refrigerated trucks from one location to another without losing freshness or becoming unsafe. The food is reheated at the location where it is served. VA reports that patient satisfaction at the Central Texas Health Care System is higher, as measured by patient surveys, since consolidation. VA’s NFS dietitians continue to have responsibility for ensuring food quality and that the nutrition needs of patients are met. Additional VA health care regions provide opportunities for consolidation. For example, four VA locations in the Chicago area are within a 1-hour drive of one another (see fig. 3); in fact, three are within 20 minutes of each other. Yet all four continue to prepare their own food for inpatients. The Chicago network is developing plans for food consolidation for some of these locations. Chicago (Lakeside) Chicago (Westside) Overall, VA currently has 63 unconsolidated production locations within 90 minutes’ drive of another production location.Our analysis suggests that VA could increase its efficiency by consolidating food production for these 63 locations into 29 production locations (see fig. 4).These consolidations could save an estimated $12 million annually from a reduction of 348 employees, with as many as 38 positions eliminated in a single location. To achieve these savings, we estimate that VA may have to make a one-time investment of an estimated $11 million to purchase advance food preparation and delivery equipment. (One-time expenditures are held to this amount because 24 of the potential consolidation locations already own the advance food delivery equipment, which makes up the bulk of equipment costs.) Making the changes required to consolidate food production requires management commitment to a process that may take several years and much effort to achieve but one that could yield significant savings. Network officials indicated in our survey of VA’s health care networks that 29 production locations are considering or planning to consolidate food production. In commenting on a draft version of this report, VA stated that networks 1 (Boston), 3 (Bronx), 8 (Bay Pines), 12 (Chicago), and 22 (Long Beach) have conducted feasibility studies to consider consolidated production. VA has already consolidated some food production locations in these networks. However, these networks could potentially consolidate 14 additional locations into 7 locations. VA’s actual savings from consolidations could exceed our estimates for two reasons. First, VA’s Central Texas Health Care System consolidation, from which we obtained a benchmark for estimating potential savings, does not appear to have yet achieved its full savings potential, which suggests that our savings may be understated. VA officials have indicated that several food service positions will not be filled when they become vacant. Some positions were retained to minimize involuntary separation of employees. Second, we used a 90-minute driving distance to determine potential consolidations and it seems possible that VA could elect to use greater distances. For example, the VA facility in Dayton is preparing and delivering food as far as Butler, Pennsylvania—a 6-hour drive. The Dayton facility has technologies that can keep food safely chilled for more than 30 days. In addition, two facilities in Texas that are about a 2-hour drive from one another are currently in the process of consolidating their food systems. Using greater travel distances could allow more facilities to be consolidated, thereby increasing cost savings. VA can save millions of dollars in labor costs by employing VCS workers, rather than NFS workers, to provide inpatient food service. These savings can be achieved because these workers are paid, on average, about 30 percent less than NFS wage grade employees. The wage differences between the two result from differences in how wage rates for their respective pay schedules are determined.VCS job descriptions are similar to those of NFS and both receive similar training when providing inpatient food services. VCS workers are federal government employees paid under the Non Appropriated Funds Regular Wage Rate Schedule. NFS workers are also federal government employees but are paid under the Federal Wage System Regular and Special Production Facilitating Wage Rate Schedule. Both VCS and NFS employees have the same standard government benefit coverage. VA is able to employ VCS workers to provide inpatient services through NFS agreements with VCS under the Economy Act. Recently, nine VA locations began to employ VCS workers rather than NFS workers to provide inpatient food services (see app. II for a list of these locations). In some of these locations, VCS employees provide all inpatient food services; in others VCS workers are only beginning to be included in inpatient food services. In all cases, NFS dietitians continue to ensure food service quality. Before these changes to VCS inpatient food service, VCS had only provided retail food service at these locations. Three of the locations converting to VCS labor were at Marion, Illinois, and the Jefferson Barracks and John Cochran locations in St. Louis, Missouri. These examples illustrate different stages of VCS conversion and different sizes of health care facilities. VA began its VCS conversion in Marion, Illinois, in 1997. Today, Marion employs mostly VCS workers to serve an average daily census of 95 patients. VA reports that patient satisfaction is higher, as measured by patient surveys, than it was before and that NFS dietitians continue to be responsible for quality. When the conversion to VCS employees is complete, VA estimates that $375,000 a year could be saved through reductions in wage costs. NFS workers have left Marion inpatient food service through normal attrition, including retirement, moving to other VA jobs, or leaving VA voluntarily. Personnel changes were monitored by the facility’s Labor Management Partnership Council, which included union representation. Those employees who remain retain their NFS salaries. St. Louis’s two locations began VCS integration in 1999. Today the consolidated St. Louis locations serve an average daily census of 301 inpatients by employing NFS employees and a VCS manager. Other VCS employees are being recruited. When fully implemented, VA estimates that St. Louis could save $803,000 in wage costs annually. St. Louis expects to follow Marion’s experience in protecting current NFS employees’ job security and salary and phasing in VCS conversion. Our analysis suggests that VA could lower labor costs by an estimated $67 million annually (in addition to the estimated $12 million consolidation savings discussed earlier) if less-expensive VCS workers are employed in place of NFS workers at 166 additional locations. The Marion and St. Louis experiences suggest that the full extent of these savings would be realized over a number of years as VCS conversion is phased in. However, some savings can be achieved in the first year of implementation. Currently, NFS wage grade workers provide inpatient food services at these 166 locations. VCS employees could cook and prepare food, distribute food to patients, and retrieve and wash dishes, trays, and utensils for inpatients at these locations while NFS dietitians continue to assure quality. Three locations—Kansas City, Leavenworth, and Topeka—are scheduled to begin conversion to VCS inpatient food service provision. In our survey of VA health care networks, VA officials indicated that another location is considering conversion. Making the changes required to convert to VCS inpatient food service provision requires management commitment to a process that may take several years and much effort to achieve but has the potential for significant cost savings. Actual savings may vary from our estimates because of many local factors at each inpatient location. To determine actual savings through the use of VCS employees, VA would need to conduct studies of each inpatient food location and weigh alternatives for providing the lowest-cost food service while maintaining quality. VA would also need to incorporate in this process consideration of the effect such changes could have on other VA priorities, such as maintaining job opportunities for veterans and compensated work therapy patients. A key element of such a study is recognition that VA’s inpatient food service operations are developing along the lines of other hospital food service operations, which are changing the nature of the hospital food service industry. This includes the use of more pre-prepared food products, less need for specialized cooking skills, and more reliance on computer ordering for preparation and placement of food on patient trays. All of these processes reduce both the need for a higher-skilled work force and the degree of training needed to successfully produce and distribute hospital food, whether VA inpatient food service is provided by NFS or VCS. NFS and VCS managers agree that employees can be trained more quickly today than in the past to provide inpatient food services. VCS managers also believe that higher turnover rates for lower-paid employees would not adversely affect services. VA uses private contractors for inpatient food services at two inpatient locations—Sodexho Marriott at its Anchorage domiciliary and SkyChef at the Honolulu nursing home. These locations have no VCS retail food services and have only a long-term-care inpatient mission. In addition, both locations began inpatient food services with a contractor rather than with NFS employees. While VA has used competitive sourcing only to a limited extent, our analysis suggests that VA may be able to lower costs by determining if in- house or private sector provision of food services is more cost effective. VA could realize additional savings by competing, through the use of OMB’s Circular A-76, the costs of government provision of these services versus the costs of private-sector provision. Our work at the Department of Defense shows that, by competitive sourcing under OMB Circular A-76, costs decline through increased efficiencies whether the government or the private sector wins the competition to provide services.This work indicates that savings are probable for VA, but we cannot estimate potential savings from competitive sourcing because of uncertainty regarding the availability of interested contractors at each VA location, the price of contractor services, and the extent to which VA food services units are able to decrease their operating costs in a competitive process. Savings from competitive sourcing might be higher if VA expanded competitive sourcing to include locations that combine NFS inpatient and VCS retail operations. When food contractors provide services to non-VA hospitals, they usually operate both inpatient and retail as one operation and most of their profits come from retail sales, according to food service contractors with whom we spoke. However, VA may not offer the most attractive business opportunity for food contractors for two reasons. First, VCS opposes consideration of contracting for retail food services because it uses profits from a minority of profitable locations to subsidize operations at the remainder. Moreover, VCS believes that some of its other retail activities, such as vending of toiletries and personal articles that are not generally provided by food service contractors, are not viable without retail food. This is important to VCS because it receives no appropriations and funds its operations based on revenues earned. Second, the small size of VA inpatient workloads at many locations may be less attractive to contractors because there is less opportunity to spread fixed costs over higher volume. For example, 27 percent of VA locations have an average daily census of less than 100 inpatients, and 56 percent have an average daily census of less than 200. However, it may be possible for potential contractors to combine food services at smaller locations with services at other nearby VA and non-VA locations to generate higher volume. To achieve savings through competitive sourcing, VA would need to conduct studies of each inpatient food location to weigh alternatives for providing the lowest-cost food service while maintaining quality. In these studies, VA would need to consider the effect such changes could have on other VA priorities, such as maintaining job opportunities for veterans and compensated work therapy patients. To date, however, VA has done little to explore either its own experience with using contractors or contractor interest. Although fostering competition among government and private contractors to provide food services can be a time-consuming process, it offers opportunities to create more efficient and less costly operations when in-house organizations win the competition, or savings when private competitors win. This process can be demanding, however, and requires strong management commitment to achieve. VA could foster competition among government and private providers in the provision of inpatient food service by using the competitive process of OMB’s Circular A-76. VA could compete all its food service operations or any part of these services at each location. VA could consider competitive sourcing alone or in combination with consolidation or use of VCS employees, as we discussed earlier. VA has opportunities to save millions of dollars by systematically considering consolidating food production, employing VCS workers to provide inpatient food services, and competitive sourcing. VA already has experience in implementing these options at a number of locations, although VA’s experience with food service contractors is limited. VA has not, however, systematically compared these options at all 177 inpatient locations. Using a systematic approach to assess available options at each location would allow VA to provide food service at the lowest cost consistent with maintaining quality. We recommend that the Acting Secretary of Veterans Affairs direct the Under Secretary for Health to direct the 22 networks to (1) systematically assess each inpatient food service location to determine if consolidation, employment of VCS workers, competitive sourcing, or a combination of these options would reduce costs while maintaining quality; and (2) implement the least-costly options in a timely manner. We received written comments on a draft of this report from VA’s Acting Secretary and the National President of AFGE. Their comments and our responses are discussed in the following sections. The comments in their entirety from VA and AFGE are in appendixes III and IV, respectively. VA agreed in principle with our recommendations, noting that it is already consolidating food production locations, converting to VCS inpatient food service provision, and using competitive sourcing. VA should be commended for its progress to date. However, VA has not systematically assessed each of these options at each location as we recommend. VA stated that the three options we identified are part of its Nutrition and Food Service strategic plan for improving quality and cost effectiveness. In our review of the plan, we found the VCS option to be clearly identified. However, the consolidation option discussed in the plan appears to deal with NFS consolidation with other services rather than consolidating food production locations and we found no reference to competitive sourcing. In addition, we found no reference to the systematic assessments we recommend. We believe the strategic plan could help VA implement our recommendations if the plan clearly specified that all three options we identified to reduce costs are to be systematically assessed for each location. Although VA agreed with our recommendation for timely implementation, it provided no operational plan or timeline for conducting the assessments we recommended. VA states that it is assessing the feasibility and subsequent implementation of these options at a deliberate pace to carefully consider relevant factors. We agree that VA should carefully consider these factors but believe the recommended assessments should be completed as expeditiously as possible. Delay means that millions of dollars per year may be spent unnecessarily on food services. VA expressed several specific concerns on a number of issues. Consolidationoffoodproduction. VA raised issues regarding (1) the need to do a study at each location, (2) transportation of perishable food, (3) costs, (4) VA’s Subsistence Prime Vendor (SPV) program, and (5) integration of NFS employees with environmental management services. First, VA stated that studies of food consolidation have already been done in Veterans Integrated Services Networks 1 (Boston), 3 (Bronx), 8 (Bay Pines), 12 (Chicago), and 22 (Long Beach), suggesting that additional studies are not needed at each location in these networks. We commend VA’s efforts to study ways to reduce costs in these networks. However, based on our discussions with NFS officials at several of these networks and reviews of several of these studies, we disagree that VA has systematically assessed all three options in each network. VA focused more on the potential for consolidations, but this option may be even more cost- effective if implemented in conjunction with the use of VCS employees or competitive sourcing in these networks. Because VA has not assessed all three options, it may not have identified the least-costly options in each network. Second, VA stated that the safety of transporting perishable food products and related logistics are key factors in determining the viability of consolidating VA facility food production. VA’s statement suggests that, as a result, fewer locations may be able to consolidate than we estimated and that the speed of consolidation could be slow. We agree that VA needs to carefully consider these factors, but we factored in the transportation and logistical issues in our analysis based on VA’s experience. As discussed in the report, VA has successfully addressed these factors in 28 other locations that are comparable to the potential locations we identified. Therefore, we do not view such factors as reasons for not moving ahead expeditiously but rather as factors that require strong management commitment in order to realize potential savings. Third, VA stated that large capital investment costs for equipment and space are key factors affecting the viability of potential consolidations. Again, we agree. However, investment costs must be assessed within the context of potential savings. For example, once fully implemented the savings realized in 1 year under the consolidation of food services in the Central Texas Healthcare System exceeded the investment costs, making that consolidation viable. We included in our assessments of the viability of consolidation at other VA locations the costs of a blast chill system of food production, such as that operated by the Central Texas Healthcare System, and the costs of the related advanced food delivery equipment.Therefore, the potential consolidation locations we identified could result in annual savings greater than the required investment costs within a reasonable time period. Fourth, VA also stated that its SPV program needs to be considered in consolidation decisions. The SPV program reduces the costs of food items through high-volume purchases by all of VA and certain other government agencies. We agree that the SPV program should be considered in consolidation decisions at each location, but we are doubtful that this would affect a decision on whether to consolidate. Our review of consolidations showed that savings result from reduced labor costs, not reduced food costs. Moreover, we are doubtful that the SPV program will affect food costs in a consolidation because the same number of patients will be fed whether consolidation occurs or not and all VA locations already participate in the SPV program. Fifth, VA stated that integration of NFS employees with environmental management services should be considered in consolidations. NFS integration with environmental management services includes having some employees work in both services so that an employee with downtime in food services can work in environmental services and vice-versa. Again, we agree that this factor should be considered in consolidations at each location, but it is unclear how this would affect a consolidation decision. While integrating NFS workers with other services can reduce food production costs without consolidation by shifting unneeded staff time and charges to other services, it is unlikely to reduce costs to the degree they would be reduced in consolidation. Consolidation reduces costs primarily through economies of scale whereby fewer workers in one location can produce food for patients in two or more locations than the smallest number of workers combined could produce food separately at each location. Therefore, consolidation would provide greater cost savings. In addition, NFS integration with environmental management services could be included in a consolidation. EmployingVCSworkers. VA raised issues regarding (1) time needed to phase in conversions, (2) variability in savings by location, (3) separation costs, and (4) training costs. First, VA stated in its comments, and we agree, that the savings from converting to VCS workers would take years to fully achieve. However, VA officials told us that some savings are possible in the first year of implementation. The magnitude of savings possible makes it worth the effort even if several years are required to fully achieve savings. Our report reflects this point. Our savings estimate of $67 million represents the total potential annual cost reductions for employing VCS workers to provide inpatient food services and not the savings that could be realized in fiscal year 2001. VA would not realize the full savings at each location for a number of years because VCS workers would only be phased in when NFS workers left through normal attrition such as retirement, voluntarily leaving for other VA jobs, or for jobs outside VA. Second, VA stated that potential savings from employing VCS workers to provide inpatient food services would vary from location to location, making it difficult to project a total cost benefit at this time. We agree that actual savings achieved would likely vary from location to location. However, we estimated total potential savings assuming that VA’s locations could save an average of about 30 percent of combined wage and benefit costs. This rate approximates the rate VA is realizing in its conversion to VCS employees at Marion, Illinois. VCS headquarters managers and network and facility officials in the VCS conversions studied agreed that using a 30 percent savings rate is reasonable for estimating nationwide savings. Third, VA also suggests that our estimated savings for employing VCS workers are overstated because of additional separation costs for NFS employees that would be required to implement this option. We do not agree. In the VCS conversions we reviewed, NFS workers typically continue working until they leave through normal attrition including retirement, moving to other jobs in VA, or leaving VA voluntarily. Thus, no special separation costs are incurred. Fourth, VA states that training costs could reduce our estimated savings. VA said these training costs would be for (1) NFS workers who leave food service to take other VA jobs, (2) VCS employees who replace NFS employees, and (3) part-time workers providing food service. We do not agree that these costs would reduce our estimated savings. As previously discussed, in VCS conversions NFS workers are expected to leave through normal attrition such as retirement, voluntarily leaving for other VA jobs, or voluntarily leaving for jobs outside VA. The training for NFS employees taking other jobs would be required whether NFS or non-NFS employees were hired for those jobs. Similarly, training for VCS employees replacing NFS employees would be required whether the replacements were VCS or other employees. Finally, both VCS and NFS already use many part-time workers and VA indicates it will continue this strategy. As a result, these training costs would be required in any event and are not additional costs. Competitivesourcing. Although VA concurred with our recommendation to consider competitive sourcing as an option in providing food services, VA raised concerns about the opportunities to use contractors in VA’s inpatient settings. We agree, as stated in the report, that VA may not offer the most attractive business opportunity for food contractors because of VA’s unique structure for providing inpatient and retail food services separately at its locations and because of the small inpatient workload at most locations. Because of these and other uncertainties we could not estimate the number of locations that could benefit from competitive sourcing or the potential savings. Nonetheless, we believe that competitive sourcing should be considered because of its potential to increase efficiency. As previously discussed, our work in other areas has shown that the competitive sourcing process reduces costs through increased efficiency whether the government or a contractor wins the competition to provide services. AFGE opposed all three options we included for study in our recommendations, expressing a number of concerns regarding these options. AFGE’s overarching concern is whether VA should focus its cost containment strategies on efforts that, in its view, could further impoverish current workers or compromise food quality. While we understand and appreciate AFGE’s legitimate concerns about current workers’ wages and employment and the quality of food provided to veterans, we believe VA can adequately address these concerns when implementing our recommendations. In the past, VA has demonstrated the ability to implement comparable options without adversely affecting food service workers. Further, our discussions with VA officials indicate that they remain sensitive to the importance of taking appropriate steps to prevent adverse effects on current food service workers. We discuss AFGE’s specific concerns below. EmployingVCSworkers. AFGE expressed six concerns about employing VCS workers in place of NFS workers to provide inpatient food service. First, AFGE stated that our estimate of $67 million in annual savings from employing VCS workers is misleading. AFGE said that the savings we estimated would be a one-time occurrence and establish a new baseline once achieved. We do not agree. Because there is no specific appropriation for inpatient food services, VA will not return savings from its food service operations to the U.S. Treasury and thereby establish a new lower baseline budget for VA. Rather, VA retains the savings achieved through management efficiencies in its budget, thereby making the savings available for other purposes in each subsequent year. Second, AFGE suggested that part of the savings we estimated are based on the government paying less for its match of employee health care premiums because lower-paid VCS employees will less frequently participate in government-sponsored health care plans than NFS employees. We did not assume that government costs would be less because fewer VCS workers would participate in government-sponsored health care plans than NFS workers. Information provided by VA shows that the proportion of NFS and VCS workers currently purchasing health insurance through government plans is 32 and 25 percent, respectively. Third, AFGE said that our estimated savings for VA in employing VCS workers are overstated because they do not include increased federal costs for programs such as Medicaid, the Earned Income Tax Credit, the CHIP (Children’s Health Insurance Program), Head Start, Housing and Urban Development rent subsidies, and other expenses related to increasing the ranks of the working poor. We disagree that our savings are overstated because our assessment of VA’s recent experience suggests there would be little or no additional costs to other federal programs as a result of VCS conversion. Based on VA’s experience to date, no NFS worker has had his or her wages reduced or lost employment under the VCS conversions we reviewed and no VCS worker was required to accept lower wages and benefits than they already had or could obtain elsewhere. In VCS conversions, NFS workers are being replaced as a result of normal attrition, including retirement, voluntarily moving to other jobs in VA, or voluntarily leaving for non-VA jobs. As such, the departing NFS workers would have the same impact on other federal programs as if there were no VCS conversion. Current VCS workers who replace NFS workers maintain their wages and benefits and therefore have no impact on other federal programs. Newly-hired VCS workers who replace NFS workers choose VCS over other employment opportunities. Presumably, wages for these new workers are competitive with wages in jobs these workers otherwise would have taken. Fourth, AFGE raised questions regarding the legality of VCS providing inpatient food services in place of NFS employees under the Economy Act. AFGE questioned if VCS could enter into an agreement under the Economy Act and supervise civil service employees, such as NSF employees, and if VCS and NFS employees with similar job descriptions could be paid different wages. We found no legal deficiency in these areas under VA’s use of the Economy Act. An “instrumentality of the United States,” VCS is authorized to receive and has received appropriated funds credited to a revolving fund. VCS’s revolving fund is a permanent, indefinite appropriation available to cover its operating expenses. Therefore, we agree with VA that VCS can be a party to an agreement under the Economy Act. In addition, VCS employees hold “excepted” positions within the federal civil service and are not barred from supervising NFS employees. Finally, VCS employee positions are exempt under 38 U.S.C. 7802 (5) from requirements of title 5 of the United States Code regarding equal pay and VCS employees are subject to a different pay scale than NFS employees. Fifth, AFGE said that it will take years to realize the estimated savings. We agree that it will take years to fully realize these savings, as our discussion of Marion and St. Louis indicate, but some savings can begin to accrue in the first year of implementation. Moreover, the amount of savings possible makes it worth the effort even if several years are required to fully achieve them. Sixth, AFGE said that higher VCS turnover rates will create problems for converting to VCS provision of inpatient food services. We do not agree. Based on experience to date, VCS managers at headquarters and at Marion have stated that turnover has not affected their ability to provide inpatient food services or affected quality. Consolidationoffoodproduction. AFGE expressed two concerns related to consolidation of food production and incorrectly stated that we said that VCS opposes consolidation. First, AFGE said that our estimates of kitchen consolidation savings are overstated because we underestimate the financial and practical costs of losing in-house food production. We do not agree. Our savings estimates account for additional costs required by consolidation that were identified by VA officials and representatives of the food service industry who have consolidated food production locations. As we discuss in our evaluation of the Central Texas Healthcare System, our savings model is conservative and probably understates savings. Second, AFGE stated that consolidations lower the quality of food provided to veterans. For example, AFGE expresses concerns regarding frozen food and other issues. We disagree. As we discussed in the report, VA reports that patient satisfaction increased at the Central Texas Healthcare System after consolidation, as measured by improvements in the taste and temperature of food. The Central Texas Healthcare System received an award from VA headquarters for reducing costs and maintaining quality in its consolidation activities. The award included citations for (1) provision of consistently high-quality meals, (2) improvements in timeliness, (3) increased patient satisfaction, and (4) maintenance of quality controls. Moreover, in all VA locations that consolidate, NFS dietitians continue to have quality control responsibility to ensure that veterans’ nutrition needs are met. AFGE also stated that we noted that VCS opposes privatization and centralization. We said that VCS opposes privatizing the services it provides, but we did not say that VCS opposes consolidation. In fact, VCS officials told us that VCS does not oppose consolidation. Competitivesourcing. AFGE expressed five concerns about competitive sourcing. First, AFGE stated that there is no evidence that contracting saves money. We believe it is important to distinguish between an objective to contract and an objective to compete government versus private service provision. Our recommendation is that VA consider competitively sourcing food service operations rather than outright contracting as an end in itself. Competitive sourcing can result in the government either retaining its position as service provider, or contracting with a private provider. As we have discussed, our work shows that competitive sourcing reduces cost through increased efficiency. The costs are reduced whether government or the private contractor wins the competition. We believe it would be a mistake to eliminate the competitive sourcing option for reducing VA’s costs. Second, AFGE expressed concern as to whether VA would use the OMB Circular A-76 process for competitive sourcing or contract without the benefit of a public-private competition. We agree that VA could, under limited circumstances specified in OMB’s Circular A-76, convert to contract performance without cost comparison. However, our recommendation to VA was that it consider competitive sourcing rather than contracting. VA agreed in principal with our recommendation. Third, AFGE also expressed concern about the quality of food service under contracting. We do not share AFGE’s concern because the same quality controls VA currently uses for in-house provision of food service could be included and enforced in the contract if a private firm chooses to compete and wins the competition under competitive sourcing. We note that some of VA’s medical affiliates, including major university hospitals, provide inpatient food service through contractors. Fourth, AFGE expressed concern that veterans currently employed in VA’s in-house food production could lose their jobs if a contractor wins the competition. We agree this is possible. As stated in the report, we believe that VA should include this as a consideration in its assessments of food service at each location. We note, however, that government employees adversely affected by decisions under the OMB A-76 process competition often are offered positions with winning contractors. VA could specify, as other agencies have, that a contractor hire such employees if it wins the competitive sourcing competition. Fifth, AFGE stated that there is little opportunity for a contractor to provide services less expensively than VA if VA uses lower-paid VCS employees. AFGE believes that the only way to lower costs in contracting is to lower wages and does not believe this is possible if a contractor is competing with VCS’s wage rates. We disagree. Competitive sourcing is an incentive to both government and the contractor to increase efficiency as much as possible to achieve cost reductions. These increased efficiencies can be achieved through improvements in process operations that reduce the amount of capital or human resources needed to process the same workload. As arranged with your staff, we are sending copies of this report to the Honorable Hershel W. Gober, Acting Secretary of Veterans Affairs; interested congressional committees; and other interested parties. We will make copies available to others upon request. If you have any questions about this report, please call me at (202) 512- 7101. Other staff who contributed to this report are listed in appendix V. We reviewed the Department of Veterans Affairs (VA) inpatient food services for fiscal year 1999 to assess potential savings nationwide if VA were to implement system-wide the three types of initiatives it has used in some of its VA inpatient health care locations: (1) consolidating food production, (2) employing Veterans Canteen Service (VCS) rather than Nutrition and Food Service (NFS) workers to provide inpatient food services, and (3) competitive sourcing. We interviewed VA headquarters officials in NFS, VCS, the Office of General Counsel, and other offices. We obtained documents from headquarters on the consolidation of food service, the use of VCS labor, and contracting with private food service contractors. We obtained data on food services at each inpatient location by surveying each Veterans Integrated Service Network. We obtained information on food service needs, how VA provides services, costs, and number of meals at each VA inpatient location. Networks and locations also provided us with information on advance food technologies and excess capacity, and with additional information on consolidating food services, the use of VCS, and private contractors. We also obtained additional data through interviews, documents, and physical inspections of kitchen facilities and food delivery at VA locations. We visited Veterans Integrated Service Network 17 (Dallas) locations in Temple, Marlin, Waco, and Dallas. We also visited locations in Marion, Illinois, and Jefferson Barracks and John Cochran in St. Louis, Missouri, in Veterans Integrated Network 15 (Kansas City). To estimate savings from consolidation, we first identified areas with multiple food production locations, using the criterion that two or more locations were located within 90 minutes’ driving distance of each other. We then examined the combined workloads and costs of unconsolidated locations in these markets to determine whether savings could be achieved through consolidation. Locations were considered to be already consolidated if they received 80 percent or more of their food from another location or produced 80 percent or more of the food for another location. Our analysis of VA cost data and discussions with VA officials suggested that the ratio of employees to the average number of daily patients (average daily inpatient census) is an appropriate measure for benchmarking savings in food services. We confirmed this relationship using 1999 data by regressing average daily patients on total employees. The resulting model showed that the average daily patients accounted for 86 percent of the variation in staffing. We computed savings estimates for the consolidations using the staffing ratio of one employee per 6.7 average daily patients. This staffing ratio was achieved by the Central Texas Healthcare System after completing consolidation of inpatient food services at Temple, Marlin, and Waco. To validate this measure we spoke to VA officials representing both NFS and VCS, who agreed that using the Central Texas Healthcare System staffing ratio after consolidation was a reasonable, perhaps conservative, estimate of achievable staffing levels. Some VA production locations, in fact, are more efficient (lower ratio of employees to the average number of daily patients) than operations at the Central Texas Healthcare System. To calculate total savings from food consolidation we first multiplied the total average number of daily patients of the proposed market by the Central Texas Healthcare System staffing ratio (one employee per 6.7 average daily patients) to arrive at a projected employee total for the consolidated market.We then subtracted this projected total from the fiscal year 1999 employee total of the individual locations in an area to determine the number of employees not needed, if any. Cost savings for the area were computed by multiplying the number of positions saved by the average salary costs of NFS wage grade, including benefits, within each market. We aggregated savings from each market to determine the total savings from food consolidation. The one-time investment for equipment was estimated by assuming that one location in each consolidated area required an advance food preparation system and every location required an advance food delivery system. To project the total cost of advance food preparation equipment (a fixed cost that includes items such as the blast chiller), we multiplied the cost of Central Texas Healthcare System’s advance food preparation system (purchase amount adjusted to 1999 dollars) by the number of locations within areas that required this system. We calculated the total cost for the advance food delivery systems (a variable cost that includes items such as reheating carts, trays, and plates) by multiplying the total average daily patients of locations without this system by Central Texas Healthcare System’s cost per average daily patients (adjusted to 1999 dollars). We calculated the costs of transporting food from a central location using data obtained from the Central Texas Healthcare System. To project the total costs of transportation for the consolidated areas, we multiplied the annual cost of one leased refrigerated truck by the total number of consolidated areas. Because this cost recurs each year, we subtracted this cost from the annual recurring savings from consolidation. We determined the potential savings from converting from NFS to VCS labor by applying a 30 percent savings reduction to NFS employee costs. VCS salaries are based on the Department of Defense’s survey of food service worker wages in a local area, and are competitive with the private sector. Nationally, NFS salaries average about 70 percent of total NFS food production costs. VCS salaries are normally about 30 percent below NFS salaries. VCS headquarters established this percentage, and network and facility officials have agreed that using a 30 percent savings rate is reasonable. We also conducted a literature review of the food services industry, interviewed selected non-VA food service officials and officials from the private vendor sector and food service industry organizations, and visited contractor food production facilities. We validated survey data used to construct cost estimates by comparing questionable data supplied on the 1999 survey with VA data sources. When necessary, we also contacted survey respondents and/or VA officials to clarify or correct data. We performed our review between October 1999 and November 2000 in accordance with generally accepted government auditing standards. Deborah L. Edwards, James C. Musselwhite, William R. Stanco, John R. Kirstein, Thomas A. Walke, Elsie M. Picyk, Susan Lawes, John G. Brosnan, and Roger J. Thomas contributed to this report. VALaundryService:ConsolidationsandCompetitiveSourcingCouldSave Millions(GAO/01-61, Nov. 30, 2000). VAHealthCare:VAIsStrugglingtoRespondtoAssetRealignment Challenges(GAO/T-HEHS-00-91, Apr. 6, 2000). VAHealthCare:VAIsStrugglingtoAddressAssetRealignmentChallenges (GAO/T-HEHS-00-88, Apr. 5, 2000). VAHealthCare:LaundryServiceOperationsandCosts(GAO/HEHS-00-16, Dec. 21, 1999). VAHealthCare:FoodServiceOperationsandCostsatInpatientFacilities (GAO/HEHS-00-17, Nov. 19, 1999). Veterans’HealthCare:FiscalYear2000Budget(GAO/HEHS-99-189R, Sept. 14, 1999). VAHealthCare:ImprovementsNeededinCapitalAssetPlanningand Budgeting(GAO/HEHS-99-145, Aug. 13, 1999). VAHealthCare:ChallengesFacingVAinDevelopinganAssetRealignment Process(GAO/T-HEHS-99-173, July 22, 1999). VAHealthCare:ProgressandChallengesinProvidingCaretoVeterans (GAO/T-HEHS-99-158, July 15, 1999). Veterans’Affairs:ProgressandChallengesinTransformingHealthCare (GAO/T-HEHS-99-109, Apr. 15, 1999). VAHealthCare:CapitalAssetPlanningandBudgetingNeedImprovement (GAO/T-HEHS-99-83, Mar. 10, 1999). The first copy of each GAO report is free. Additional copies of reports are $2 each. A check or money order should be made out to the Superintendent of Documents. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. Ordersbymail: U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Ordersbyvisiting: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Ordersbyphone: (202) 512-6000 fax: (202) 512-6061 TDD (202) 512-2537 Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. Web site: http://www.gao.gov/fraudnet/fraudnet.htm e-mail: [email protected] 1-800-424-5454 (automated answering system) | The Department of Veterans Affairs (VA) could save millions of dollars by systematically consolidating food production, employing Veterans Canteen Service workers to provide inpatient food services, and using competitive sourcing. VA already has experience in implementing these options at several locations, although VA's experience with food service contractors is limited. Using a systematic approach to assess available options at each location would allow VA to provide food service at the lowest cost while maintaining quality. |
Claims of asbestos-related injury have flooded the courts since the 1970s, but litigation has proven to be an inadequate means to resolving all the claims. The Supreme Court has twice struck down attempted global asbestos settlements, in both instances inviting Congress to craft a legislative solution. In an attempt to resolve this problem, Senator Arlen Specter introduced S. 852 , the Fairness in Asbestos Injury Resolution (FAIR) Act. The bill was reported out of the Senate Judiciary Committee on June 16 ( S.Rept. 109-97 ). The bill would establish within the Department of Labor the Office of Asbestos Disease Compensation, which would award damages to claimants on a no-fault basis according to their respective levels of injury and asbestos exposure. The Office would be headed by an Administrator, who would be appointed by the President—with the advice and consent of the Senate—to a five-year term and report directly to the Assistant Secretary of Labor for the Employment Standards Administration. The Office would pay awards from the privately funded Asbestos Injury Claims Resolution Fund ("the Fund"), discussed in greater detail below. New asbestos claims—and most pending ones—could no longer be pursued in federal or state court. Upon enactment of S. 852 , all pending asbestos claims (other than some individual actions at the evidentiary stage and actions with final verdicts, judgments, or orders) would be stayed. If, after nine months, the administrative process outlined in the bill is not up and running so that it can review and pay "exigent health claims"—i.e., claims by those suffering from mesothelioma or having a life expectancy of less than one year, or claims by relatives of those who died from asbestos-related conditions after enactment of the bill—at a reasonable rate, then those claims could be maintained in the same courts in which the claims were pending when the act was enacted. The comparable time period for all other asbestos claims (with the exception of the least serious claims) would be two years. Any individual who suffers from an asbestos-related disease or condition meeting the medical criteria listed in the bill (or, in the case of death or incompetence, that person's personal representative) could bring a claim under the administrative process outlined in the bill. An initial claim would have to be filed no later than five years after the claimant receives a medical diagnosis and medical test results that would make the claimant eligible for one of the bill's disease levels. For claimants who have asbestos claims pending in court, the statute of limitations would be five years from enactment of the bill. The Administrator would establish a claimant assistance program to, among other things, provide to claimants information and legal assistance. Attorneys representing claimants under the draft bill could charge their clients no more than five percent of the final award. The Administrator would be required to submit annual reports to Congress on the claims process and recommend changes if awards exceed or fall below predicted levels. Awards . In order to receive compensation, a claimant would have to show, by a preponderance of the evidence, that the claimant suffers from an eligible disease or condition. In addition, claimants would be required to demonstrate a minimum exposure to asbestos. Claimants would be compensated according to the tiered compensation scheme outlined in the bill. This scheme would set medical criteria and awards for nine levels of asbestos-related injury, with awards ranging from medical monitoring for claimants in Level I (asbestos-related non-malignant disease and five years occupational exposure to asbestos) to $1.1 million for claimants in Level IX (mesothelioma). The bill would also allow claimants suffering from asbestos-related injuries that cannot fit into one of the nine levels to seek compensation for their "exceptional medical claims." One of the more controversial aspects of the effort to reach a legislative solution to the asbestos problem has been the question of smoking. Levels VII and VIII of the tiered compensation scheme both deal with lung cancer, and some have expressed concern that smoking may have contributed to many of these claimants' conditions. As a result, the awards in Levels VII and VIII are pegged to each claimant's smoking history, in that non-smokers would get higher awards than ex-smokers, who would get higher awards than smokers. The Administrator would be required to provide to the claimant a proposed decision within ninety days of the filing of the claim. If unsatisfied with the proposed decision, the claimant would be entitled to seek review by a "representative of the Administrator," so long as the request is made within ninety days of the issuance of the proposed decision. After a review, or if no review is requested within ninety days, the Administrator would issue a final decision. A claimant would then have ninety days to seek judicial review of the final decision in the U.S. Court of Appeals for the circuit in which the claimant resides. Under the bill, a claimant would receive his or her award in structured payments over a three-to-four year period. The amount of the award would have to be reduced by the amount of collateral source compensation and most prior awards made pursuant to the administrative scheme. "Collateral source compensation," however would include only compensation paid by defendants, insurers of defendants, and compensation trusts pursuant to judgments and settlements; it apparently would not include payments from disability insurance, health insurance, medicare/medicaid, etc. Another sticking point in the debate over previous asbestos bills has been the effect any legislative resolution would have on so-called "mixed dust" (i.e., silica and asbestos) claims. Some have expressed concern that, if these claims are not included in the legislation (and therefore removed from the courts), asbestos claimants could avoid the administrative process by re-filing their claims in court as mixed dust claims. S. 852 would remove silica claims from the courts to the bill's administrative process unless those bringing such claims establish by a preponderance of the evidence that exposure to silica caused their impairments and that asbestos did not significantly contribute to their impairments, and submit specific supporting evidence (e.g., x-rays, history of asbestos exposure, etc.). The Fund would be paid for by contributions from defendants in asbestos suits – "defendant participants" – and their insurers – "insurer participants." Defendant participants would be required to contribute, in the aggregate, no more than $90 billion, while insurer participants would be required to contribute no more than $46.025 billion. The Administrator would be authorized to borrow to enhance the Fund's liquidity, to sue any participant for failure to pay any obligation imposed under the bill, and to monitor and take action against participant companies that attempt to transfer their assets through business transactions. Under the bill, if the Administrator determines that the Fund does not have sufficient resources, then the Fund would sunset and claimants with unresolved claims could return to federal or state court. From the date of termination onward, any asbestos or class action trust established to distribute funds pursuant to a final judgment or settlement would be required to adopt the bill's medical criteria. Defendant Participants. Defendant participants would be grouped into tiers and subtiers according to prior asbestos expenditures, except that one tier would be reserved for organizations that have filed for bankruptcy in the year preceding enactment of the bill. These tiers and subtiers would determine the exact amount of each defendant participant's required annual contribution to the Fund, ranging from $27.5 million down to $100,000. A defendant participant would be able to petition the Administrator for adjustments of its obligations in cases of severe financial hardship or "demonstrated inequity," or when the defendant participant can demonstrate that meeting its obligations under the bill would render the company insolvent. In addition, persons or businesses classified as "small business concerns" under section 3 of the Small Business Act would be exempt from these payment obligations. The aggregate annual payments to the Fund by defendant participants would have to be no less than $3 billion for the first thirty years of the Fund. The bill would provide for ten-percent reductions in this minimum amount following the tenth, fifteenth, twentieth, and twenty-fifth years after enactment, unless the Administrator finds that a reduction could endanger the Fund's ability to satisfy future obligations. Further, beginning ten years after enactment, the Administrator would be empowered to suspend all or part of the defendant participants' payments in a given year in which the Fund contains sufficient assets to satisfy that year's obligations. Insurer Participants . S. 852 would establish the Asbestos Insurers Commission—composed of five members appointed by the President with the advice and consent of the Senate—charged with instituting a methodology for determining the amount to be contributed to the Fund by each insurer participant. Insurer participants would be able to appeal such determinations to the D.C. Circuit. The aggregate annual payments to the Fund by insurer participants would be $2.7 billion for the first two years, $5.075 billion for years three through five, $1.147 billion for years six through twenty-seven, and $166 million for year twenty-eight. Beginning ten years after enactment, the Administrator would be empowered to suspend all or part of the insurer participants' payments in a given year in which the Fund contains sufficient assets to satisfy that year's obligations. The bill would require the Administrator to promulgate regulations prohibiting the manufacture, processing, or distribution in commerce of products containing asbestos. The Administrator would be empowered to grant exemptions where doing so would not unreasonably risk injury to the public health or the environment and those seeking the exemptions have made good faith, unsuccessful efforts to find minerals to substitute for asbestos in their products. The bill would specifically exempt from the prohibition: (1) asbestos-containing products necessary to the "critical functions" of the Defense Department or NASA; (2) asbestos diaphragms used in the manufacture of chlor-alkali and its derivatives; and (3) roofing cements, coatings, and mastics containing asbestos that is totally encapsulated by asphalt. The Administrator of the Environmental Protection Agency (EPA), however, would be required to review and possibly revoke this last exemption within eighteen months of enactment of the bill. Under S. 852 , the EPA Administrator would be required to study the exposure risks associated with naturally occurring asbestos, and to develop management guidelines, model state regulations, testing protocols, etc., for naturally occurring asbestos. | This report provides an overview of S. 852, the Fairness in Asbestos Injury Resolution (FAIR) Act of 2005. The bill would largely remove asbestos claims from the courts in favor of the no-fault administrative process set out in the bill. The bill would establish the Office of Asbestos Disease Compensation to award damages to asbestos claimants from the Asbestos Injury Claims Resolution Fund. Companies that have previously been sued for asbestos-related injuries—and insurers of such companies—would be required to make contributions totaling roughly $140 billion to this Fund. |
In the late 1980s, loan loss reserves established by depository institutions were criticized by regulators as being inadequate to cover losses from bad loans. From 1980 to 1992, approximately 2,700 federally insured depository institutions failed, at a substantial cost to the insurance funds and taxpayers. Bad loans for agriculture, energy, less developed countries, and commercial real estate contributed to the large number of failures. In 1992, the condition and performance of the nation’s depository institutions improved substantially. Commercial banks posted record earnings of $32 billion while savings institutions posted aggregate earnings of $6.7 billion, continuing a positive trend that began in 1991. For 1993, this improvement continued with commercial bank profits of $43.4 billion and savings institution profits of $7 billion. Recently, some depository institutions have been criticized by regulators for maintaining more reserves than they need. The management of a depository institution establishes loan loss reserves through periodic provisions or charges to operating expenses. When a provision for loan losses is recorded by management, loan loss reserves increase by a like amount. Loan loss reserves adjust the institution’s loans receivable to reflect amounts that management estimates will not be recovered. When losses associated with loans or portions of loans are confirmed or determined to be certain, the loans or portions of loans are removed from the books of the institution by writing off the loan against the loan loss reserve. This results in removing amounts from the reserve that are associated with the confirmed losses. Loan loss provisions and reserves are key indicators of loan quality that are included in the financial reports of depository institutions. Depositors, investors, and other financial report users rely on these indicators to make decisions about the financial condition of the institution. Regulators evaluate the adequacy of loan loss reserves during on-site, full scope, safety and soundness examinations. These examinations are conducted periodically to identify problems early and control risk. Regulators also monitor reserves through financial reports received between examinations to track institutions’ financial condition and performance. Because of their importance to various users of financial reports, loan loss provisions and reserves need to accurately reflect specifically identified loss exposures as well as other inherent loss exposures in the institution’s loan portfolio. Authoritative accounting rules for financial reporting are primarily established by the Financial Accounting Standards Board (FASB). These accounting rules are referred to as generally accepted accounting principles (GAAP) and are promulgated through the issuance of statements of financial accounting standards (SFAS) by FASB. The American Institute of Certified Public Accountants (AICPA), through its Accounting Standards Executive Committee (AcSEC), issues accounting guidance on issues not otherwise covered in authoritative literature. The Securities and Exchange Commission (SEC) has statutory authority to set accounting principles, but as a matter of policy it generally relies on FASB and the AICPA to provide leadership in establishing and improving accounting principles. However, SEC frequently issues accounting and disclosure regulations to supplement guidance provided by FASB and the AICPA. We have previously reported the existence of significant problems in measuring and accounting for losses from problem loans and regulatory examinations of loan loss reserves. In our study of 39 banks which failed without warning in 1988 and 1989, we found that asset valuations the Federal Deposit Insurance Corporation prepared after the banks failed increased their loss reserves from $2.1 billion to $9.4 billion. Although we acknowledged that several factors contributed to this difference, such as deterioration in loan values subsequent to failure, we concluded that a significant portion of it was caused by institutions making inadequate estimates of loan losses prior to failure. In our assessment of regulatory examinations, we found that the four federal financial institution regulators—the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS)—did not have a uniform risk-based methodology to judge an institution’s loan loss reserves. Examiners lacked a consistent framework to quantify loan portfolio risks such as real estate exposure, unfavorable economic conditions, and deficient loan policies. Methods for assessing loan loss reserves varied among the regulators and the lack of a generally accepted method made it difficult for the regulators to successfully challenge management’s estimates when the examiners believed reserves were inadequate. Our objectives were to determine whether loan loss reserve methodologies used by insured depository institutions resulted in reserve amounts that were justified by supporting analysis and comparable among institutions and accounting standards provided by FASB and regulatory guidance provided by OCC, FRB, FDIC, and OTS were sufficient to promote fair and consistent financial reporting of loan loss reserves among depository institutions. To determine whether loan loss reserve methodologies used by insured depository institutions resulted in reserve amounts that were justified by supporting analysis and comparable among institutions, we conducted case studies of 12 depository institutions, each with total assets over $1 billion, which we judgmentally selected. They are referred to as Institutions A through L in this report. To include a cross section of depository institutions, we selected institutions supervised by OCC, FRB, FDIC, and OTS that were currently being examined or had been examined during the last 12 months. For geographic diversity, we selected institutions located in California, Maryland, New York, North Carolina, Texas, and Virginia. For each institution, we reviewed all major components of the loan loss reserve methodology, including individual loan assessments, analysis of historical experience, and other means used for reserve allocations. In addition, we reviewed the institution’s overall loan loss assessment, including the criteria and methods used to estimate losses for both commercial and consumer loans. To accomplish our work, we reviewed examination working papers for loan loss reserves and the institution’s loan loss reserve documents, when they were available. We also conducted detailed interviews with the regulatory examiner-in-charge and/or management to discuss the institutions’ loan loss reserving methodologies and the application of accounting rules and regulatory guidance. To determine whether accounting standards and regulatory guidance were sufficient to promote fair and consistent financial reporting, we reviewed all relevant accounting and regulatory guidance for establishing loan loss reserves. This included SFAS No. 5, Accounting for Contingencies; SFAS No. 15, Accounting by Debtors and Creditors for Troubled Debt Restructurings; SFAS No. 114, Accounting by Creditors for Impairment of a Loan; AICPA audit and accounting guides for banks and savings institutions; OCC Banking Circular 201, Allowance for Loan and Lease Losses; FDIC May 1991 Policy Memorandum for Allowance for Loan and Lease Losses; examination manuals for each of the four federal regulators; and the Securities and Exchange Commission’s Financial Reporting Release No. 28, Accounting for Loan Losses by Registrants Engaged in Lending Activities. Each of the four federal depository institution regulators and FASB provided written comments on a draft of this report. These comments are presented and evaluated in chapter 2 and are reprinted in appendixes I through V. Our work was performed between November 1992 and March 1994 in accordance with generally accepted government auditing standards. The 12 depository institutions we reviewed used markedly different methods to establish their loan loss reserves, which resulted in incomparable reserves, and, in most cases, significant portions of their reserves were not justified by supporting analyses. Most of the institutions based large amounts of their reserves on loss history. Historical loss rates provide a valuable basis for estimating future losses and can be appropriately used to establish reserves for nonproblem loans and smaller-balance pools of loans. However, the methods used by the institutions to determine and apply historical loss experience did not consistently identify and measure loan loss exposure, which resulted in incomparable reserve amounts. In addition, historical loss rates were routinely applied to establish reserves for individual problem loans even though individual loan assessments provide the most accurate means to identify and measure loss exposure for such loans. Finally, most of the institutions maintained large supplemental reserves which were not linked to quantitative analyses of loss exposure or other evidence that demonstrated that the amounts were needed to cover likely loan losses. Neither accounting standards nor regulatory guidance provided sufficiently detailed direction about how loan loss reserves should be established to ensure that reserves are clearly justified and comparable among institutions. Given such flexibility, the institutions used widely diverse loan loss estimating methods that resulted in incommensurable reserves and also reserves that may not have reflected the true risk of loss in their loan portfolios. Loan loss reserves that cannot be compared or that misrepresent risks in loan portfolios impede investors, creditors, depositors, regulators, and other users of financial reports from understanding the true financial condition of depository institutions. Such reserving practices also impede early warning of changes in an institution’s financial condition and timely regulatory actions to protect the banking and savings and loan insurance funds. The primary purpose of financial reporting is to provide information to report users which they can utilize in making investment, credit, and similar decisions. Statement of Financial Accounting Concepts (SFAC) No. 2, Qualitative Characteristics of Accounting Information (FASB, May 1980), discusses criteria that are necessary for accounting information to be useful for making business and economic decisions. Reliability and comparability are two of the major criteria discussed in the statement. SFAC No. 2 states that accounting information is reliable to the extent that users can depend on it to reflect the economic conditions or events that it purports to represent. Reliability of accounting information stems from representational faithfulness and verifiability. In other words, to be reliable, accounting information must be verifiable and directly related to the economic resources and obligations of the enterprise, as well as to transactions or events that change those resources or obligations. With regard to comparability, SFAC No. 2 states that information concerning an enterprise gains greatly in usefulness if it can be compared with similar information about other enterprises and with similar information for different periods of time or points in time for the same enterprise. The significance of information, especially quantitative information, depends to a great degree on the user’s ability to relate it to some benchmark. One of the principal reasons for accounting standards is the desire for such benchmarks for purposes of making financial comparisons. Loans are the largest single component of most depository institutions’ assets; therefore, loan loss reserves and related provisions are critical to understanding the financial condition of a depository institution, including identification of changes in its credit risks and exposures. Provisions directly affect an institution’s current earnings and represent the amount necessary to adjust the loan loss reserve to reflect estimated uncollectible loan balances outstanding. In theory, as the risks and exposures from uncollectible amounts in the loan portfolio increase or decrease, this should be reflected by a corresponding increase or decrease in the provision and reserve. Because of their importance as indicators of financial condition, loan loss provisions and reserves must reliably reflect estimated losses in the loan portfolios of institutions and be subject to meaningful comparison. The loan loss reserve must be sufficient to cover both specifically identified loss exposures as well as other inherent loss exposures in the institution’s portfolio. Therefore, an adequate reserve hinges on (1) timely identification and analysis of loss exposures on impaired loans, and (2) analysis of loss exposures on unimpaired loans considering past trends and current conditions. Loss exposures on larger balance impaired loans are generally best evaluated using individual loan assessments, which include detailed review of the financial condition of the borrower, loan payment history, fair value of collateral, loan guarantees, and other relevant information. In contrast, loss exposures on unimpaired loans and smaller-balance loans are generally best evaluated on a group basis by assessing historical loss experience for pools of loans with similar characteristics, adjusted for changes in economic and business conditions which affect the institution’s lending operations. All 12 institutions regularly reviewed their commercial loans individually as part of assigning risk ratings or grades for credit quality to these loans. However, to establish reserves for commercial loans that were identified as problem loans through this process, most of them routinely reverted to loss history in lieu of using individual loan assessment results or to supplement the results. We were not able to determine the percentage of the institutions’ total reserves that were established using these approaches because the amounts could not be sufficiently segregated from other reserves based on historical losses, including reserves for pools of nonproblem loans. However, based on our review of the institutions’ policies, discussions with management or examiners, and review of samples of problem commercial loans, we found that historical losses were reverted to in lieu of or in addition to individual problem loan assessments in the following cases. Institutions D and E used average historical loss rates that closely resembled loss rates for the overall banking industry in place of individual loan assessments. Institution D always used these rates to set reserves for problem commercial loans. Institution E used the loss rates only when they resulted in more reserves than the individual assessments. Institutions A, B, and H used their own historical loss rates to establish reserves for individually assessed loans when the rates resulted in more reserves than the individual assessments. Institution G used its own historical losses to establish reserves for individually assessed loans when no loss exposure was identified by the individual assessments. Institutions C, F, I, and K used detailed assessments to establish specific reserves for individual loans. These institutions used their own loss history to establish additional reserves over and above reserves determined from the detailed assessments. In at least one case, these additional amounts were intended to cover possible deterioration in the current fair value of the loan’s collateral. Because individual loan assessments provide the most accurate means to identify and measure loss exposure for larger-balance impaired loans, the use of historical losses by the institutions in place of or in addition to individual assessments may have overstated or understated reserves for these loans and thus misrepresented the risk in their loan portfolios. For example, the collateral gap for one problem commercial real estate loan we reviewed at Institution D was $21.2 million. Because there was no evidence in the loan examination file we reviewed that other payment sources, such as loan guarantors, could be relied upon to cover this gap, we determined that the loss exposure for the loan was the full $21.2 million. However, as shown in table 2.1, the reserve that was established by Institution D with loss rates that closely resembled industry averages was only $8.1 million. We believe that this $13.1 million difference represented a material understatement of Institution D’s loss exposure. Also, as shown in table 2.1, had this same loan been in the portfolio of Institution E, reserves would have likely covered most if not all of the $21.2 million deficiency. This is because Institution E’s policy was to reserve for the greater of estimated losses based on loss rates which closely resembled industry averages or individual loan assessments. Institution F, under its policy, would have likely established reserves for the entire $21.2 million deficiency noted above plus an additional $2.4 million, based on its own loss history, to cover possible deterioration in collateral value. The use of historical industry loss rates, or even historical loss rates for the institution, in place of individual loan assessments can just as easily materially overstate loss exposure on an individual problem loan where the collateral value or other payment source sufficiently covers the outstanding loan balance. For example, another commercial real estate loan we reviewed at Institution D had an outstanding balance of $21.5 million, and the appraised fair market value of the loan’s collateral was $25 million. Notwithstanding the fact that the collateral adequately covered the loan balance, the institution reserved $4.3 million for this loan as a result of using loss rates which closely resembled industry loss rates. Historical losses based on industry averages or an institution’s own past experience do not accurately reflect the specific borrower’s current financial condition, ability to make timely loan payments in the future, the current fair value of loan collateral, or other payment sources. As a result, the historical loss factor cannot identify potential loss in a specifically identified impaired loan as reliably as a detailed assessment. The use of historical loss rates in place of individual loan assessment results or to supplement such results can produce unreliable reserves and misrepresent the level of losses present in individually assessed loans. Historical loss analysis can provide useful indications about how large groups of homogenous loans have performed in the past. This type of analysis can be used as a basis to estimate inherent losses on nonproblem commercial loans, as long as the estimate is appropriately adjusted in a verifiable manner to reflect current characteristics of the loan portfolio. Such analysis is also effective for estimating inherent losses in smaller, low-risk loans such as consumer loans. All of the institutions used historical losses to establish reserves for loans that were not individually assessed. As previously discussed, most of the 12 institutions also used historical losses in some form to establish reserves for specifically identified problem loans even when individual loan assessments were performed. Thus, significant amounts of the reserves of most of the institutions were based on historical losses. However, because the methods used to determine and apply these historical losses varied widely the resultant reserve amounts were not comparable among the institutions. As shown in figure 2.1, the 12 institutions used loss history to establish from about 11 percent to 87 percent of their total loan loss reserves. Nine of the institutions relied on loss history to determine 40 percent or more of their total reserves. As shown in table 2.2, the major methods that were used by the institutions to determine historical loss rates ranged from a relatively simple approach which used actual losses for 1 year to a relatively complex method known as migration analysis. Migration analysis is a process by which loans are tracked and recorded by the institution as they move through various risk grades until they are charged-off as losses. Using migration analysis, an institution can estimate losses for the current year and subsequent years for loans in each loan grade. As noted in table 2.2, Institutions B, C, I, and J used migration analysis to derive historical loss factors for their commercial loan portfolios. Most of the other institutions used either actual charge-offs over a relatively short time period or average annual charge-offs to compute historical loss rates. Generally, institutions that use annual charge-offs to develop historical loss rates attempt to identify losses that are likely to be confirmed and charged-off over the coming year. In contrast, institutions can use methods such as migration analysis to attempt to capture losses that will likely be confirmed and charged-off during the life of the loan portfolio. Because commercial loans can have maturities beyond 1 year, the loss rates developed using methods such as migration analysis will generally cover a longer period and, therefore, will be greater than rates based solely on annual charge-offs. The institutions also used markedly different time periods of past experience to determine historical loss rates. As shown in table 2.2, the institutions’ historical bases ranged from 1 year to 10 years for commercial loans and from 3 months to 6 years for consumer loans. The objective of using longer time periods to determine historical loss rates is to preclude a particularly good or bad year from having an inordinate effect on the institution’s current reserves. Ideally, a sufficient number of years should be used so that historical loan performance can be gauged over the course of the institution’s economic cycle. However, the objective of using shorter time periods such as 1 year is typically to reflect only an institution’s most recent loss experience. Reserves based on several years’ losses can be significantly different than reserves based on the most recent 12 months, which could be a particularly good or bad year. For example, for one institution we reviewed, the average charge-off rate was 1 percent of total loans from 1989 through 1992. Had the reserves been based on this average, they would have amounted to about 13 percent of the institution’s capital at the end of 1992. However, had the reserves been based on charge-offs for the most recent 12 months, which amounted to 2.6 percent of total loans during 1992, the institution would have established reserves of about 33 percent of 1992 capital. Clearly, in this case, the use of the average charge-off rate would have resulted in significantly different loss estimates than use of the most recent charge-off rate. Finally, most of the institutions used their own loss history to develop historical loss rates. However, as mentioned previously, Institutions D and E used rates that closely resembled industry averages to establish reserves. The industry averages were developed by the institutions’ federal regulator, with no adjustment for differences in loan policies, loan administration practices, portfolio composition, or economic conditions affecting individual institutions. Loss reserve methods that rely predominantly on standard industry loss percentages are likely to create misleading loan loss provisions and reserves because they do not consider the particular characteristics of the institution’s loan portfolio. In addition, the use of such percentages creates reserves that are not comparable to reserves of institutions which use their own loss experience to estimate losses. For example, Institution H’s loan loss reserve for commercial loans, which was based largely on its own loss history, totaled approximately $708 million. However, application of the loss rates used by Institution D to Institution H’s commercial loan portfolio balances, would have increased its reserve for commercial loans to about $1,139 million, or by 61 percent. These inconsistencies in the application of historical loss experience to determine current reserve estimates resulted in wide disparities in reserves among institutions. These disparities were exacerbated by the fact, as stated previously, that most of the institutions used historical loss experience as their primary means to estimate loan loss reserves. The resultant incomparability in reserves can be a major impediment to financial report users, as it hampers their ability to assess the true financial condition and relative health of depository institutions. Supplemental reserves are reserves established by management over and above amounts determined by analyses of individual loans and loss history. Although supplemental reserves may be needed to cover specific loss exposure not identified by individual loan assessments and loss history, they can conceal the true condition of an institution’s loan portfolio and distort its earnings and capital position if used inappropriately. Further, unjustified supplemental reserves are not comparable to reserves that reflect only estimates of likely losses. As shown in figure 2.2, supplemental reserves comprised over 30 percent of the total loan loss reserves for 7 of the 12 institutions we reviewed. In most cases, the supplemental reserves were not quantitatively linked to an analysis of loan loss exposure nor was there adequate support to demonstrate that they were based on reasonable estimates of likely losses. The rationale for supplemental reserves varied among institutions. We were told by management or examiners that the supplemental reserves were intended to adjust loss history for current conditions, provide a cushion for future uncertainties, or appease regulators. Regulatory examiners for two institutions told us that the supplemental reserves resulted, in part, from management not reducing reserve amounts recorded in the institutions’ records to reflect the most recent estimates of loss exposure. By categorizing the differences between current loss exposure estimates and their recorded reserves as supplemental reserves, these institutions avoided taking a negative loan loss provision. Although two institutions linked a portion of their supplemental reserves to specific portfolio risk analyses, the majority of supplemental reserves were not adequately linked to specific loss exposure. Explanations provided by management or examiners for supplemental reserves generally did not demonstrate that the reserves were justifiable loan loss estimates. Several examples of substantial supplemental reserves that were not adequately linked to loan portfolio risk and likely losses follow. Institution B built its supplemental reserve to about 40 percent of its total loan loss reserve after federal regulators directed it to increase its reserve after an examination in 1992. In the third quarter of 1992, the institution’s detailed analysis of loan losses indicated that it needed an additional $301 million in loss reserves. However, the regulator required the institution to take a loss provision of $400 million and increase its loan loss reserve by a like amount. According to a senior management official, although not justified by the institution’s loan portfolio analysis, management agreed to take the additional $99 million provision to comply with the regulator’s decision. Even though the institution’s detailed analysis of its loan portfolio in the 3 subsequent quarters indicated that it had sufficient loan loss reserves, it continued to charge earnings by taking additional provisions each period with the encouragement of the federal regulator. At the end of the second quarter of 1993, the institution’s reserve was about $612 million over what was justified by its own loan portfolio analysis. This amounted to about 15 percent of capital and exceeded the previous year’s earnings by over 80 percent. Institution L’s supplemental reserve comprised about 48 percent of its total loan loss reserve. Documents prepared by the institution indicated that most of this reserve was considered to be excess. The federal regulatory examiner for the institution told us that he believed the institution used the excess reserve as a plug or cushion for the difference between the reserve that was needed to cover estimated losses and the reserve recorded in its books. Although the federal regulator did not criticize the level of the institution’s reserve, the state regulator believed that it was too high. According to the federal regulatory examiner, the institution was not directed to adjust its reserve but requested to adequately support all supplemental reserve components in the future. Institution H’s supplemental reserve comprised about 44 percent of its total loan loss reserve. This amounted to about 8 percent of its capital and 56 percent of its earnings. Neither the institution nor the federal regulator demonstrated that the supplemental reserve was based on reasonable estimates of likely losses. According to management officials, most of the supplemental reserve was established through management judgment and consensus and was intended to cover possible losses associated with anticipated bulk sales of some of the institution’s bad loans, potential errors in loan grading, inexperience with acquired banks, and local and national economic conditions. However, there was no linkage of these factors to reserve amounts in the analyses we reviewed. Further, factors used to set supplemental reserves for specific types of loans were not supported. One official stated that the institution maintains a large supplemental reserve, in part, to “keep the regulators happy.” He stated that regulatory examiners have relied on “rule of thumb” percentages to determine reserve adequacy and have been more comfortable when the institution maintains a large reserve. Institution E had a supplemental reserve that comprised about 32 percent of its total loan loss reserve. Management officials chose to keep the supplemental reserve at current high levels to protect the institution against credit concentrations and possible economic swings even though they had noted that each of the institution’s loan quality indicators had improved. Management officials stated that the large supplemental reserve was added to the current loan loss estimate, in part, to make the estimate equal to the reserve recorded in the institution’s records. This enabled the institution to avoid adjusting the recorded reserve downward to reflect the current estimate of loss exposure. The supplemental reserve amounted to about 73 percent of earnings and 6 percent of capital. Large supplemental reserves can mask changes in an institution’s loan portfolio that are critical to understanding its financial condition. Previously established supplemental reserves can be used to absorb current increases in estimated losses. In such instances, an institution can avoid increasing its current loan loss provision and reserve to reflect the deterioration in the portfolio. In these cases, neither the institution’s current loss provision nor changes in existing reserves would be reliable indicators of the increased risk in its loan portfolio. Large supplemental reserves can also overstate risk by inappropriately hiding improvements in an institution’s loan portfolio. Table 2.3 illustrates hypothetically how supplemental reserves can conceal current loan portfolio deterioration as well as improvement. As shown in table 2.3, by taking loan loss provisions during years when the recorded reserve is greater than estimated loss exposure, the institution can build a substantial unjustified supplemental reserve. The build-up of the supplemental reserve not only masks the improvement in the condition of the loan portfolio during years 1 through 3, but also enables the institution to conceal the significant increase in loss exposure which occurs during years 4 and 5. Loss exposure increases by 60 percent between years 3 and 5; however, the loan loss reserve increases by only about 9 percent. As a result of the unjustified supplemental reserve, neither the institution’s annual provisions nor changes in its recorded loan loss reserve balances reflect the significant changes which occur in the quality of its loan portfolio. In order for institutions’ loan loss reserves and related provisions to provide reliable information about the quality of their loan portfolios, these loan quality indicators must coincide with the institutions’ verifiable estimates of loss exposure. The use of large unjustified reserves undermines the credibility of these important financial condition barometers. As previously noted, 7 of the 12 institutions we reviewed had supplemental reserves which totaled at least 30 percent of their total reserves. Conceivably, these institutions could use these reserves to absorb increases in estimated loan losses and not record loss provisions or adjust reserve levels to reflect changes in the condition of their portfolios for several periods. Conversely, if their loan portfolios were improving and they continued to build supplemental reserves by maintaining the same levels of provisions and reserves as in prior periods, these loan quality indicators would not reflect this improvement. Some amount of supplemental reserve may be needed to cover specific loss exposure over and above that identified by analysis of individual loans and loss history. However, an unjustified supplemental reserve can be used to manipulate earnings and capital position and, therefore, distort financial reports such that investors, creditors, depositors, regulators, and other report users do not have a clear basis for making decisions about the financial condition of an institution. This lack of transparency is compounded when financial statement users attempt to compare institutions whose reserves are not comparable because they use significantly different approaches to establish reserves. As a result, institutions that use unjustified supplemental reserves can seriously compromise both the reliability and comparability of financial information: two key elements of useful financial reporting. Accounting and regulatory guidance for the establishment of loan loss reserves is too flexible to ensure reserves are determined in a consistent and reliable manner. Only broad authoritative accounting standards exist for establishment of overall loss reserves, and they have been applied liberally in practice. Regulatory guidance discusses the types of risks that need to be considered in setting reserves; however, the guidance does not provide sufficient information about how risks should be quantified and linked to reserve allocations. Further, guidance provided by the four federal regulators is not always consistent. The lack of adequate standards has resulted in reserve amounts which cannot be meaningfully compared among institutions and which may not represent the true level of risk in institutions’ loan portfolios. The primary authoritative accounting literature governing establishment of overall loss reserves is SFAS No. 5, Accounting for Contingencies. Although SFAS No. 5 states that provisions for losses should be made only when losses are probable and can be reasonably estimated, neither it nor any other authoritative accounting literature provides guidance or establishes parameters to ensure that loan loss history and other factors that are used to identify losses meet these two conditions. Recently, FASB issued SFAS No. 114, Accounting by Creditors for Impairment of a Loan. SFAS No. 114 provides loss recognition and measurement criteria for individual loans that are identified for evaluation of collectibility. The statement specifies that, for loans which are individually assessed, impairment should be measured on the basis of the present value of the loan’s expected cash flows, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. SFAS No. 114, however, does not specify how a creditor should identify loans that are to be individually assessed for collectibility, address how an institution should determine loss reserves for loans that are not individually assessed, or provide additional guidance for the establishment of overall reserves. Therefore, while SFAS No. 114 provides specific guidance for determining when a loan has been impaired and how to quantify the impairment, it does not resolve the problems we identified in our review. Further, while the guidance in SFAS No. 114, if properly implemented, may be an improvement over current practice for assessing individual impaired loans, it will still lead to inconsistencies in establishing reserves, particularly for collateral dependent loans. The three alternative approaches under the statement could result in very different loss estimates for the same loan because the fair value of the loan collateral could be quite different from the current market price of the loan. The current market price, in turn, is also likely to be different from estimated discounted cash flows to be received from the borrower. In addition, the timing of cash receipts may be difficult to predict. In commenting on the Exposure Draft for SFAS No. 114, we advised FASB of our view that fair value accounting should be required for all collateralized problem loans, which would eliminate this inconsistency. We believe that the fair value of collateral is the most objective and accurate measure to use to determine the loss exposure on a collateral dependent impaired loan. Regulatory guidelines developed by the four federal regulators are not consistent and generally lack specific direction for the establishment of overall loan loss reserves. The guidelines for three of the regulators state that loan loss reserves must be adequate to absorb all estimated losses that meet SFAS No. 5’s two conditions for loss recognition; however, one regulator’s guidelines do not mention these criteria. Regarding the use of loss history, none of the regulatory guidelines explain the merits and limitations of using migration analysis over other approaches to identify and measure losses that are probable and estimable. Further, while the guidelines for two of the regulators do not address the number of years that should be included in determining historical losses, one regulator recommends 5 years and another requires 3 years. Regarding the way loss history should be applied to set reserves for loans, one regulator’s guidelines clearly state that loans individually assessed should not receive reserve allocations based on loss history. However, the guidelines for another regulator require institutions to add reserves to those determined from individual loan assessments. A policy official for the regulator told us that institutions are required to add reserves for the fully collateralized portion of individually assessed problem loans. Two regulators do not specifically address the application of historical information to individually assessed loans in their guidelines. Some of the requirements and suggested procedures in the regulators’ guidelines promote the establishment of reserves over and above losses that are clearly probable and based on reasonable loss estimates. Although each of the regulator’s guidelines list a number of valid factors that an institution should consider in setting reserves, no discussion is included in any of the guidelines about how such factors should be assessed to ensure that all amounts allocated to the loan loss reserve are for likely losses and supported by verifiable analysis. Further, one regulator’s guidelines encourage institutions to use supplemental reserves to cover errors in the loss estimating process but do not provide parameters for establishment of such reserves. Management officials of three institutions told us that better guidance is needed for loan loss reserves. Officials of the first institution stated that accounting and regulatory guidance is not helpful to institutions in setting reserves because they do not address how various subjective factors should be measured. They also stated that there is too much variation in how reserves are established by institutions and that such variation needs to be addressed by accounting and regulatory guidance so that loss reserves are comparable among institutions. Officials of the second institution stated that regulators and management are frustrated because there is no consistent approach to establishing loan loss reserves. They stated that one regulator goes beyond GAAP by requiring the institution to set reserves for fully secured portions of loans. A management official of the third institution stated that the guidance needs to include standards for the use of loss history so that institutions use a common basis for establishing loan loss reserves. The lack of accounting and regulatory standards for establishment of overall loan loss reserves has led to the evolution of a hodgepodge of accounting practices with no clear and common objectives. Without adequate accounting and regulatory standards, management of depository institutions are afforded excessive flexibility in establishing loan loss reserves, and regulators may be prone toward arbitrary determinations of required reserve levels. On December 21, 1993, OCC, FRB, FDIC, and OTS issued an interagency policy statement for loan loss reserves. The statement supplements existing regulatory guidance and is intended to provide consistent approaches among the regulators to assess reserve adequacy. The statement clearly states that an institution’s reserves must be maintained at a level to absorb estimated losses that meet the loss criteria of GAAP. Therefore, each of the regulators acknowledge that provisions and reserves must be adequate to cover losses that can be reasonably estimated and that will likely occur as stated in SFAS No. 5. The interagency statement, however, does not adequately address the problems we identified in our review—reserves not being comparable and possibly misrepresenting portfolio risk because of the use of loss history to supplement individual loan assessment results, inconsistent use of loan loss history, and unjustified supplemental reserves. According to the statement, the institution should rely primarily on an analysis of the various components of its portfolio to determine reserves, including analysis of all significant credits on an individual basis. For individual loans, however, it does not prohibit or discourage institutions from using loss history to supplement reserves determined from specific detailed assessments. Further, it does not state whether institutions should reserve for portions of individual loans that are adequately covered by collateral. As previously discussed, institutions’ use of loss history in place of individual loan assessment results can significantly overstate or understate loss exposure for problem loans and produce reserves that are not comparable. Although the interagency statement states that losses should be estimated over the remaining effective lives of loans classified substandard and doubtful, it does not provide specific guidance or minimum requirements for the use of migration analysis or other techniques to ensure that losses are estimated in this manner. Rather, the statement states that methods for determining historical losses can range from a simple average over a relevant number of years to more complex techniques, such as migration analysis. No discussion is included regarding what constitutes a relevant period of years for computing loss averages for loans or what must be done to ensure that all institutions consistently measure losses for the lives of their current loan portfolios. As previously discussed, numerous inconsistencies in the determination of historical loss experience created disparities in reserves among institutions. Finally, according to the interagency statement, management’s analysis of loan loss reserves should be conservative and include an “additional margin” so that overall reserves reflect the imprecision inherent in most estimates. In addition, the statement lists numerous factors that management should consider that are likely to cause current estimated losses to differ from historical loss experience. As previously discussed, most of the institutions’ reserves were comprised of significantly large supplemental reserves which were not adequately justified. This resulted in reserves which were not subject to meaningful comparison and which may have distorted the true condition of the institutions’ loan portfolios. We believe the statement will encourage institutions to continue to use large unjustified supplemental reserves because it does not emphasize that inherent imprecision in loss estimates can result in overstatements as well as understatements of actual losses. As a result, institutions will be encouraged to add to their estimates to cover potential error even if the estimates are too high. Further, no discussion is included in the guidance to ensure that allocations to reserves are linked to the specified factors in a reasonable and verifiable manner and that the factors are used only to identify and measure likely losses. Current loan loss reserve practices used by the 12 depository institutions we reviewed often did not result in meaningful assessments of the risk of loss due to uncollectible loan balances. In addition, the flexibility in accounting for loan loss reserves resulted in incomparability of reserves among the depository institutions and gave them the opportunity to use reserves to manipulate their operating results and capital. While establishment of reserves will always require some degree of management judgment, it should not be an exercise in total management discretion, nor should it be subject to arbitrary regulatory adjustments. However, until more specific standards are established by authoritative accounting bodies, incomparable and potentially unreliable reserves will continue to hamper the usefulness of financial reports of depository institutions. We recommend that FASB, in close consultation with OCC, FRB, FDIC, and OTS, develop a comprehensive standard for establishment of loan loss reserves, which includes a requirement that reserves for all large impaired loans be based on detailed individual assessments, and no specific reserve amounts in excess of those determined from such assessments should be allowed for those loans. For collateral dependent commercial loans, a reserve should be established to cover the difference between the outstanding loan balance and the estimated recoverable amount from the collateral based on an assessment of the collateral’s fair value; guidance regarding the use of historical analyses to estimate inherent losses existing in the portion of the portfolio which has not been specifically analyzed for impairment. Such guidance should address methods of analyses as well as the appropriate time periods of historical data to be included; and a requirement that all portions of the reserve, including any supplemental amounts, should be directly linked to and justified by a comprehensive documented analysis of current loss exposure in the loan portfolio and that the periodic provision for loan losses adjust the reserve balance to the level determined necessary by such an analysis. Each of the four federal depository institution regulators and FASB commented on the report. The regulators generally shared our concerns about the need to adequately identify and measure loan losses. However, FDIC, FRB, and OTS indicated that, from a regulatory perspective, it was beneficial for institutions to maintain supplemental reserves and, in some cases, add-on reserves for individually assessed impaired loans. In addition, they expressed their view that recently issued regulatory and accounting guidance discussed in the report are generally sufficient to address our concerns. OCC generally supported our recommendation that FASB address deficiencies in GAAP for the determination of loan loss reserves, but stated it believes that the existing body of regulatory guidance provides an appropriate framework for banks to determine an adequate level of reserves and examiners to evaluate the sufficiency of those reserves. FASB disagreed with our conclusion that the lack of accounting and regulatory standards for establishment of loan loss reserves has led to the evolution of a hodgepodge of accounting practices with no clear and common objectives. It stated that it believes that SFAS No. 5 establishes a broad set of clear and common objectives which can be applied to recognizing loan losses. It also stated that if creditors ignore those objectives, “hodgepodge” accounting certainly could be the result. However, FASB’s response differed significantly from the responses of some of the regulators with regard to the objectives of establishing loan loss reserves. Further, although the regulators’ responses were often similar, we noted key differences in how they characterized various aspects of their interagency and other regulatory guidance. We believe that these differences between FASB and the regulators, and among the regulators themselves, reflect the potential for inconsistent interpretations of current accounting and regulatory standards and underscore the need for more definitive, comprehensive authoritative accounting guidance for the establishment of loan loss reserves. In addition, we believe the general support of FDIC, FRB, and OTS for reserving approaches that include supplemental and add-on reserves is further symptomatic of uncertainty over how to best identify and measure probable existing loan losses. We further believe that reserve shortfalls as well as excesses are likely to result from this uncertainty, since fluctuations in loan quality are not being effectively reflected by the reserving methodologies currently used by institutions and examiners. The draft of this report sent out for comment also included a recommendation to the regulators to implement the principles of our recommendations to FASB if FASB did not act to adopt those recommendations. After consideration of the differences in responses to the report among the regulators, including the differences in interpretations of existing joint regulatory guidance, we decided to delete the recommendation to the regulators in the final report. However, we encourage the regulators to support FASB in its efforts to develop a comprehensive accounting standard for establishment of loan loss reserves. The following sections include summaries of the comments we received from FASB and the regulatory agencies on our conclusions and recommendations and our evaluation of those comments. The written comments we received from FASB, FDIC, FRB, OCC, and OTS are reprinted in appendixes I through V, respectively. Our comments on additional issues raised by the four regulators and FASB are also included in these appendixes. It should be noted that, in the case of FASB, although our draft report was circulated to all Board members, its written comments do not represent FASB’s official position. The Board takes formal positions on accounting matters only after appropriate due process. In that regard, FASB stated its Financial Accounting Standards Advisory Council would include the issues discussed in the report as a potential project in its 1994 survey questionnaire. FASB and OCC generally agreed with our first recommendation that reserves for all large impaired loans should be based specifically on detailed individual loan assessments. However, they also stated that review of loans with similar risk characteristics on an aggregated basis is acceptable. FDIC and OTS agreed that significant impaired loans should be individually assessed and stated that such assessments are recommended by existing regulatory guidance. However, OTS also believed additional reserves over and above those based on individual assessments should be provided in some cases. FRB stated that basing reserves on individual loan assessments of large impaired loans was required under existing regulatory guidance and is standard banking practice, but also advocated consideration of standard industry loss percentages in establishing reserves for individual problem loans. In responding to our first recommendation, FASB indicated that SFAS No. 114, which applies to all large loans that are impaired, requires that impairment of those loans be measured on a loan-by-loan basis, unless the loans have common risk characteristics. In that case, FASB stated SFAS No. 114 allows the use of aggregation techniques to measure impairment of loans with common risk characteristics. FASB also indicated that if a creditor measures and recognizes impairment for a particular loan in accordance with SFAS No. 114 and SFAS No. 5, any additional loss recognition for that loan would not be appropriate. Therefore, FASB stated it expects that many of the issues raised about individual measurement in the report will be resolved, or at least mitigated, when financial institutions adopt SFAS No. 114. OCC made similar comments with regard to aggregation techniques in responding to the first recommendation. OCC generally agreed that banks should analyze all significant doubtful credits individually and attempt to estimate probable loss associated with each loan. However, it stated that as a practical matter, loan-by-loan estimates are not always possible, even for loans that are classified doubtful and especially for loans that are classified substandard. Therefore, OCC believes that an estimate based on the bank’s own historical loss experience on a pool of similar loans (adjusted for changes in conditions and trends) is an acceptable, and often more realistic, alternative. We agree that the type of aggregation techniques described by FASB and OCC can provide meaningful estimates of losses on impaired loans with similar risk characteristics. However, the individual impaired loans we reviewed which were held by the institutions in our sample were large commercial real estate loans. These loans generally have different types of collateral, borrower characteristics, loan terms, and geographic locations. The loans we reviewed had all been assessed individually by the institutions and by the examiners for purposes of loan classifications, and in most cases sufficient information was available to estimate probable losses. Nonetheless, many institutions reverted to establishing reserves based on loss history in lieu of or in addition to using the results of these individual assessments for large impaired loans. The report includes examples of how these practices can distort the loss exposure in individual loans and resulted in reserves that could not be meaningfully compared among institutions. SFAS No. 114 does not specifically preclude institutions from using loss history factors to add on to reserves established based on individual loan assessments. In addition, SFAS No. 114 does not specify how a creditor should identify loans to be evaluated for collectibility. We believe this provides institutions with the flexibility to structure identification criteria such that certain impaired loans would be excluded, thereby allowing continued use of historical factors and other methods to set reserves for large impaired loans. Therefore, we do not agree with FASB that SFAS No. 114 resolves or mitigates the issues relative to individual loan assessments raised in the report. In its comments on our first recommendation, FDIC stated that the 1993 Interagency Policy Statement, its own guidance, and SFAS No. 114 already require institutions to assess all significant credits on an individual basis. FDIC also stated that the Federal Financial Institutions Examination Council’s (FFIEC) Request for Comment on Implementation Issues Arising From New Loan Impairment Accounting Rule, which was issued on May 13, 1994, states that the federal regulators do not plan to automatically require reserves over and above those established using SFAS No. 114 criteria. OTS made similar comments in response to our first recommendation, but also specifically stated it disagreed with the portion of the recommendation that indicates that no specific reserve amounts over and above those based on detailed individual assessments of large impaired loans should be allowed. OTS stated that there may be losses inherent in any pool of assets, including pools of loans that have been individually assessed. It went on to say that certain individually assessed loans still pose sufficient risk to an institution to warrant an additional reserve. As a result, OTS believes it is appropriate to use both individual loan assessments and broader assessment techniques which incorporate risk factors that are not loan specific to establish reserves for large impaired loans. As discussed in the report, the 1993 Interagency Policy Statement referred to by FDIC and OTS does state that an institution should rely primarily on an analysis of the various components of its portfolio to establish reserves, including an analysis of all significant credits on an individual basis. The statement also clearly states that an institution’s reserves must be maintained at a level to absorb estimated losses that meet the loss criteria of GAAP. However, as discussed in the report, the statement does not prohibit or discourage institutions from using loss history to supplement reserves determined from specific detailed assessments. Additionally, while FFIEC’s May 13, 1994, Request for Comment does state that the federal regulators do not plan to automatically require reserves over and above those established using SFAS No. 114 criteria, it also states that an additional allowance on impaired loans may be necessary based on consideration of institution-specific factors, such as historical loss experience. The implication of this statement appears to be that under certain circumstances it is appropriate for institutions to establish reserves for large impaired loans over and above what is determined necessary from detailed individual loan assessments. OTS’s comments indicate that it takes this viewpoint. We believe this flexibility and inconsistency in regulatory policy will continue to promote inconsistent and, at times, inappropriate, reserving practices for large impaired loans. FRB stated that the approach we advocate with regard to large impaired loans has been general banking practice for many years and is consistent with SFAS No. 114. FRB further stated that estimating the collectibility of large impaired loans on an individual basis is inherently judgmental and any single institution has limited historical experience with which to assess fully the many factors that affect the collectibility of an individual credit. Thus, institutions and examiners should also consider the loss experiences of other lenders on similar problem loans. Our findings do not support FRB’s contention that the use of individual loan assessments to set reserves for large impaired loans has been general banking practice for many years. As stated in the report, most of the institutions in our sample reverted to loss history in lieu of using individual loan assessment results to establish reserves for problem commercial loans. In addition, the two banks in our sample that were regulated by FRB used average historical loss factors which appeared to be based on industry averages as the basis to establish their reserves, including those for large impaired loans. Individual loan assessments were performed on these loans, but were often used only to determine the loan classifications. Standard percentages were then applied based on these classifications to establish the reserves. As stated in the report, standard industry loss percentages do not consider the particular characteristics of the institution’s loan portfolio. We demonstrated in the report how the use of such industry averages can both understate and overstate reserves on large impaired loans. In its comments, OCC agreed with our position on this issue. Regarding our second recommendation that guidance is needed for the use of historical analyses to estimate inherent losses existing in the portfolio, FDIC, FRB, and OTS all believed that the interagency policy statement provided adequate guidance on the use of historical loss experience. However, their specific interpretation of that guidance varied, especially with regard to how industry averages for loss experience should be used. OCC did not refer to the interagency policy statement, but indicated it believes that a bank’s use of historical analyses should be based on its own experience, and not on industry averages. FASB stated it believes that providing specific guidance in this area would impede the banks’ ability to use the historical data that are most relevant to their particular situation. FDIC and FRB indicated that regulatory guidance provided in the interagency policy statement is generally sufficient with regard to the use of historical analyses to estimate loan losses. They stated that the policy statement purposely does not provide specific, detailed guidance on the length of past experience that should be used by an institution or the methods that institutions should use to factor historical losses into their reserve estimates. They believe differences among institutions in estimation methods are warranted based on differences in institution-specific factors and due to consideration of the benefits versus the costs of utilizing more complex, data-intensive approaches such as migration analysis. We recognize that institutions vary greatly in size and complexity and have different financial and technical resources. Therefore, we believe it is important for standards and guidance to focus on alternative historical loss methods, including the time periods used to develop ratios or other historical data, so that probable losses that exist in similar loan portfolios of different institutions are identified and measured in a manner that produces comparable results. While the approaches used to accomplish this may be somewhat different, the basic parameters used should be the same, and therefore the results should be comparable. FRB also stated that while specific guidance to institutions on past loss experience is not provided in the policy statement, the statement does provide quantitative guidance based on industry loss experience that examiners should use to review the overall reasonableness of an institution’s reserve estimates. OTS made reference to this same guidance in the policy statement; however, it characterized it as specific guidance for the use of historical loss experience, including appropriate time periods. It stated that the guidance provides that experience based on the institution’s average annual rate of net charge-offs over the last 2 or 3 years for similar loans, adjusted for current conditions and trends, should be used. It also stated that industry-average net charge-off experience is appropriate only when the institution does not have a sufficient basis for determining this amount. The specific guidance in the interagency policy statement that OTS and FRB referred to is listed under the “Examiner Responsibilities” section of the statement as follows. “After analyzing an institution’s policies, practices, and historical credit loss experience, the examiner should further check the reasonableness of management’s (reserve) methodology by comparing the reported (reserve) against the following amounts: (a)50 percent of the portfolio that is classified doubtful; (b)15 percent of the portfolio that is classified substandard; and (c)for the portions of the portfolio that have not been classified, estimated credit losses over the upcoming 12 months given the facts and circumstances as of the valuation date.” According to the policy statement, the first two factors in the above reasonableness formula are based entirely on industry averages. The last factor is to be based on the institution’s average annual rate of net charge-offs over the previous 2 or 3 years. If this information is not available, then the examiner may use industry average net charge-off rates for nonclassified loans. Consistent with FRB’s characterization, the policy statement says that the above formula is meant only as a reasonableness test to be applied by examiners. We do not agree with OTS’s statement that this formula provides specific guidance for the use of historical analyses. In addition, we believe the use of this formula by examiners or institutions could be misleading because it is based largely on industry averages. As previously mentioned, standard industry loss percentages do not consider the particular characteristics of the institution’s loan portfolio and, as demonstrated in the report, can result in overstated or understated reserves. OCC did not cite the interagency policy statement in its comments regarding this or any other recommendation. OCC stated that it believes banks’ analyses should have an internal focus on the unique composition and historical loss experience of their own portfolios rather than on external comparisons with average experience of the industry. OCC also stated that because no single approach has been determined to be the best, it does not require banks to use a specific method or time period to determine their own historical loss experience. In addition, it stated that the method used will depend to a large degree on the capabilities of the individual bank’s information systems. OCC indicated that its examiners have been instructed, given the individual bank’s systems capabilities, to determine whether a bank’s methodology for evaluating the allowance produces reasonable estimates of probable losses which are inherent in its portfolio. Similar to OCC, FASB interpreted this recommendation to be a request that it develop a specific method for using loss experience—for example, that the last 3 years of experience should be used to estimate current year losses. It believes banks should have the flexibility to use the historical data that are judged to be most reflective of its current loan losses. By developing a specific method for using historical experience, FASB believes that banks’ ability to use the most relevant data would be eliminated. While we agree conceptually with FASB and OCC that banks should be given the latitude to use what they determine to be the most meaningful approach to establishing reserves based on historical losses, we believe that in practice such flexibility would likely result in significant under-reserving in times of economic decline and over-reserving in times of economic prosperity. In addition, as demonstrated in the report, major inconsistencies and therefore incomparability can result when institutions use methods which produce significantly varying amounts of reserves for the same loss exposure. We believe such inconsistency and incomparability result, in part, from the lack of clarifying guidance by FASB related to the types of “existing conditions” referred to in SFAS No. 5 that are indicative of probable loan losses, as well as the lack of guidance on specific actions to be taken if “future events” confirming the losses fail to occur. We believe it is incumbent on FASB to provide clarification on these and other issues relating to the use of historical analyses to estimate probable loan losses. Regarding our recommendation that all portions of the reserve, including any supplemental amounts, should be directly linked to and justified by documented analyses, all regulators agreed that documentation was important, but there were significantly differing views on whether large supplemental reserves should be allowed. FASB did not believe it was responsible for providing the type of guidance we recommended, but agreed that the type of justification we described should support an appropriate estimate of reserves. FDIC, FRB, and OTS all agreed that documentation of the reserve analyses was important, but they believed that the interagency policy statement provided sufficient guidance on the required level of documentation of reserves. The interagency policy statement does state that the board of directors and management are expected to adequately document the institution’s process for determining adequate loan loss reserves. However, this language is not significantly different from that contained in prior regulatory guidance. We believe this level of guidance is too general, as demonstrated by the significant amounts of unjustified reserves discussed in the report. With regard to our findings and conclusions on unjustified supplemental reserves, FDIC and FRB indicated that from a regulatory perspective, reserves should be more conservatively estimated in order to protect the deposit insurance funds. Therefore, they stated they would hesitate to suggest that an institution reduce its reserves, even if a reduction was indicated by the institution’s analyses of probable existing losses. We find this position to be contrary to their comments regarding the need for documented analyses to support the level of reserves, but consistent with the findings in the report. As indicated in the report, over 30 percent of the total reserves of 7 of the 12 institutions we reviewed were supplemental reserves which were generally not justified by supporting analyses. As demonstrated in the report, unjustified supplemental reserves can not only mask the improvement of a loan portfolio in good times, but can also enable an institution to conceal increases in loss exposure during bad times. In addition, we believe these large unjustified supplemental reserves reflect institutions’ and regulators’ uncertainty as to how to best identify and measure probable losses in the loan portfolio—such uncertainty is likely to result in misstated reserves, especially when institutions rely heavily on supplemental reserves as “cushions” rather than doing the specific, comprehensive analyses necessary to identify existing probable losses. We do not believe that reserves should be used by regulators as cushions for future uncertainties or that such cushions should be commingled with reserves whose purpose is to reflect losses already existing in the portfolio. Further, we believe that if regulators are concerned about future losses, then direct capital appropriations could be made rather than using the loan loss reserve to address this concern. In its comments on this recommendation, OCC stated it believes some margin for error is desirable, but that it shares GAO’s concerns about large supplemental reserves. It believes that reducing the relative size and importance of this unallocated component of the allowance will produce a more refined and reliable estimate of an appropriate reserve level in most banks. OCC also stated that it revised Banking Circular 201 in February 1992 and expects the long-term effects of this revised guidance, as well as the implementation of SFAS No. 114, to result in a reduction in supplemental reserves. We analyzed the revised Banking Circular 201 in connection with our 1993 report on OCC bank examinations and also in connection with our work for this report. While the revised banking circular does provide sound general guidance, it does not provide for a methodology to quantify the various risk factors that are to be considered by banks and examiners in assessing the reserve. Therefore, we believe Banking Circular 201 still provides too much latitude in banks’ reserving practices. As discussed in the report, SFAS No. 114 only addresses reserving for individual loans identified by the institution for evaluation of collectibility. It does not address overall reserving practices which encompass estimates of inherent, as well as specific, losses. Therefore, as stated in the report, we do not believe the application of SFAS No. 114 will resolve the problems we identified in the report with regard to supplemental reserves. FASB’s comments on this recommendation indicated that while the type of analysis and documentation advocated by GAO should support an appropriate financial statement estimate, the form and detail is generally left to the institution and its auditor. It stated that FASB does not prescribe how an entity should demonstrate its compliance with GAAP. While we agree that FASB should not be required to prescribe demonstration of GAAP compliance, we do believe it should develop or clarify GAAP standards when it becomes clear that existing guidance does not provide the desired result of consistent and reliable financial information. We believe the report clearly demonstrates that the desired result is not being achieved with regard to supplemental reserves and therefore that FASB needs to take action. | GAO reviewed the methods that federally insured depository institutions used to establish loan loss reserves, focusing on whether: (1) the reserve amounts were justified by supporting analysis and comparable among institutions; and (2) accounting standards and regulatory guidance were sufficient to promote fair and consistent financial reporting of loan loss reserves among depository institutions. GAO found that: (1) case studies showed that the depository institutions maintained significant amounts of unsupported loan loss reserves, particularly large supplemental reserves that were not linked to loss exposure; (2) most of the institutions' loan loss reserves were not justified by supporting analysis and were not comparable among institutions; (3) the institutions' reserving methods varied greatly regarding the use of individual loan assessment results, determination and use of historical loss experience, and the inclusion of supplemental reserves; (4) financial report users could not compare the adequacy of the institutions' reserves or judge the quality of their loan portfolios; (5) unjustified supplemental reserves could cushion changes in the condition of the loan portfolio and mask the institutions' true financial status, which in turn could impede regulators' oversight; and (6) there was no regulatory guidance for establishing loan loss reserves, which gave the institutions excessive flexibility in how they calculated their loss reserves. |
Introduced in various incarnations in every congressional session since the 103 rd Congress, the proposed Employment Non-Discrimination Act (ENDA; H.R. 1755 / S. 815 in the 113 th Congress) would prohibit discrimination based on an individual's actual or perceived sexual orientation or gender identity by public and private employers in hiring, discharge, compensation, and other terms and conditions of employment. The stated purpose of the legislation is "to address the history and persistent, widespread pattern of discrimination, including unconstitutional discrimination, on the basis of sexual orientation and gender identity by private sector employers and local, State, and Federal Government employers," as well as to provide effective remedies for such discrimination. Specific exemptions from coverage are included for religious organizations and educational institutions, the armed services, and employers with fewer than 15 employees. Preferential treatment or quotas on the basis of sexual orientation or gender identity and "disparate impact" claims of discrimination would be specifically precluded. Patterned on Title VII of the Civil Rights Act of 1964, the act would be enforced by the Equal Employment Opportunity Commission (EEOC). Although earlier versions of the legislation, dating back to 1975, proposed simply amending the provisions of Title VII to add "sexual orientation" to categories of discrimination already prohibited, more recent versions of ENDA have proposed a stand-alone legislative safeguard against sexual orientation and gender identity discrimination in employment. Because the proposed legislation incorporates by reference many of Title VII's provisions, it is similar in scope to the earlier law. However, because discrimination on the basis of sexual orientation and gender identity was not before Congress when it enacted Title VII, the measures also differ in several significant respects. On November 7, 2013, the Senate passed ENDA. Because several amendments were adopted during the markup process and floor vote, the final version differs in several respects from the House version of the bill. Where relevant, these differences are identified in this report. Like Title VII, ENDA would prohibit employers, employment agencies, and labor organizations from discriminating on the basis of sexual orientation or gender identity. Both public and private employers would be covered, although private employers who have fewer than 15 employees would be exempt. Like Title VII, ENDA would define "employer" to exclude "bona fide private membership" clubs that qualify for federal tax exemptions. As described in greater detail below, religious organizations and the Armed Forces would also be specifically excluded from coverage under the legislation. Likewise, most public and private employees would be protected by ENDA, including employees covered by the Government Employee Rights Act of 1991 and the Congressional Accountability Act of 1995. Volunteers who receive no compensation, however, would not be covered under the legislation. If enacted, ENDA would make it an unlawful employment practice for an employer to discriminate against an individual "because of such individual's actual or perceived sexual orientation or gender identity." The legislation's delineation of prohibited employment practices substantially tracks the catalogue of employer malfeasance condemned by Title VII, which generally makes it unlawful for employers with 15 or more employees, employment agencies, and labor organizations to discriminate against employees or applicants for employment because of race, color, religion, sex, or national origin. Thus, all forms of employment and pre-employment bias would be forbidden, including discrimination in hiring, discharge, promotion, layoff and recall, compensation and fringe benefits, classification, training, apprenticeship, referral, union membership, and other "terms, conditions, or privileges of employment." Likewise, employers would not be allowed to "limit, segregate, or classify" employees in ways that "deprive or tend to deprive" them of job opportunities or "adversely affect" their employment status. A comparable range of employment agency and labor organization practices, again largely borrowed from Title VII, would be prohibited by ENDA, which also would prohibit discrimination in apprenticeship or training programs. In addition, the legislation incorporates Title VII language that would specifically prohibit retaliation against employees who complain of discriminatory conduct. Despite these similarities with respect to prohibited acts, ENDA would differ from Title VII in several significant ways. For example, one provision without direct parallel in Title VII's statutory text would make an employer liable for employment actions that are "based on the sexual orientation or gender identity of a person with whom the individual associates or has associated." Another provision would narrow the evidentiary options available in sexual orientation and gender identity cases by stipulating that employees may bring only disparate treatment claims, meaning that disparate impact claims would be prohibited. Disparate treatment generally occurs when an employer intentionally discriminates against an employee by treating a similarly situated employee differently, while disparate impact occurs when an employer's acts or policies are facially neutral but have an adverse effect on a class of employees and are not otherwise reasonable. Proof of intent to discriminate is required to prove a disparate treatment claim, but is not required to establish a disparate impact claim, which can often be proved through the use of statistics. Because disparate impact claims would not be allowed under ENDA, a plaintiff would have to prove that an employer intended to discriminate, a higher evidentiary threshold. Reinforcing this limitation is another provision that would bar the EEOC from requiring employers to collect or provide statistics on sexual orientation and gender identity. However, nothing in ENDA would prohibit employers from voluntarily submitting such statistics to the EEOC. In addition to these provisions, the ENDA legislation would clarify that preferential treatment or quotas on the basis of sexual orientation or gender identity would not be required. Likewise, employers would not be prohibited from requiring employees to adhere to reasonable dress or grooming standards, as long as the employer permits employees who have undergone gender transition to comply with the same dress or grooming standards for the gender to which the employee has transitioned or is transitioning. Finally, ENDA states that nothing in the act should be construed to require construction of new or additional facilities. In addition, the Senate version of ENDA was amended during markup in the Committee on Health, Education, Labor, and Pensions. The amended bill contains several additional requirements, including a provision that would bar individuals who sue under both ENDA and Title VII from being awarded remedies under both statutes, as well as a section that would authorize mixed-motive claims, which generally involve employment actions that are based on both permissible and impermissible reasons. In addition, the committee-approved version of ENDA would revise the bill's attorney's fees provisions (discussed below) by clarifying that authority to award such fees would be limited "to the same extent as is permitted under Title VII.... " As noted above, ENDA would prohibit employment discrimination on the basis of actual or perceived sexual orientation. "Sexual orientation" would be defined to mean "homosexuality, heterosexuality, or bisexuality." In contrast, Title VII's prohibition against discrimination on the basis of sex has consistently been interpreted to exclude discrimination on the basis of sexual orientation. Although some have argued that sex discrimination encompasses sexual orientation discrimination, the courts have generally rejected that theory, reasoning that the prohibition against sex discrimination refers only to the traditional definition of biological sex. Because Title VII does not protect against employment discrimination on the basis of sexual orientation, ENDA would significantly expand the scope of protection under current employment discrimination law. It is important to note, however, that courts have held that the fact that a victim of discrimination is gay or bisexual does not preclude a claim under Title VII. For example, in some cases, courts have allowed Title VII claims to proceed when an individual who is gay can demonstrate that he or she was the victim of unlawful sex discrimination in the form of sexual harassment or gender stereotyping. In the context of sexual harassment, recent court decisions have been guided by the Supreme Court's decision in Oncale v. Sundowner Offshore Services . In that case, a male employee suffered physical abuse of a sexual nature, but his claims of sexual harassment were initially denied because the lower court held that same-sex sexual harassment is not actionable under Title VII. The Supreme Court reversed, holding that, in cases of alleged sexual harassment, the gender of the victim and harasser are not dispositive, but rather the critical question is whether the harassment occurred "because of sex." The Court also recognized that an inference that harassment is "because of sex" is not obvious where the harasser and the victim are of the same sex, but provided three examples of how such an inference could be established: (1) if the harasser sexually desired the victim; (2) if the harasser was hostile to the presence of one sex in the workplace; or (3) if comparative data showed that the harasser targeted only members of one sex. Based upon the Supreme Court's opinion in Price Waterhouse v. Hopkins , individuals who are gay may also prevail under Title VII when an employer discriminates based on the employee's failure to conform to sex stereotypes. In Price Waterhouse , a female employee was denied partnership in an accounting firm, despite the fact that she was regarded as a high performer. Furthermore, partners in the firm had instructed her to act more femininely in order to be considered for a partnership in the future. The Court held that Price Waterhouse was applying standards for partnership in a prohibited sexually disparate manner, in that Title VII did not permit an employer to evaluate female employees based upon their conformity with the employer's stereotypical view of femininity. As a result, harassment of an individual for failure to conform to sex stereotypes could constitute harassment "because of sex," even if the animosity towards nonconformance is caused by a belief that such behavior indicates homosexuality. Based on these decisions, it appears that individuals who are gay may currently be protected under Title VII if they are discriminated against because of sex. However, such individuals would not be protected by current law if they were the victim of discrimination on the basis of sexual orientation, a situation that ENDA appears designed to remedy. It is important to note that ENDA states that the act should not be construed to invalidate or limit rights under any other federal or state law. Therefore, ENDA would not appear to alter the current protections that may be available to individuals who are gay under Title VII or state law. ENDA would also prohibit employment discrimination on the basis of actual or perceived gender identity. "Gender identity" would be defined to mean "the gender-related identity, appearance, or mannerisms or other gender-related characteristics of an individual, with or without regard to the individual's designated sex at birth." Under current law, Title VII does not expressly prohibit gender identity discrimination. Nonetheless, there have been cases interpreting Title VII's prohibition against sex discrimination to cover gender and/or gender identity. Although the majority of federal courts to consider the issue have concluded that discrimination on the basis of gender identity is not sex discrimination, there have been several courts that have reached the opposite conclusion in the years since the Supreme Court's decision in Price Waterhous e . As noted above, the Price Waterhouse decision, in which the Court repeatedly declared that Title VII bars discrimination on the basis of "gender," held that discrimination against a female employee who did not conform to socially constructed gender expectations constituted unlawful gender discrimination in violation of Title VII. Since Price Waterhouse , several courts have openly speculated that the Price Waterhouse decision "seem[s] to indicate that the word 'sex' in Title VII encompasses both gender and sex, and forbids discrimination because of one's failure to act in a way expected of a man or a woman." For example, in Smith v. Salem , a male firefighter who was undergoing gender transition to female argued that he had been suspended because of his feminine appearance. The U.S. Court of Appeals for the Sixth Circuit held that, to the extent that the firefighter asserted that she experienced discriminatory treatment due to the fact that she did not conform to what her employer believed males should look and act like, she had sufficiently plead a prima facie case of sex discrimination. Similarly, in Barnes v. Cincinnati , a male police officer undergoing gender transition to female was denied a promotion because she acted too femininely in her supervisors' opinions. More recently, the EEOC adopted a similar interpretation of Title VII. In Macy v. Holder , a job applicant alleged that she had been hired for a position in the Bureau of Alcohol, Tobacco, Firearms and Explosives but was subsequently denied the job when she informed the agency that she was undergoing a gender transition. The EEOC ruled that intentional discrimination based on gender identity is sex discrimination and therefore permitted the complainant's Title VII claim to proceed. Although this administrative decision is not binding on the federal courts, it could have a significant enforcement effect, given that the EEOC is responsible for handling initial claims processing for employment discrimination complaints. Meanwhile, the U.S. Court of Appeals for the Eleventh Circuit reached a similar conclusion on constitutional grounds in a case involving a Georgia state employee who was fired from her job for being transgender. According to the court, "[w]e conclude that a government agent violates the Equal Protection Clause's prohibition of sex-based discrimination when he or she fires a transgender or transsexual employee because of his or her gender non-conformity." Although some courts have held that Title VII's prohibition against sex discrimination may encompass claims based on gender identity when unlawful gender stereotyping is involved, the courts have not recognized gender identity discrimination on its own to be an unlawful employment practice under Title VII. As a result, ENDA would expand the scope of protection under current employment law by explicitly prohibiting gender identity discrimination. As noted above, ENDA states that the act should not be construed to invalidate or limit rights under any other federal or state law. Therefore, ENDA would not appear to alter the current protections based on gender identity that may be available under Title VII or state law. ENDA contains several exceptions. First, the Armed Forces, which include the Army, Navy, Air Force, Marines, and Coast Guard, would be exempt, and the legislation specifies that current laws regarding veterans' preferences in employment would not be affected. The courts have similarly held that uniformed military personnel are not covered by Title VII, although civilian military employees are protected by Title VII. Notably, certain religious organizations would also be exempt from coverage under ENDA. This exemption is consistent with previous congressional efforts to avoid infringing on a religious organization's exercise of religion with respect to its employment practices, such as the Title VII provision that exempts certain religious organizations from compliance with that statute. In that sense, ENDA would expand the current protection offered to religious organizations relating to discrimination in employment practices. Title VII includes two exceptions that allow certain employers to consider religion in employment decisions. Specifically, the prohibition against religious discrimination does not apply to "a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities." The prohibition also does not apply to religious educational institutions if the institution "is, in whole or in substantial part, owned, supported, controlled, or managed by a particular religion or by a particular [organization], or if the curriculum of the [institution] is directed toward the propagation of a particular religion." These exemptions are sometimes referred to as sections 702(a) and 703(e)(2), respectively. The Title VII exemptions apply with respect to discrimination based on religion only and do not allow qualifying organizations to discriminate on any other basis forbidden by Title VII, such as race, color, national origin, or sex. Like Title VII, ENDA "shall not apply to a corporation, association, educational institution or institution of learning, or society that is exempt from the religious discrimination provisions of title VII of the Civil Rights Act of 1964 pursuant to section 702(a) or 703(e)(2) of such Act." By exempting the organizations covered by the 702(a) and 703(e)(2) exemptions of Title VII, ENDA ensures that such organizations would not be required to hire or retain an individual if the organization had objections to the individual's sexual orientation or gender identity. Notably, the language of Title VII does not appear to require that the organization's religious beliefs oppose certain sexual orientations or gender identifications. In other words, the ENDA exemption does not appear to limit the permissibility of religious organizations' discrimination based on sexual orientation or gender identity to instances in which those factors may conflict with religious beliefs. For example, under the legislation, even religious organizations whose religious teachings do not oppose homosexuality could be permitted to refuse to hire a gay applicant. Thus, the proposed legislation likely would not interfere with religious organizations' employment practices involving considerations of sexual orientation or gender identity of employees and applicants. To the contrary, it may actually broaden these organizations' ability to discriminate in hiring. In this sense, the ENDA exception goes farther than the Title VII exception, which allows religious employers to discriminate on the basis of religion but not on the basis of race, color, national origin, or sex. The question of what organizations would be covered by the ENDA exemption may be resolved by looking at organizations that have sought protection under the relevant Title VII exemptions. Title VII did not define what organizations would qualify for an exemption under the statute, and court decisions have indicated several factors relevant to deciding whether an organization qualifies, including (1) the purpose or mission of the organization; (2) the ownership, affiliation, or source of financial support of the organization; (3) requirements placed upon staff and members of the organization (faculty and students if the organization is a school); and (4) the extent of religious practices in or the religious nature of products and services offered by the organization. No single factor appears to be dispositive and as one federal court has noted, "the decision whether an organization is 'religious' for purposes of the exemption cannot be based on its conformity to some preconceived notion of what a religious organization should do, but must be measured with reference to the particular religion identified by the organization." Organizations may qualify for an exemption if their purpose, character, and operations incorporate elements of their religion. For example, in LeBoon v. Lancaster Jewish Community Center Association , a Jewish community center qualified for an exemption under Title VII when it terminated the employment of a Christian employee. The center's stated mission was to promote Jewish life and values, and three local rabbis were significantly involved in its management. Furthermore, the center conducted a variety of programs observing Jewish religious holidays and traditions. The U.S. Court of Appeals for the Third Circuit noted the organization's primarily religious character, indicated by factors such as the composition of its administrative body and the programs that it offered to the community. Ultimately, the court held that religious organizations may qualify for an exemption despite engaging in secular activities, not adhering to the strictest tenets of the religion, or not hiring only co-religionists. On the other hand, courts have declined to apply the exemption to organizations that cannot demonstrate a connection between religious beliefs and the organization itself. In Equal Employment Opportunity Commission (EEOC) v. Townley Engineering and Manufacturing Company , the owners of a mining equipment manufacturing company claimed an exemption under Title VII after an employee initiated legal proceedings objecting to attending mandatory religious services. The owners claimed that they founded their company under "a covenant with God that their business would be a Christian, faith-operated business" and that they were "unable to separate God from any portion of their daily lives, including their activities at the Townley company." The court reviewed legal precedent and the legislative history of Title VII and held that the central function of the exemption "has been to exempt churches, synagogues, and the like, and organizations closely affiliated with those entities." It noted that Townley was a for-profit company, producing a secular product, with no affiliation with or support from a church. Further, it had no religious purpose. Although the court recognized that the owners did include religious characteristics in their operation of their company, the court held that "the beliefs of the owners and operators of a corporation are not simply enough in themselves to make the corporation 'religious'" under the Title VII exemption. In Pime v. Loyola University of Chicago , a former Jesuit university sought to retain its religious identity even after it had evolved into a secular institution. It claimed an exemption under Title VII as a university supported, controlled, or managed in whole or in part by a religious society because it reserved three tenured positions for Jesuits and several university administrators (including the president, one-third of the trustees, and other officers) were also Jesuits. However, the Society of Jesus did not instruct the president or trustees with regard to university matters and did not control the decisions of other Jesuits who served in official positions at the university. As a result, the U.S. Court of Appeals for the Seventh Circuit held that, despite a "Jesuit presence" on campus, the university did not qualify for an exemption from Title VII. In a similar case, EEOC v. Kamehameha Schools /Bishop Estate , the U.S. Court of Appeals for the Ninth Circuit likewise held that a school that hired Protestant teachers to provide a secular education to students did not qualify for an exemption under Title VII. The Kamehameha Schools were created by the will of a member of the Hawaiian royal family, which provided that teachers be members of the Protestant faith and claimed an exemption as a religious educational institution based on this provision. However, the court held that the schools' purpose and character were primarily secular and not religious, noting that the religious characteristics the schools had (i.e., comparative religious studies, scheduled prayers and services, Bible quotations in a school publication, and employment of nominally Protestant teachers) were common to private schools. The court also noted that the schools had embraced a broad mandate to help native Hawaiians "participate in contemporary society for a rewarding and productive life" through a solid secular education. As a result, the court held that the teachers' religious affiliation was an insufficient basis to qualify for an exemption as a religious institution. The result in Kamehameha Schools was influenced to some degree by the absence of church ownership or control. Indeed, the court of appeals observed that it had found "no case holding the Title VII exemption to be applicable where the institution was not wholly or partially owned by a church." Subsequently, in Killinger v. Samford University , the U.S. Court of Appeals for the Eleventh Circuit held that a Baptist college was an exempt religious institution which could require professors to subscribe to the school's religious doctrine. The court noted that a Baptist convention comprised the largest single source of revenue for the college and that the school's charter listed as its chief purpose the "promotion of Christian Religion." Thus, under Title VII precedent, independent Christian and other religious schools not owned, financed, or controlled by church bodies may find it difficult to qualify for the "religious organization" exemption in ENDA. Of course, as stand-alone legislation, it is possible that courts would find that the policy concerns underlying ENDA are sufficiently different from Title VII to warrant a less restrictive reading of the former. Absent clarification in ENDA itself, or its legislative history, any resolution of the issue would have to await further judicial elaboration. Meanwhile, during the recent floor vote on ENDA, the Senate adopted an amendment that would clarify the exemption for religious organizations. Under the amendment, federal agencies or state or local agencies that receive federal funding would be prohibited from withholding benefits or barring program participation for religious employers who are exempt from ENDA. Enforcement procedures under ENDA would parallel the enforcement provisions of Title VII. Thus, the Department of Justice (DOJ) would enforce ENDA against state and local governments, and administrative enforcement with respect to private employment would be delegated to the EEOC, which would have the same authority to receive and investigate complaints, to negotiate voluntary settlements, and to seek judicial remedies as it currently exercises under Title VII. Similarly, in devising remedies for sexual orientation or gender identity discrimination under the legislation, a federal court would have the same jurisdiction and powers as the court has to enforce Title VII. In general, federal courts possess broad remedial discretion under Title VII, including the ability to enjoin the unlawful employment practice and to "order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay ... or any other relief as the court deems appropriate." Although the Supreme Court early on adopted a "make-whole" theory of Title VII relief, including use of affirmative action remedies, minority preferences and the like, where necessary to redress discrimination of a particularly "egregious" or "longstanding" nature, ENDA would specifically forbid employers from using quotas or preferential treatment. Likewise, the remedies under ENDA would be patterned on Title VII's remedial provisions. Under Title VII, victims of discrimination may seek equitable relief, including limited back pay awards for wage, salary, and fringe benefits lost as the result of discrimination. Private employers who intentionally discriminate in violation of the statute may be liable for compensatory and punitive damages, while plaintiffs may seek awards of compensatory, but not punitive, damages against federal, state, and local governmental agencies. The following ceilings or "caps" are established by law for compensatory and punitive damages combined: (1) $50,000 for defendants who have 15 to 100 employees; (2) $100,000 for employers with 101 to 200 employees; (3) $200,000 for employers with 201 to 500 employees; and (4) $300,000 for employers with more than 500 employees. The Supreme Court has also excluded from the statutory limits on damages so-called "front pay," awarded to redress discrimination victims for continuing injury in promotion or discharge cases where reinstatement is not a feasible remedy. These Title VII remedies appear to be applicable to claims that would be filed under ENDA. Meanwhile, ENDA would waive the states' Eleventh Amendment immunity from suit for sexual orientation discrimination or gender identity against employees or applicants within any state "program or activity" that receives federal financial assistance. The Eleventh Amendment provides states with immunity from claims brought under federal law in both federal and state courts. Although Congress may waive the states' sovereign immunity by "appropriate" legislation enacted pursuant to Section 5 of the Fourteenth Amendment, the scope of congressional power to create a private right of action against the states for monetary damages has been substantially narrowed by a series of Supreme Court decisions. The era of a reinvigorated Eleventh Amendment immunity can be traced to Seminole Tribe v. Florida , which invalidated a portion of the Indian Gaming Regulatory Act authorizing tribal suits against the states. Neither the Commerce Clause nor Section 5 proved to be an effective vehicle to override state sovereign immunity. Three years later, in Alden v. Maine the Supreme Court ruled that the states could not be sued, even in their own courts, for violation of the Fair Labor Standards Act. City of Boerne v. Flores announced the Court's new framework for determining the validity of congressional action under Section 5. In holding unconstitutional the Religious Freedom Restoration Act, Justice Kennedy wrote that Congress's Section 5 power was remedial only; it was not a basis for legislation defining the substantive content of the equal protection guarantee. Moreover, the remedy had to be "congruent and proportional" to the scope and frequency of any violations identified by Congress. These constitutional limitations were subsequently applied by the Court to hold the states immune from private lawsuits under the Age Discrimination in Employment Act, the Violence Against Women Act, and the Americans with Disabilities Act. Taken together, these decisions restrict the ability of private individuals to take the states to court for federal civil rights violations. They may not, however, apply to states' voluntary acceptance of federal benefits that are expressly conditioned on waiver of Eleventh Amendment immunity. "Congress may, in the exercise of its spending power, condition its grant of funds to the States upon their taking certain actions that Congress could not require them to take, and that acceptance of the funds entails an agreement to the actions." Thus, when a statute enacted under the Spending Clause conditions grants to the states upon an unambiguous waiver of Eleventh Amendment immunity, as ENDA proposes, "the condition is constitutionally permissible as long as it rests on the state's voluntary and knowing acceptance of it." Finally, the attorney's fees provision in ENDA differs somewhat from the attorney's fees provision in Title VII. Under Title VII, a court is generally authorized to award "reasonable" attorney's fees (including expert fees) to a "prevailing" plaintiff, unless special circumstances make such an award unjust. Complainants may be considered "prevailing parties" if "they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing the suit." Although either a plaintiff or a defendant may be the prevailing party, fee awards to defendant employers are not the general rule, given the public interest in having Title VII plaintiffs act as "private attorneys general" and the likelihood that defendant employers would have less need of financial assistance. In addition, in cases involving federal employment, both the EEOC and federal agencies are authorized to award reasonable attorney's fees or costs. The EEOC, however, does not appear to have such authority with respect to private sector employment discrimination claims. Under ENDA, courts would have the same authority to award attorney's fees to prevailing parties as they do under Title VII. ENDA would similarly authorize the EEOC to award such fees, but, unlike Title VII, ENDA would appear to allow the EEOC to make such awards in cases involving both federal and private employment discrimination claims. | Introduced in various incarnations in every congressional session since the 103rd Congress, the proposed Employment Non-Discrimination Act (ENDA; H.R. 1755/S. 815 in the 113th Congress) would prohibit discrimination based on an individual's actual or perceived sexual orientation or gender identity by public and private employers in hiring, discharge, compensation, and other terms and conditions of employment. The stated purpose of the legislation is "to address the history and persistent, widespread pattern of discrimination, including unconstitutional discrimination, on the basis of sexual orientation and gender identity by private sector employers and local, State, and Federal Government employers," as well as to provide effective remedies for such discrimination. Patterned on Title VII of the Civil Rights Act of 1964, the act would be enforced by the Equal Employment Opportunity Commission (EEOC). |
by Mark Silva and updated with excerpts at 6 pm EDT
President Barack Obama, fighting to assemble the votes needed for passage of healthcare legislation after more than a year of pressing Congress for action, says that a vote for the bill will be a vote for reform -- and a vote against it, against reform.
"I don't spend a lot of time worrying about what the procedural rules are in the House or Senate,'' Obama says in an interview with FOX News Channel' that will air this evening on Special Report with Bret Baier .
"What I can tell you is that the vote that's taken in the House will be a vote for health care reform.,'' Obama tells Baier. "And if people vote yes, whatever form that takes, that is going to be a vote for health care reform.
"And I don't think we should pretend otherwise,'' the president says, pointing to the motivation behind critics attempting to block the bill. "If they don't, if they vote against it, then they're going to be voting against health care reform and they're going to be voting in favor of the status quo.''
The public will know the difference, the president asserts.
"Washington gets very concerned with these procedures in congress, whether Republicans are in charge or democrats are in charge."
House Republican leaders -- with Rep. John Boehner vowing to do everything possible to prevent the bill from becoming law -- insist that it is the Democrats who will pay the price for a healthcare vote in the midterm elections this fall.
The White House, which had complained that FOX News is "an arm of the Republican Party,'' has broken a certain ice by taking its case to the evening news of the No. 1-rated cable news channel this evening. The president also gave an interview to ABC News earlier this week.
On a day in which a liberal Democrat who was demanding more of the bill conceded that he will support it to help keep the president's agenda on track, the president says in the interview airing on the 6 pm EDT FOX News show: "I'm confident it will pass. And the reason I'm confident that it's going to pass is because it's the right thing to do."
In the long run, the president suggests of the controversy surrounding the bill, he will be "vindicated" for having made tough choices.
"Look, on a whole host of these measures, whether it's health care, whether it was fixing the financial system, whether it's making sure that we passed the recovery act, I knew these things might not be popular, but I was absolutely positive that they were the right thing to do and that, over time, we would be vindicated in having made those tough decisions,'' according to excerpts of the interview released by FOX News Channel.
"I think health care is exactly the same thing,"" Obama says in the interview. "The reason that it needs to be done is not its affect on the presidency. It has to do with how it's going to affect ordinary people who right now are desperately in need of help...
"There are a lot more people who are concerned about the fact that they may be losing their house or going bankrupt because of health care," the president says, with a defense of the transparency in the debate underway. "By the time the vote has taken place, not only I will know what's in it, you'll know what's in it because it's going to be posted and everybody's going to be able to able to evaluate it on the merits...
"This notion that this has been not transparent, that people don't know what's in the bill, everybody knows what's in the bill...the final provisions are going to be posted for many days before this thing passes."
Obama says this about a proposed "deem and pass" rule that could enable the House to accept the Senate-passed bill without voting on it, saving its roll call for the House fix that reconciles the two bills: "What I think is going to happen and what should happen: you now have a proposal from me that will be in legislation, that has the toughest insurance reforms in history, makes sure that people are able to get insurance even if they've got preexisting conditions, makes sure that we are reducing costs for families and small businesses, by allowing them to buy into a pool, the same kind of pool that members of Congress have."
"You've got a good package, in terms of substance. I don't spend a lot of time worrying about what the procedural rules are in the House or the Senate...
"The issue that I'm concerned about is whether not we're fixing a broken system," the president says in the FOX interview. "The key is to make sure that we vote -- we have a vote on whether or not we're going to maintain the status quo, or whether we're going to reform the system.
"Whatever they end up voting on -- and I hope it's going to be sometime this week -- that it is going to be a vote for or against my health care proposal. That's what matters. That's what ultimately people are going to judge this on...
"Somebody who votes for this bill, they're going to be judged at the polls. And the same is going to be true if they vote against it." ||||| This is a rush transcript of "Special Report With Bret Baier" from March 17, 2010. This copy may not be in its final form and may be updated.
BRET BAIER, "SPECIAL REPORT" HOST: Welcome to Washington. I'm Bret Baier, and this is a special edition of "Special Report", beginning tonight in the Blue Room in the White House, mid-way through what many people are calling the most pivotal week of his presidency so far. We are interviewing President Barack Obama.
Mr. President, thank you for the time.
PRESIDENT BARACK OBAMA: Thank you for having me, Bret.
BAIER: You have said at least four times in the past two weeks: "the United States Congress owes the American people a final up or down vote on health care." So do you support the use of this Slaughter rule? The deem and pass rule, so that Democrats avoid a straight up or down vote on the Senate bill?
OBAMA: Here's what I think is going to happen and what should happen. You now have a proposal from me that will be in legislation, that has the toughest insurance reforms in history, makes sure that people are able to get insurance even if they've got preexisting conditions, makes sure that we are reducing costs for families and small businesses, by allowing them to buy into a pool, the same kind of pool that members of Congress have.
We know that this is going to reduce the deficit by over a trillion dollars. So you've got a good package, in terms of substance. I don't spend a lot of time worrying about what the procedural rules are in the House or the Senate.
(CROSS TALK)
OBAMA: What I can tell you is that the vote that's taken in the House will be a vote for health care reform. And if people vote yes, whatever form that takes, that is going to be a vote for health care reform. And I don't think we should pretend otherwise.
(CROSS TALK)
OBAMA: Bret, let me finish. If they don't, if they vote against, then they're going to be voting against health care reform and they're going to be voting in favor of the status quo. So Washington gets very concerned about these procedural issues in Congress. This is always an issue that's — whether Republicans are in charge or Democrats in charge — when Republicans are in charge, Democrats constantly complain that the majority was not giving them an opportunity, et cetera.
What the American people care about is the fact that their premiums are going up 25, 40, 60 percent, and I'm going to do something about it.
BAIER: Let me insert this. We asked our viewers to e-mail in suggested questions. More than 18,000 people took time to e-mail us questions. These are regular people from all over the country. Lee Johnson, from Spring Valley, California: "If the bill is so good for all of us, why all the intimidation, arm twisting, seedy deals, and parliamentary trickery necessary to pass a bill, when you have an overwhelming majority in both houses and the presidency?"
Sandy Moody in Chesterfield, Missouri: "If the health care bill is so wonderful, why do you have to bribe Congress to pass it?"
OBAMA: Bret, I get 40,000 letters or e-mails a day.
BAIER: I know.
OBAMA: I could read the exact same e-mail —
BAIER: These are people. It's not just Washington punditry.
OBAMA: I've got the exact same e-mails, that I could show you, that talk about why haven't we done something to make sure that I, a small business person, am getting as good a deal as members of Congress are getting, and don't have my insurance rates jacked up 40 percent? Why is it that I, a mother with a child with a preexisting condition, still can't get insurance?
So the issue that I'm concerned about is whether not we're fixing a broken system.
BAIER: OK, back to the original question.
OBAMA: The key is to make sure that we vote — we have a vote on whether or not we're going to maintain the status quo, or whether we're going to reform the system.
BAIER: So you support the deem and pass rule?
OBAMA: I am not —
BAIER: You're saying that's that vote.
OBAMA: What I'm saying is whatever they end up voting on — and I hope it's going to be sometime this week — that it is going to be a vote for or against my health care proposal. That's what matters. That's what ultimately people are going to judge this on.
If people don't believe in health care reform — and I think there are definitely a lot of people who are worried about whether or not these changes are, in some fashion, going to affect them adversely. And I think those are legitimate concerns on the substance — then somebody who votes for this bill, they're going to be judged at the polls. And the same is going to be true if they vote against it.
BAIER: Monday in Ohio, you called for courage in the health care debate. At the same time, House Speaker Pelosi was saying this to reporters about the deem and pass rule: "I like it, this scenario, because people don't have to vote on the Senate bill." Is that the kind of courage that you're talking about?
OBAMA: Well, here's what's taking place — we both know what's going on. You've got a Senate bill that was passed, that had provisions that needed to be changed. Right? People were concerned about, for example, the fix that only fixed Nebraska, and didn't fix the rest of the states.
Now, a lot of the members of the House legitimately say, we want to vote on a package, as the president has proposed, that has those fixes embedded in it. Now that may mean they have to sequence the votes. But the ultimate vote they're taking is on whether or not they believe in the proposal that I put forward, to make sure that insurance reform is fixed, to make sure the deficits are reduced, and premiums go down, and small businesses are helped. That's what they're concerned about.
BAIER: Do you know which specific deals are in or out, as of today?
OBAMA: I am certain that we've made sure, for example, that any burdens on states are alleviated, when it comes to what they're going to have to chip in to make sure that we're giving subsidies to small businesses, and subsidies to individuals, for example.
BAIER: So the Connecticut deal is still in?
OBAMA: So that's not — that's not going to be something that is going to be in this final package. I think the same is true on all of these provisions. I'll give you some exceptions though.
Something that was called a special deal was for Louisiana. It was said that there were billions — millions of dollars going to Louisiana, this was a special deal. Well, in fact, that provision, which I think should remain in, said that if a state has been affected by a natural catastrophe, that has created a special health care emergency in that state, they should get help. Louisiana, obviously, went through Katrina, and they're still trying to deal with the enormous challenges that were faced because of that.
(CROSS TALK)
OBAMA: That also — I'm giving you an example of one that I consider important. It also affects Hawaii, which went through an earthquake. So that's not just a Louisiana provision. That is a provision that affects every state that is going through a natural catastrophe.
Now I have said that there are certain provisions, like this Nebraska one, that don't make sense. And they needed to be out. And we have removed those. So, at the end of the day, what people are going to be able to say is that this legislation is going to be providing help to small businesses and individuals, across the board, in an even handed way, and providing people relief from a status quo that's just not working.
BAIER: OK, the Florida deal, in or out?
OBAMA: The Florida deal —
BAIER: Paying for Medicare Advantage, exempting 800,000 Floridians from —
OBAMA: My understanding is that whatever is going to be done on Medicare is going to apply across the board to all states.
BAIER: Connecticut, Montana — there are a lot of deals in here, Mr. President, that people have issues about.
OBAMA: Bret, the core of this bill is going to be affecting every American family. If you have insurance, you're going to be able to keep it. If you don't have insurance, you're going to be able to buy into a pool, like members of Congress have. We're going to make sure that we have delivery system reforms that strengthen Medicare, that are going to make sure that doctors and hospitals are providing better service and better care, and this is going to reduce the deficit.
Now, there are going to be in this, as I just mentioned, on things like making sure that states who have gone through natural catastrophes and medical emergencies are getting help, but those are not going to ones that are driven by politics, they're going to be driven policy.
BAIER: Couple more process things, quickly.
You said a few times as Senator Obama that if a president has to eke out a victory of 50 plus one, that on something as important as health care, "you can't govern." But now you're embracing a 50 plus one reconciliation process in the Senate, so do you feel like you can govern after this?
OBAMA: Well, Bret, the — I think what we've seen during the course of this year is that we have come up with a bill that basically tracks the recommendations of Tom Daschle, former Democratic senator and leader, but also Bob Dole, former Republican leader, Howard Baker, former Republican leader. The ideas embodied in this legislation are not left, they're not right, they are — they are —
BAIER: I understand what you're — I know you don't like to talk about process, but there are a lot of questions in these 18,000 that talk about process.
OBAMA: I understand being —
(CROSSTALK)
BAIER: And there are a lot of people around America that have a problem with this process.
OBAMA: Bret, I —
BAIER: You called it an ugly process just last month.
OBAMA: I've got to tell — I've got to say to you, there are a lot more people who are concerned about the fact that they may be losing their house or going bankrupt because of health care.
BAIER: OK, so we have —
OBAMA: And so — so the — look —
BAIER: Deem and passed, Senate reconciliation and we don't know exactly what's in the fix bill. Do you still think —
OBAMA: No, we will — by the time the vote has taken place, not only I will know what's in it, you'll know what's in it because it's going to be posted and everybody's going to be able to able to evaluate it on the merits.
But here's the thing, Bret, I mean, the reason that I think this conversation ends up being a little frustrating is because the focus entirely is on Washington process. And yes, I have said that is an ugly process. It was ugly when Republicans were in charge, it was ugly were in Democrats were in charge.
BAIER: This is one-sixth of the U.S. economy, though, sir. One-sixth.
OBAMA: And, Bret, let me tell you something, the fact of the matter is that for the vast majority of people, their health care is not going to change because right now they're getting a better deal. The only thing that is going to change for them is is that they're going to have more security under their insurance and they're going to have a better situation when it comes to if they lose their job, heaven forbid, or somebody gets sick with a preexisting condition, they'll have more security. But, so — so —
BAIER: So how can you —
OBAMA: — the notion that —
BAIER: — guarantee that they're not going to —
OBAMA: — so but —
BAIER: — they're going to be able to keep their doctor —
OBAMA: Bret, you've got to let me finish my answers —
BAIER: Sir, I know you don't like to filibuster, but —
OBAMA: Well, I'm trying to answer your question and you keep on interrupting. So let me be clear.
Now, you keep on repeating the notion that it's one-sixth of the economy. Yes, it's one-sixth of the economy, but we're not transforming one-sixth of the economy all in one fell swoop. What we're saying is is that for the vast majority of people who have health care, they're going to be able to keep it. But what we are saying is that we should have some basic protections from insurance company abuses and that in order for us to do that, we are going to have to make some changes in the status quo that we've been debating for a year.
This notion that this has been not transparent, that people don't know what's in the bill, everybody knows what's in the bill. I sat for seven hours with —
BAIER: Mr. President, you couldn't tell me what the special deals are that are in or not today.
OBAMA: I just told you what was in and what was not in.
BAIER: Is Connecticut in?
OBAMA: Connecticut — what are you specifically referring to?
BAIER: The $100 million for the hospital? Is Montana in for the asbestos program? Is — you know, listen, there are people — this is real money, people are worried about this stuff.
OBAMA: And as I said before, this — the final provisions are going to be posted for many days before this thing passes, but —
BAIER: Let me get to some of the specifics on substance not process.
OBAMA: The only thing —
(CROSSTALK)
BAIER: (INAUDIBLE)
OBAMA: — the only thing I want to say, just to close up, is that when you talk about one-sixth of the economy, this is one-sixth of the economy that right now is a huge drag on the economy. Now, we can fix this in a way that is sensible, that is centrist. I have rejected a whole bunch of provisions that the left wanted that are — you know, they were very adamant about because I thought it would be too disruptive to the system. But what we can't do is perpetuate a system in which millions of people day in and day out are having an enormously tough time and small businesses are sending me letters constantly saying that they are seeing their premiums increase 40, 50 percent.
BAIER: Mr. President, you said Monday that you praised the Congressional Budget Office numerous times. You also said this, this proposal makes Medicare stronger — and you just said it to me here —
OBAMA: Right.
BAIER: — it makes coverage better, it makes its finances more secure, and anyone who says otherwise is misinformed or is trying to misinform you.
OBAMA: Right.
BAIER: The CBO has said specifically that the $500 billion that you say that you're going to save from Medicare is not being spent in Medicare. That this bill spends it elsewhere outside of Medicare. So you can't have both.
OBAMA: Right.
BAIER: You either spend it on expenditures or you make Medicare more solvent. So which is it?
OBAMA: Here's what it does. On the one hand what you're doing is you're eliminating insurance subsidies within Medicare that aren't making anybody healthier but are fattening the profits of insurance companies. Everybody agrees that that is not a wise way to spend money. Now, most of those savings go right back into helping seniors, for example, closing the donut hole.
When the previous Congress passed the prescription drug bill, what they did was they left a situation which after seniors had spent a certain amount of money, suddenly they got no help and they were stuck with the bill. Now that's a pretty expensive proposition fixing that. It wasn't paid for at the time that that bill was passed. So that money goes back into Medicare, both to fix the donut hole, lower premiums.
All those things are important, but what's also happening is each year we're spending less on Medicare overall and as consequence, that lengthens the trust fund and it's availability for seniors.
BAIER: Your chief actuary for Medicare said this, that cuts in Medicare: "cannot be simultaneously used to finance other federal outlays and extend the trust fund." That's your guy.
OBAMA: No — and what is absolutely true is that this will not solve our whole Medicare problem. We're still going to have to fix Medicare over the long term.
BAIER: But it's $38 trillion in the hole.
OBAMA: Absolutely, and that's the reason that we're going to have to — that's the reason I put forward a fiscal commission based on Republicans and Democratic proposals, to make sure that we have a long-term fix for the system. The key is that this proposal doesn't weaken Medicare, it makes it stronger for seniors currently who are receiving it. It doesn’t solve that big structural problem, Bret. Nobody's claiming that this piece of legislation is going to solve every problem that's been there for decades. What it does do is make sure that the trust fund is not going to be going bankrupt in seven years, according to their accounting rules —
BAIER: So you don't buy —
OBAMA: — and in the meantime —
BAIER: — the CBO or the actuary that you can't have it both ways?
OBAMA: No —
BAIER: That you can't spend the money twice?
OBAMA: — no, what is absolutely true and what I do agree with is that you can't say that you are saving on Medicare and then spend the money twice. What you can say is that we are going to take these savings, put them back to make sure that seniors are getting help on the prescription drug bill instead of that money going to, for example, insurance reform, and —
BAIER: And you call this deficit neutral, but you also set aside the doctor fix, more than $200 billion. People look at this and say, how can it be deficit neutral?
OBAMA: But the — as you well know, the doctors problem, as you mentioned, the "doctors fix," is one that has been there four years now. That wasn't of our making, and that has nothing to do with my health care bill. If I was not proposing a health care bill, right — let's assume that I had never proposed health care.
BAIER: But you wanted to change Washington, Mr. President. And now you're doing it the same way.
OBAMA: Bret, let me finish my — my answers here. Now, if suddenly, you've got, over the last decade, a problem that's been built up. And the suggestion is somehow that, because that's not fixed within this bill, that that's a reason to vote against the bill, that doesn't make any sense. That's a problem that I inherited. That was a problem that should have been solved a long time ago. It's a problem that needs to be solved, but it's not created by my bill. And I don't think you would dispute that.
BAIER: We're getting the wrap-up sign here.
OBAMA: Yes.
BAIER: Can you be a transformative president if health care does not pass?
OBAMA: Well, I think that — look, I came in at a time when we probably had the toughest economic challenges since the Great Depression. A year later, we can say that, although we're still a long way from where we need to be, that we have made the economy stronger. It's now growing again. We have created a financial situation that is vastly better than it was before.
And so we're now in a situation in which the economy is growing, moving. We're reforming areas like education. We're taking steps on energy. We're doing a whole bunch of things out there that are going to create the foundation for long-term economic growth.
BAIER: So if it doesn't pass, does that diminish your presence?
OBAMA: Well, if it doesn't pass, I'm more concerned about what it does to families out there who right now are getting crushed by rising health care costs and small businesses who were having to make a decision, "Do I hire or do I fix health care?" That's the reason I make these decisions.
BAIER: Mr. President, I'm getting wrapped up, and I don't want to interrupt you, but to finish up, do you think this is going to pass?
OBAMA: I do. I'm confident it will pass. And the reason I'm confident that it's going to pass is because it's the right thing to do. Look, on a whole host of these measures, whether it's health care, whether it was fixing the financial system, whether it's making sure that we passed the Recovery Act, I knew these things might not be popular, but I was absolutely positive that they were the right thing to do and that, over time, we would be vindicated in having made those tough decisions.
I think health care is exactly the same thing. We — I've got a whole bunch of portraits of presidents around here, starting with Teddy Roosevelt, who tried to do this and didn't get it done. The reason that it needs to be done is not its affect on the presidency. It has to do with how it's going to affect ordinary people who right now are desperately in need of help.
BAIER: I apologize for interrupting you, sir. I tried to get the most for our buck here.
(CROSSTALK)
BAIER: Thank you very much for your time.
OBAMA: Thank you very much. I appreciate it. Thank you.
Content and Programming Copyright 2010 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2010 Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content. | President Obama tells Fox News he isn't worried about the legislative acrobatics under way to pass health care reform—and voters shouldn't be, either. "I don't spend a lot of time worrying about what the procedural rules are in the House or Senate,'' Obama said in a rare interview with the network. "What I can tell you is that the vote that's taken in the House will be a vote for health care reform. And if people vote yes, whatever form that takes, that is going to be a vote for health care reform." He later predicted it would pass. Voters shouldn't get caught up in the back-and-forth over the rules, he says. What matters is that lawmakers who vote no are "going to be voting against health care reform and they're going to be voting in favor of the status quo." The interview was a bit testy at times, with Obama complaining to Bret Baier about getting interrupted too much, but it ended on a cordial tone. The Chicago Tribune has excerpts, and Fox has the transcript here. |
The State Department operates over 160 embassies and over 100 consulates at a cost of about $2 billion annually. The embassies perform diplomatic and consular functions and provide administrative support for other U.S. agencies. State employs over 7,300 U.S. Foreign Service officers, about 10,000 Foreign Service nationals, 650 U.S. contractors, and 30,000 Foreign Service national contractors. Worldwide, embassies manage about $600 million worth of personal property, procure about $500 million in goods and services annually, and share management responsibilities for about $12 billion in housing and other real properties. Embassies also have responsibility for over $2 million annually in accounts receivable, such as medical expenses. For decades, long-standing management deficiencies have weakened administrative operations at the embassies, and millions of dollars remained unnecessarily vulnerable to fraud, waste, and abuse. We have previously criticized State’s deficient controls over embassies’ personal and real property, cashiering operations, contract administration, and training. In July 1993, we testified that management deficiencies continued to plague embassies’ operations. We suggested that each embassy establish a formal management improvement program to ensure sound management practices by documenting problems and monitoring corrective actions. For years, Congress has been concerned about State’s reluctance to address management and internal control problems that have historically reduced the effectiveness of its operations. In its November 1993 report, the House Committee on Government Operations stated that State should implement our recommendation that each embassy adopt a formal management improvement plan. On the basis of prior reviews by us and State’s Office of the Inspector General (OIG), the Committee also recommended that State (1) strengthen controls over personal property, (2) ensure that appropriate training is available for U.S. and foreign service national personnel, (3) implement contracting and procurement improvements, (4) eliminate control problems in cashiering functions, and (5) develop systems to track and collect medical insurance reimbursements. State has not implemented our suggestion that all posts establish formal management improvement programs to identify and correct deficiencies. State officials believe that their approach of targeting specific areas for improvement is more appropriate and achieves comparable results in the long term. We continue to believe that if State were to use existing mechanisms for managing embassy operations, such as the Mission Program Plan, it could more quickly and easily achieve the intent of our 1993 recommendation. (See app. I.) State has responded to recommendations contained in the House Committee on Government Operations’ report by initiating some specific actions designed to improve its management over embassy operations. These actions, although steps in the right direction, do not go far enough to ensure that each embassy is improving its operations. We and the State’s OIG continue to find deficiencies in (1) controlling personal property; (2) training for U.S. and foreign service national personnel; (3) contracting and procurement practices; (4) poor controls over cashiering functions; (5) medical insurance reimbursements; and (6) senior-level oversight of operations. In November 1993, the House Committee on Government Operations recommended that the State Department take the following actions to strengthen controls over personal property: establish more stringent procedures and guidance for receiving and issuing personal property overseas; improve the nonexpendable property application software to enhance reconciliation capability; provide increased and specialized training for Foreign Service officers and revise volume 6 of the Foreign Affairs Manual to require property officers to retain inventory records and other pertinent documentation in post files for 3 years; and adopt a zero-tolerance policy with respect to personal property losses. In July 1993, before the Committee’s report, State updated volume 6 of the Foreign Affairs Manual to include revised personal property regulations for all diplomatic and consular posts. This updated guidance incorporated changes in assigned responsibilities and federal regulations. The revised regulations also clarified accountability criteria for ensuring internal controls. On the basis of the new regulations, State’s Property Management Branch, which is responsible for central oversight for domestic and overseas personal property management, issued an instruction handbook that was intended to be an easy reference for posts to ensure compliance with management of personal property overseas. However, branch officials acknowledged that a number of posts were still not in compliance. During fiscal year 1994, branch staff visited 20 of the 260 posts to verify their annual inventory certification. Branch officials said that 14 posts failed to provide documentation that physical inventories were conducted. Although posts that do not provide inventory certifications can be subject to a withholding of funds for personal property acquisitions, and individuals that either refused to certify or falsely certified inventories can be subject to punitive actions, we found no instances in which money was withheld or individuals were sanctioned for not following property management procedures. According to State, it has a zero tolerance policy on personal property loses for fraudulent behavior, but it does not believe it to be in the taxpayers’ interest to pursue small shortages; therefore, in November 1993, it adopted a 1-percent tolerance. State adopted this policy because the 1-percent level is commensurate with that of private industry and State officials believed that the cost to pursue shortages of less than 1-percent would outweigh any benefits. State officials said they required posts to submit to headquarters the amount of losses incurred in fiscal year 1994. Of the 160 posts that submitted such information, only 15 exceeded the 1-percent level. In 1989, to improve property management and accountability, State integrated an inventory reconciliation software package with its non-expendable property application (NEPA) software at about 210 of the overseas posts. State is testing a new application of NEPA, but it has not yet determined how NEPA and other subsidiary systems will function with the planned Integrated Financial Management System. In August 1994, we reported that this system was at a high risk of failure because of State’s inadequate management and planning and therefore might not solve long-standing financial management and internal control problems. The Committee recommended that State train both U.S. Foreign Service officers and Foreign Service national employees in the areas of procurement and acquisition, real property management and maintenance, personal property, and budget and fiscal responsibilities. State’s training arm—The Foreign Service Institute—offers training in most of these areas. State acknowledged that, in some cases, Foreign Service officers report to posts without such training. And, according to the Director of the Office of Foreign Service National Personnel, training Foreign Service nationals is not a priority because of the high costs involved in bringing Foreign Service nationals to Washington, D.C. Although State says it has focused on increasing its regional training of Foreign Service nationals, those we interviewed said that training was still limited, often not timely, and generally not offered in their native language. Of the seven posts we visited, only Paris had formal training programs that identified or provided opportunities for the training requirements of Foreign Service nationals or officers. State is exploring ways to increase the role of Foreign Service nationals in administrative operations overseas. However, the Foreign Service Institute does not have a formal plan in place to ensure that Foreign Service nationals receive adequate training. Transferring more responsibility to Foreign Service nationals without proper training is likely to weaken compliance with internal controls. In 1993, the Committee recommended a number of actions to improve contracting and procurement practices. These included (1) requiring training for all Foreign Service officers and Foreign Service nationals responsible for contracting and procurement, (2) developing and implementing a procurement management information system that includes overseas procurement operations, (3) requiring each post to fully implement the worldwide procurement data system and provide each with appropriate software, (4) requiring each post to appoint a competition advocate and establish a competition advocacy program, and (5) requiring posts to develop advance acquisition plans each fiscal year. To address the need for procurement training, State established new training requirements for contracting officers, including training seminars for about 100 employees at seven regional centers. However, only 150 of the 700 officers overseas have received required training for standard contracting authority up to $250,000. The rest of State’s overseas contracting officers have provisional contracting authority up to $100,000.Procurement officials estimate that it will take many years before all of these officers complete their training. In addition, some Foreign Service nationals responsible for maintaining contracting files indicated that they were not adequately trained. For example, one Foreign Service national told us she had been involved in procurement actions for 6 years before receiving formal training. State developed a worldwide procurement database to meet the minimum legal and regulatory overseas procurement reporting requirements. This database is currently in use at 193 (or 73 percent) of the 265 overseas posts. This database, however, only reports the number and types of contract actions. It is not used to manage, monitor, or ensure control over embassy procurement operations. Most of the posts we visited had not established a competition advocacy program called for by the Committee. The lack of such a program contributed to the failure of some posts to fully compete or review their contract actions and prepare and maintain required documentation. None of the posts had a written policy to advertise solicitations or had evidence that solicitations were authorized. Also, most posts did not maintain a current vendor list, and therefore, could not be assured that all potential sources had been solicited. Several of the embassy officials we met with said they had not received or could not locate headquarters’ guidance stipulating the need of advance acquisition planning. In addition, none of the officials had developed an advance acquisition plan ranking essential procurements. Embassy cashiers are responsible for the day-to-day payment, collection, deposit, and reconciliation of funds advanced by regional disbursement centers. Cashiering operations are supervised by U.S. disbursing officers located at those centers. To improve controls over cashiering, in 1993, the Committee recommended that State fully fund the implementation of a worldwide standardized and integrated financial management system, adopt standardized accounting systems, increase monitoring and oversight of overseas cashiering operations, improve oversight of U.S. disbursing officers operations to ensure that transactions and accounts are properly recorded and reconciled, and require all posts to train staff in safeguards and procedures to prevent theft or misuse of official funds. State has not fully implemented the computerized Integrated Financial Management System; therefore, controls over cashiering continue to be manual and dependent on noncompliant financial systems in the majority of overseas posts. Although reconciliations are required monthly at overseas post, only about one-third of embassies’ cashiering operations are currently reviewed each year by external review teams from the State’s Financial Service Centers. Headquarters officials said that losses have been minimal, but acknowledged that major problems could occur. To gain control over disbursing operations overseas, State has centralized 18 of 19 disbursing operations with its 3 regional administrative management centers and plans to relocate the 1 remaining operation (Brasilia). State’s Deputy Chief Financial Officer and Deputy Assistant Secretary for Finance initiated this action to improve oversight and management controls over disbursing. State also created the Office of Overseas Financial Management and Oversight under the Chief Financial Officer. However, officials from this office said that fiscal irregularities were continuing due to (1) the lack of trained U.S. Foreign Service officers and nationals on cashiering practices, (2) negligence, and (3) malfeasance. To address the Committee’s recommendation to train staff on financial controls, in June 1994, at the Regional Administrative Management Center in Mexico City, State trained about 40 budget and fiscal officers and 40 supervisory Foreign Service nationals from the posts in Mexico on safeguards and procedures to prevent theft or misuse of funds. However, State officials said more regional training was needed for the hundreds of Foreign Service nationals supporting State’s budget and fiscal operations overseas. In 1993, the Committee recommended that State (1) develop and implement systems that identify and report on overseas medical expenses paid, claims filed, and amounts reimbursed to the government and (2) require all Foreign Service officers serving overseas to carry private medical insurance. State’s Office of Medical Services now assigns an obligation number for each medical claim and authorizes payment by the overseas posts. The embassy notifies the office of each payment, and an accounts receivable and corresponding billing documents are then established in the Central Financial Management System. These actions resulted in collections of over $1 million in fiscal year 1994, including funds owed since 1991. According to a Medical Services official, the collection system applies to State employees only. It does not cover employees of other agencies that may receive medical services overseas. Although State still does not require Foreign Service officers to have private medical insurance before they are assigned overseas, it has stopped paying claims for hospitalization of those without insurance with the exception of the hospital admission charge, which must be promptly reimbursed. In 1993, the Committee called for increased oversight of operations by senior officials both in Washington and at the embassies. State officials acknowledged that a greater emphasis should be placed on management controls, and that commitment and support should come from the top. To enhance senior managers’ commitment at posts, State has introduced a number of actions intended to address the managers’ systemic disregard for sound management practices and establish accountability for carrying out headquarter’s requirements. For example, State now emphasizes the importance of management controls and responsibility for those controls to newly appointed ambassadors during preassignment briefings and in the Secretary’s Chief of Mission Authority Letter. The Chiefs of Mission are required to develop a Mission Program Plan that will form the basis for the missions’ major activities and resource allocations and have the plan approved by the Assistant Secretary of State. They are also required to reduce mission costs whenever possible, implement sound management controls to ensure that government resources are maximized and protected, and certify annually that management controls are adequate. Another action to increase senior-level attention to embassy management included the addition of a management control segment to the training course for new Deputy Chiefs of Mission. This segment defines management controls, emphasizes using the Mission Program Plan, and encourages the use of the risk assessment questionnaire. In addition, the risk assessment questionnaire was revised to include questions covering the minimum controls necessary for facilities maintenance, contracting, and medical reimbursements. These initiatives were inconsistently applied at the posts we visited. However, as discussed below, posts that employed sound management practices had the active involvement of the Deputy Chief of Mission serving as a Chief Operating Officer. Some embassies have implemented practices on their own to improve administrative operations. Practices, such as those we observed in Ankara, Tunis, and Dhaka, could be used by other embassies to strengthen management controls, reduce costs, foster accountability, and increase compliance with applicable regulations. Embassies in Ankara, Tunis, and Dhaka introduced operational improvements to address and correct continuing deficiencies in the areas of property management, training, contract administration, and cashiering. For example, in Tunis and Ankara, setting performance targets for inventory control and accountability resulted in more efficient property utilization and reduced losses from theft. Cross-training programs for Foreign Service nationals within the budget and finance offices in Tunis and Ankara increased their supervisors’ flexibility to fill staffing gaps and enhanced morale among their subordinates. In Tunis and Dhaka, the implementation of internal control checklists for contract administration ensured that their contracting and procurement operations were in compliance with regulations. All three posts have developed systems for tracking and collecting accounts receivables, which resulted in more accountability, cost savings, and reduced vulnerabilities to fraud, waste, and abuse. Table 1 summarizes the initiatives at these posts. We discussed these practices with State Department officials in Washington, D.C., and determined that the initiatives could be used to improve operations at other posts, as applicable. They said that many of these practices could be introduced by the post planning processes and would greatly assist in their efforts to achieve real management reform of embassy operations. As budget uncertainties continue, implementation of these practices could provide overseas managers with more flexibility in managing their operations. These posts had two other practices in common—the direct involvement of senior officials in post’s operations and the use of existing management tools to address deficiencies. These practices could also be replicated at other embassies. At embassies in Ankara, Tunis, and Dhaka, the Deputy Chiefs of Mission and sometimes the Chiefs of Mission are directly involved in embassy administration. The commitment of these officials to management was demonstrated through regularly scheduled meetings to discuss management issues, an open-door policy for the resolution of problems, and daily reviews of management operations. The Deputy Chiefs of Mission served as the Chief Operating Officer at all three missions. These officials emphasize a zero-tolerance policy for inadequate management controls. They use management reviews and performance evaluations to hold section managers accountable for adequate internal controls and corrections of management deficiencies. In addition, the Deputy Chiefs of Mission regularly reinforce the importance of internal controls to administrative staff through counseling, according to embassy officials. Embassy managers stressed the importance of senior management involvement in the management of operations and said senior officials set the tone for how well their administrative staff will manage embassy operations. Reports by State’s OIG have documented the critical link between the emphasis placed on internal controls by senior officials and the attention given to the management issues throughout the embassy. Senior managers at embassies in Ankara, Tunis, and Dhaka have successfully used existing, agencywide reporting requirements to address and correct management deficiencies. These include the Mission Program Plan, risk assessment questionnaire, and certification of internal controls. In 1990, the mission program planning process began. The Mission Program Plan is a long-range planning document that is updated annually to address the objectives of the mission and the resources needed to fulfill those objectives. It addresses all areas of embassy operations, including administrative operations. According to State guidance, the plan should include milestones for critical progress points and completion of action. The plan also has a performance and evaluation component. The Mission Program Plans for the embassies in Ankara, Dhaka, and Tunis all incorporated detailed statements of objectives and responsibilities within the administrative section, which helped management focus attention on identifying problems and developing corrective action plans. For example, in Ankara the Mission Program Plan establishes time frames for the correction of management deficiencies, and identifies offices that are accountable for the corrections. According to officials in the Office of Management and Planning, State is encouraging the posts to use this mechanism to address management weaknesses and increase accountability by tying resource allocations to objectives of the plan (see app.I). While there are few posts that currently do this, our review indicates that using the Mission Program Plan to address deficiencies would be consistent with our recommendation that each post establish a proactive management improvement plan. The risk assessment questionnaire identifies internal control weaknesses. State’s policy requires posts to complete these questionnaires just before an inspection by the OIG, which usually occurs every 4 to 5 years. However, to help ensure adequate internal controls at the posts, State sent a February 1994 cable to all overseas posts that encouraged them to use the risk assessment questionnaire as frequently as local conditions warrant. The embassies at Ankara, Dhaka, and Tunis have used the risk assessment questionnaire at least once a year to assess administrative weaknesses. The questionnaires have provided input for the planning process and served as a foundation for the annual certification of internal controls. These posts also used the questionnaire to link management controls to goals and objectives in the Mission Program Plan. For example, in Ankara, administrative officers developed detailed corrective action plans, including milestones, based on the results of their questionnaires. Officials at these posts agreed that the questionnaire was an excellent management tool for identifying potential problems and that it can be completed with minimal effort. Officials in Washington asserted that all embassies should use the questionnaire on a more frequent basis. Officials in the Office of Finance and Management Policy said they encourage posts to use the questionnaire as a self-assessment management tool and find that posts that are concerned about management use the questionnaire annually, and posts less concerned about management only use the questionnaires prior to an inspection. The Chiefs of Mission are required by the Secretary of State to certify the adequacy of management controls each year. These certifications are to aid the Secretary of State in preparing the annual report required by the Federal Managers’ Financial Integrity Act. The mission chiefs at the embassies in Ankara, Dhaka, and Tunis said they did not sign their certifications until they were sure that spot checks had been conducted to ensure the veracity of the certification. Officials in the other four posts we visited did not use the questionnaire to validate their certifications and their Chiefs of Mission relied solely on their administrative officer’s opinion without conducting spot checks in certifying the posts’ internal controls. We recommend that the Secretary of State expand the operational improvements discussed in this report to a minimum of 50 other embassies on a test basis to help improve operations. If the test demonstrates the applicability of these improvements in a variety of posts, the practices should be further expanded until the maximum benefits are achieved. In commenting on a draft of this report, State Department officials stated that improving the management of its overseas operations was a high priority and that it would like to see the overseas posts use the practices that we identified as a positive management tool in ways that make sense for their particular circumstances and environments. State believes it needs to provide overseas posts with information on the initiatives of other posts, but it does not want to make the implementation of such practices a requirement. We do not believe that relying on voluntary adoption of these practices will produce the maximum benefits. The management deficiencies have existed for decades. However, because our findings were focused on only a few overseas posts, and State points out that overseas posts operate in different environments, we have modified our position from one that would require all posts to immediately implement the recommended improvements. We believe that if State is serious about trying to improve management of its overseas operations, then out of its more than 260 posts, it should be willing to pilot test the recommended actions at a minimum of 50 posts. If the pilot demonstrates the applicability of these improvements in a variety of posts, then State should continue to expand the use of these practices until the maximum number of posts benefit. The Department of State’s comments are presented in their entirety in appendix II along with our evaluation of them. We interviewed State Department officials in Washington, D.C., who are responsible for embassy management oversight, to assess actions taken by State to improve the management of its overseas operations. We analyzed documentation related to embassy management improvements provided by functional managers and documented continuing management deficiencies from State OIG reports. (See app. III for a listing of related GAO and OIG reports.) In addition, we observed good embassy practices that could be used at other embassies. We selected these embassies based on (1) State OIG reports that identified good management practices at these posts and (2) the recommendations of post management officers responsible for embassy oversight. Overall, we reviewed operations at U.S. embassies in Venezuela, Tunisia, France, Portugal, Turkey, Philippines, and Bangladesh. We performed our work from April 1994 to November 1995 in accordance with generally accepted government auditing standards. Please contact me at (202) 512-4128 if you or your staff have any questions concerning this report. Major contributors to this report are listed in appendix VI. State’s primary means for linking foreign policy objectives and resources is the program planning process. In a November 1994 cable to all diplomatic and consular posts, the Under Secretary for Management informed the Chiefs of Mission that the link between resources and the mission program planning process was missing; consequently, budget reductions were enacted without thought to the future. The Under Secretary instructed mission management to develop a mission program plan that reflects mission priorities in both policy and management areas, actively involves all mission elements in its preparation, and serves as an instrument for continuous management improvement. State guidance to embassies for preparing the Mission Program Plans (MPP) for fiscal years 1995 through 1999 attempts to build on previous planning efforts and encourages posts to embrace MPP as a management creed of continuous improvement to support the Department’s goal of building an efficient organization. This guidance directs embassies to use MPP as a tool to measure progress in achieving mission objectives, including examining innovative and lower cost ways to deliver administrative support. More importantly, State guidance instructs embassy managers to document how they will address material weakness in administrative areas when reducing administrative staff. The structure of MPP supports a proactive management improvement effort. MPP has an administrative section that reviews financial management, cashiering, procurement, supplies, and warehousing. In addition, MPP has a status of progress section that tracks progress on administrative and other mission goals. The Under Secretary for Management’s guidance encourages senior managers to personally assist in the preparation and implementation of the plan by (1) objectively measuring or validating results and adjusting performance through a regular, systematic process; (2) providing personal leadership and involvement; and (3) holding others accountable on a regular basis. Senior officials are also directed to establish incentives to help institutionalize the use of MPPs. To fully achieve these goals, recent headquarters actions have attempted to link embassy staff work requirements to mission program plans. One of these actions was to require that objectives of MPP be reflected in work requirements statements so that performance can be linked to the successful achievement of MPP goals. Assistant secretaries are also instructed to evaluate the performance of Chiefs of Missions based on the successful achievement of MPP objectives and their diligence in evaluating subordinates’ performance against MPP objectives. To assist posts in using MPP to manage resources, the Under Secretary for Management issued 5-year staffing and funding levels for each geographic bureau. Bureaus use MPPs to review current resource deployments against policy priorities and determine the optimal match of resources and post needs. Both the Bureau of Diplomatic Security and the Bureau of International Organization Affairs have established exemplary bureau planning processes. The Bureau of Diplomatic Security initiated an operational planning system in fiscal year 1987 to establish specific goals and monitor progress in security programs receiving funds from the Supplementary Diplomatic Security budget. This effort has become known as the Milestone Program. The program, which is administrated by the Bureau’s Office of Policy, Planning, and Budget, expanded in fiscal year 1988 to include all bureau programs. The Milestone Program applies management-by-objectives criteria to the security programs managed by the Bureau. Elements of the program include: meeting monthly to discuss program performance, problems, and modifications and revise milestones for the next cycle; tracking activities to specific program objectives; establishing performance measurements to keep programs in compliance; tying financial information to program milestones and continually analyzing ways to contain costs and streamline activities; and fully integrating the Bureau’s planning process with its milestones. Likewise, the Bureau of International Organization Affairs’ Internal Controls Plan uses a management-by-objective process that links foreign policy and management priorities to resource allocations. According to Bureau officials, this plan allows the Bureau to identify internal control weaknesses and better allocate resources. Program planning officials believe elements of these programs can significantly improve planning efforts at other bureaus. The following are GAO’s comments on the Department of State’s letter dated November 8, 1995. 1.We have modified our report by stating that branch officials said that 14 of the 20 posts visited failed to provide documentation that physical inventories were conducted. We also footnoted that 12 of the posts subsequently submitted the required certification at a later date. 2.We have modified the report in line with the comment. 3.We agree that a single automated system for processing travel vouchers is needed. However, replication of individual post systems that work could be beneficial to other posts until State is able to implement a uniform system for vouchers processed overseas. 4.Standardized procedures for tracking accounts receivable and other collections have long been needed in State. However, we believe that until standard procedures are implemented, application of automated systems used at individual posts would prove useful. 5.We did not recommend that State centrally develop manuals for all posts. However, State’s endorsement of standard operating procedures manuals for each post could encourage individual posts to develop manuals consistent with their individual needs and conditions. 6.Although State described this practice as a standard procedure, our review indicated that only a few posts were actually performing this internal control procedure. 7.Completion of the risk assessment questionnaire annually by the posts would optimize the use of this document, which has been endorsed by the State Department as an excellent management tool. We do not believe that it is necessary for Washington to score and evaluate the questionnaires on an annual basis. Instead, the posts could use and score their own questionnaires for self-assessment purposes during the annual certification process. 8.The Secretary of State’s endorsement of the use of best management practices throughout State’s overseas system, where applicable, would help demonstrate a commitment from the top to improve management at the overseas posts. It would also encourage the use of best practices, such as automated travel voucher and accounts receivable tracking system, on a greater scale until agencywide systems are available. Internal Controls: State’s Controls Over Personal Property Management Are Inadequate (GAO/NSIAD-87-156, June 10, 1987). Embassy Contracting: State Department Efforts to Terminate Employee Association Contracts (GAO/NSIAD-88-85, Feb. 16, 1988). Overseas Support: Current U.S. Administrative Support System Is Too Complicated (GAO/NSIAD-88-84, Mar. 25, 1988). State Department: Status of Actions to Improve Overseas Procurement (GAO/NSIAD-92-24, Oct. 25, 1991). State Department: Need to Ensure Recovery of Overseas Medical Expenses (GAO/NSIAD-92-277, Aug. 7, 1992). Financial Management: Serious Deficiencies in State’s Financial Systems Require Sustained Attention (GAO/AFMD-93-9 Nov. 13, 1992). High-Risk Series: Management of Overseas Real Property (GAO/HR-93-15, Dec. 1992). State Department: Management Weaknesses at the U.S. Embassy in Mexico City, Mexico (GAO/NSIAD-93-88, Feb. 8, 1993). State Department: Management Weaknesses at the U.S. Embassies in Panama, Barbados, and Grenada (GAO/NSIAD-93-190, July 9, 1993). State Department: Survey of Administrative Issues Affecting Embassies (GAO/NSIAD-93-218, July 12, 1993). State Department: Widespread Management Weaknesses at Overseas Embassies (GAO/T-NSIAD-93-17, July 13, 1993). Financial Management: State’s Systems Planning Needs to Focus on Correcting Long-Standing Problems (GAO/AIMD-94-141, Aug. 12, 1994). State Department: Additional Actions Needed to Improve Overseas Real Property Management (GAO/NSIAD-95-128, May 15, 1995). Financial Management Overseas, State Department Inspector General Report (O-FM-008, Jan. 15, 1990). Overseas Foreign Affairs Administrative Support Costs, State Department Inspector General Report (1-FM-005, Dec. 20, 1990). Overseas Procurement Programs, State Department Inspector General Report (1-PP-004, Jan. 29, 1991). Management Improvements in Embassy Cairo’s Administrative Operations, State Department Inspector General Report (3-FM-003, Jan. 12, 1993). Report of Inspection, Embassy Paris, France (ISP/I-93-10, Mar. 1993). Buildings Overseas-Maintenance and Repair, State Department Inspector General Report (3-PP-014, Sept. 14, 1993). Report of Inspection, Embassy Ankara, Turkey and its Constituent Posts (ISP/I-94-02, Oct. 1993). Recovery of Overseas Medical Expenses, State Department Inspector General Report (4-SP-003, Feb. 9, 1994). Report of Inspection, Embassy Tunis, Tunisia (ISP/I-94-20, Mar. 1994). Management of Overseas Travel Services, State Department Inspector General Report (4-SP-009, Feb. 22, 1994). The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a congressional request, GAO reviewed the Department of State's efforts to improve the management of its embassies, focusing on whether State has responded to previous recommendations concerning embassy management. GAO found that: (1) State has not responded to the recommendation that it establish proactive management improvement programs at its overseas posts because it believes that its approach of targeting specific areas for improvement is more appropriate and achieves comparable longterm results; (2) State has initiated action on some congressional recommendations to improve its embassy management, but deficiencies continue in controls over personal property, training for U.S. and foreign service personnel, contracting and procurement practices, controls over cashiering functions and medical insurance reimbursements, and senior-level oversight; (3) the embassies in Turkey, Bangladesh, and Tunisia have initiated management practices, such as tracking accounts receivable, automating travel vouchers, strengthening internal controls, improving regulation compliance, reducing costs, and enhancing efficiency and effectiveness; and (4) embassy senior managers participate in the day to day operations of their posts and use existing reporting requirements to document administrative problems and decide on appropriate corrective actions. |
ANNOUNCEMENT: Thursday, July 3, 2014: We are happy to report that the eaglet is now using perches outside the nest bowl and flying. If the bird is not in the nest it is most likely exploring nearby. It will continue to return to the nest for at least the next few weeks. We fielded a number of calls and inquires related to the status of the bird and felt it useful to share these observations with the many webcam viewers. As always thank you for your support in this endeavor and for enjoying this window into the natural world. Regarding concerns about sounds-the camera and microphone are about 55 feet from the nest and the slope to the bay acts a bit as an amphitheater for sound for two nearby properties. Activity such as this has not been a disturbance to nesting eagles in the past at this site. Indeed, eagles have selected this site for their nest.
ANNOUNCEMENT: Monday, June 23, 2014: Many thanks for enjoying the Maine Eaglecam1. Regarding the many inquiries, calls, and concerns related to the nesting eagles and their offspring at this site, we do not intend to remove the remaining eagle chick from the nest. We have been in contact with many individuals and agencies to determine the best path forward after one chick perished over the weekend. The remaining eaglet is being fed by adults and it is ALWAYS best for young eagles to develop bonds and learn life skills from parent eagles. Though there is always uncertainty in the natural world, all signs point toward this chick being successful. To comment on the 2nd chick in this nest that perished over the weekend: this unfortunate event occurs regularly in eagle nests. From an evolutionarily perspective, additional eggs or chicks in a nest offer an "insurance policy" of sorts in the event that an egg does not hatch or that a particular year may offer abundant food to support more than one, and up to three, chicks. By any measure, a single eagle surviving to the fledgling stage is a great success for eagles.
While we understand the strong urge to intervene in circumstances that may be difficult to observe, there are many reasons - biological, ethical and legal - to allow nature to take its course. We understand that our decision not to intervene may be difficult for some viewers, but we continue to maintain that the Maine Eagle webcams are an opportunitiy for citizens and students to observe the natural world in it's purest form and to understand the many pressures that wildlife face.
Some positive news to keep in mind is that Eaglecam1 is just one of over 600 eagle nests found in Maine during the 2013 annual nest census. This represents a continued increase in eagle abundance over the past three decades. For general information about eagles we encourage you to visit this informative webpage from the Cornell Lab of Ornithology. If you are interested in learning more about BRI's eagle research visit us here.
If you seek further information about this feel free to contact us at [email protected]. All the best from Biodiversity Research Institute
Welcome to BRI’s live eagle webcams. Video cameras located at two separate eagle nests provide live feed of nesting bald eagles. The cameras feature pan tilt and zoom abilities to enrich our observations. These nests are located in Maine and have a long history of use and nesting success. Activity can occur at the nest at any time. Breeding activity will typically take place between March and July. Join in the conversation in BRI's NING online community and join us on twitter and facebook for updates.
BRI’s first eagle cam, which was installed in February 2006, captured the successful nesting of a pair of eagles in the spring of that year—two young eagles, or nestlings, survived.
Eagles build their nests (which may reach as wide as 10 feet across and weigh up to one-half ton) near the top of large trees, typically close to lakes and rivers. Breeding bald eagles lay eggs once each year, usually in early spring; the eggs, up to three in a clutch, hatch in about 35 days. The young eagles, called nestlings, learn to fly by three months of age, and can be on their own about a month later.
In addition, we would like to thank the following organizations fro their collaborative support involving our webcams - Maine Department of Inland Fisheries and Wildlife and the US Fish and Wildlife Service.
*Biodiversity Research Institute is not responsible for the content of any advertising presented through UStream,
the service provider for our live video broadcast. ||||| PORTLAND, Maine (AP) — Wildlife webcam operators around the world are grappling with a problem: Viewers don't want to see any harm come to critters they've grown to love.
This still image from streaming online video provided by Biodiversity Research Institute shows an adult bald eagle, center, feeding a young eaglet Wednesday afternoon, June 25, 2014 in a nest at an undisclosed... (Associated Press)
Officials caved in to protests about the grittier side of nature last month in Minnesota, attempting to rescue a baby eagle with a broken wing. In coastal Maine, a struggling eaglet died last weekend after wildlife experts decided to let nature take its course, triggering outcry from viewers across the country.
Such reactions are understandable but misguided, experts say.
"The nest cam is more of a mirror to reflect what's going on with all eagle nests. It's not to be used as a baby monitor to intervene when we see something that makes us feel sad as humans," said Erynn Call, a raptor specialist with the state of Maine.
People's empathy is triggered by cuddly animals, especially the plight of a single creature as opposed to larger group that's suffering, said Nicholas Epley, professor of behavioral science at the University of Chicago.
Nonetheless, experts are loath to get involved.
"The general view is not to intervene," said Patrick Keenan from the Biodiversity Research Institute in Maine. "These are wildlife. They're not pets."
All told, there are hundreds of wildlife webcams showing everything from polar bears to peregrine falcons to clown-like seabirds called puffins. Viewers see remarkable things, like bears catching salmon, or eagles hatching from eggs.
But it's not always pretty.
Two summers ago, viewers watched "Petey" the baby puffin starve on a Maine island because the only available fish were too big to fit in his beak. Viewers begged this spring for someone to do something for a Maine osprey that suffered from a condition causing it to bleed from underneath its eyes.
"Every year, we show polar bears that are starving while waiting for the ice to freeze. People are like, 'Feed the bears!' No, we're not going to feed the bears," said Jason Damata from explore.org, which has about 50 wildlife webcams running at any given time.
Viewers of a webcam sponsored by the Biodiversity Research Institute demanded that wildlife experts do something when it seemed that the parents had abandoned the pair of bald eaglets in Hancock County.
Viewers who watched one of two eaglets die last weekend bore witness to what's happening in many of the more than 600 eagle nests across Maine, said Call, who works for the Department of Inland Fisheries and Wildlife. In general, it's a success when one of two eaglets survives to leave the nest, she said.
But sometimes the pressure to intervene can be too great. In Minnesota, wildlife officials last month were pressured to try to save a baby eaglet with a broken wing. In the end, the eaglet had to be euthanized.
Portia Reid of Dallas, who's watched the Maine eagle nest for three seasons, said she would've supported having someone shimmy up the tree to save the surviving eaglet from starvation if its parents hadn't returned to the nest.
"When you invite humans in, be prepared for human emotions. The majority of (bird watchers) accepts the raw nature of survival of the fittest and understands the no-intervention policy. However, there are cases where intervention is needed," she said.
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Online:
Eagle webcam http://www.briloon.org/eaglecam1
Additional wildlife webcams http://explore.org/ ||||| Concerned viewers from across the country have been focusing on a Maine eagle nest featured on a webcam, demanding that wildlife professionals intervene to help an eaglet they say is not being fed properly by its parents.
But officials with the Biodiversity Research Institute, which has maintained the camera at a coastal nest site since 2006, and the Maine Department of Inland Fisheries and Wildlife say there will be no interference with the nest and no intervention on behalf of the eaglet.
Web viewers also say they watched as a second eaglet was killed by its sibling.
Ann Pegher of Pittsburgh called the BDN to voice her concern. She said she’s not typically an activist but was prompted to call after watching the webcam feed over the past few weeks.
“I spent all day [Monday] trying to contact every government agency, rescue agency,” Pegher said. “Nature is nature, I agree with that. But there are eagle cameras all over the country, and when there are eaglets in distress, action has been taken … it happens all the time. I don’t understand their lack of even considering doing anything. It’s just a cold-hearted, ‘No, we’re not going to interfere with nature.’ That I don’t understand.”
Eryn Call, a wildlife biologist who specializes in raptors for the Maine Department of Inland Fisheries and Wildlife, explained the department’s philosophy on Monday.
“The purpose of these cameras is to observe the natural process of nesting eagles,” Call said. “And that natural process includes fledglings dying, starving to death, being killed by their siblings, adults stopping feeding them if there’s not enough food, and sometimes it does involve a happy ending with both birds surviving.”
Call and Department of Inland Fisheries and Wildlife bird group leader Brad Allen said that nature is sometimes messy and that while viewing webcams such as Maine Eaglecam1 can be fascinating, they may illuminate aspects of the natural world that some find distasteful.
“I came up with an analogy to think of these webcams as a mirror reflecting what’s going on with all of the bald eagles in Maine,” Call said. “It’s not a baby monitor where at the first sign of something that we perceive as said, as humans we intervene.”
Maine has a long history of eagle research, including about 30 years of work by Department of Inland Fisheries and Wildlife biologist Charlie Todd. Todd is focusing on endangered species, but he did pass along an email of observations for Call to share.
Todd said the best outcome for an individual eaglet takes place when the parents are the ones providing care in the nest and on-the-wing training.
“Interventions break that bond, so they are always done only out of necessity,” Todd said. “Siblings can be hostile to each other when food resources are scarce, but at least the dominant bird survives. Past interventions are limited to circumstances like dead adults, destroyed nests, etc., where there is no hope without remedial action.”
Todd said that in this case, with one eaglet already dead, the damage has been done.
“There is no reason to intervene now since adults are still present, and the surviving eaglet has better odds for long-term survival by experiencing continued parental care and normal development,” Todd said. “Casual webcam viewers may not see an adult eagle, but this is also a natural outcome of normal development: Adults spend less time at the nest purposefully to encourage eaglet development. They are not absent, but simply watch more often from a distance.”
Commenters on the Biodiversity Research Institute website say that this pair of adult eagles has not provided well for its young in the past and an intervention is necessary.
Pegher agrees, but she did say that after fearing that the parents were not feeding the eaglet, the adults did take food to the nest over the weekend.
“If there’s an issue with parents not caring properly … you have that issue with any animal, including humans,” Pegher said. “I think it’s a cop-out [to not intervene], and I don’t think it enhances any kind of research.”
Pegher said she understands how nature works but expects humans to help when they can.
“I think when you’re viewing, you also have a responsibility and a duty to step in if necessary,” she said. “The big issue is determining when it is necessary.”
Patrick Keenan, Biodiversity Research Institute outreach director, could not immediately be reached for comment on Tuesday, but the group did acknowledge the concern of viewers in a website post on Monday.
“Regarding the many many inquiries, calls and concerns related to the nesting eagles and their offspring at this site, we do not intend to remove the remaining eagle chick from the nest,” the statement reads. “We have been in contact with many individuals and agencies to determine the best path forward after one chick perished over the weekend … while we understand the strong urge to intervene in circumstances that may be difficult to observe, there are many reasons — biological, ethical and legal — to allow nature to take its course.”
A similar situation developed in Minnesota recently and was featured in a New York Times story over the weekend. In that case, Minnesota’s governor did intervene after receiving pressure from webcam watchers. An eaglet was taken from the nest, and biologists determined that it had a severely injured wing. It was euthanized.
And in May, an adult female eagle and her presumed mate each fell ill in Bangor, apparently after ingesting a toxin. The male flew into a power line and was electrocuted.
After a successful intervention, two eaglets were rescued from their nearby nest. The female adult was taken to a rehabilitation facility and later released back into the wild.
Call said that situation called for a different approach.
“There was clear evidence of contaminants, of some sort of poison that they were exposed to — a human cause of that situation,” Call said. “We felt more obligated because of the human cause to intervene in that situation, where this is a natural process of birds, of one dying and one potentially not being fed by the parents.” ||||| Baby eagles die. It's nature. But when it occurs on a webcam, it becomes personal. Over the weekend, a chick in a camera-monitored nest in Maine perished, and those watching knew that it was coming.
The parents seemed to have abandoned the nest, which held two eaglets. There were calls by the public for wildlife officials to step in and save the chick. But officials decided not to, and the baby died.
Those at the Biodiversity Research Institute, the organization behind Eaglecam1, have fielded "many inquiries, calls and concerns" about the eaglets -- including a push to have the still-living chick removed from the nest, according to its website.
They're not going to do it.
A few decades ago, the story likely would have been very different, Maine wildlife official Charlie Todd told the L.A. Times.
"Back in the '70s, each individual [eagle] mattered," said Todd, endangered species coordinator with the Inland Fisheries & Wildlife department. "On two hands, you could count how many baby eaglets were hatched in Maine in a given year."
So Todd said there probably would have been a rescue effort for one dying eaglet. In 1973, Maine had 31 nesting pairs of eagles. By 2013, there were 631. Eagles were taken off Maine's threatened species list in 2009.
That's the big-picture reason, he said, why a strategy that's "perhaps more in people's comfort zone" isn't necessary now -- or even feasible with so many nests. "We wouldn't get much else done."
Commenters at the institute's site on Thursday morning seemed resigned, calling the death of the smaller of the eaglets "so sad" but "nature's way."
"The remaining eaglet is being fed by adults, and it is always best for young eagles to develop bonds and learn life skills from parent eagles," a statement on the institute website reads. (Efforts to reach the institute were unsuccessful as of the publication of this post.)
Those commenters who were keeping an eye on the birds reported an adult feeding the surviving eaglet but also noted that the chick and the adult ate the remains of the eaglet that had died. Nature can be gritty.
Raptor specialist Erynn Call told the Associated Press the webcam was not "a baby monitor." And Todd agreed.
"It's hoped the webcam can bring information to people," he said, "as opposed to triggering action." The death of an eaglet "is just reality in more than a few nests in Maine and elsewhere."
The good news for concerned Eaglecam1 viewers: It looks like the remaining chick has a good shot at survival, according to the institute.
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917.692..4133 | People keeping an eye on two baby eagles via a nest webcam in Maine got a lesson last weekend in just how brutal nature can be: One of the eaglets attacked its sibling for all the world to see, reports the Bangor Daily News. That prompted pleas from all over to the operator of the webcam, the Biodiversity Research Institute, to intervene and save the struggling eaglet. But wildlife experts opted to let nature take its course and the bird died. Observers say it was cruel, but a state raptor specialist sums things up this way to the AP: "The nest cam is more of a mirror to reflect what's going on with all eagle nests. It's not to be used as a baby monitor to intervene when we see something that makes us feel sad as humans." In this case, webcam observers argued that they hadn't seen the parents in a while and figured the nest had been abandoned. Nope, says another state specialist. It's common for adults to pull back as their chicks get older, and that's what happened here. An adult has since been spotted feeding the remaining eaglet, which now stands a better chance of survival given the lack of competition. In fact, much to webcam watchers' displeasure, the adult and the eaglet ate the remains of the bird that was killed, notes the Los Angeles Times. "The general view is not to intervene," says an official with the research institute. "These are wildlife. They're not pets." (Researchers elsewhere caught a rarity on film: an eagle attacking a deer.) |
4 years ago
Washington (CNN) - As the crisis in the Ukraine continues, a new national poll indicates that for the first time in more than a decade, more than half of Americans see Russia as a serious threat to the U.S.
A CNN/ORC International survey released Friday also indicates that Russian President Vladimir Putin's unfavorable rating among Americans has soared over the past month. And the poll indicates that the vast majority of the public says Moscow's actions in neighboring Ukraine break international law, and half of those questioned say a new Cold War between the U.S. and Russia is likely.
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Read full CNN/ORC International survey results here.
According to the poll, 69% of Americans say they see Russia as threat to the U.S.
"That's a 25-percentage point increase since 2012 and represents the highest number on that question since the break-up of the Soviet Union," says CNN Polling Director Keating Holland.
Thirty-one percent now say they don't see Russia as a threat, down from 53% two years ago. The poll indicates that Americans place Russia in the same ballpark as North Korea (71%) and Iran (70%) when it comes to being seen as a threat to the U.S.
Only 11% of those questioned say they have a positive view of Putin, with 68% saying they see him in a negative way.
"The numbers are pretty clear on the Russian president. Americans really don't like Vladimir Putin, whose unfavorable rating has jumped 14 points since early February," Holland added.
No let up in crisis
The poll's release comes as some 8,500 Russian troops staged snap military exercises close to the border with Ukraine. It also comes just two days before the pro-Russian government in Ukraine's autonomous region of Crimean has scheduled a referendum in which residents of the peninsula will vote whether to secede from Ukraine and join Russia or to choose effective independence. Ukraine's interim government in Kiev, as well as U.S. and European leaders, have warned that the vote is illegitimate.
Russia has said that it has the right to intervene in Ukraine to protect ethnic Russians from "fascists" and nationalists. It denies that its forces are militarily involved in Crimea, despite evidence to the contrary. Crimea is an ethnic Russian-majority peninsula in the country's southeast where local officials have declared their allegiance to Russia and armed men have blockaded Ukrainian military sites.
The U.S. Senate is weighing legislation that could impose economic penalties on Russians involved in the intervention in Crimea. The measure would represent some of the toughest sanctions on Moscow since the end of the Cold War.
A new Cold War?
The poll indicates that more than seven in ten believe that there's no justification for Russia's actions in Ukraine and more than eight in ten say Russia has violated international law.
Four in ten say they worry about the possibility of nuclear war with Russia and nearly half believe that a new Cold War is likely in the next few years.
The poll was conducted for CNN by ORC International from Friday through Sunday, with 801 adults nationwide questioned by telephone. The survey's overall sampling error is plus or minus 3.5 percentage points.
CNN Political Editor Paul Steinhauser contributed to this report ||||| The Ukraine crisis has entered a new and more dangerous phase after 11th-hour talks in London between the US secretary of state, John Kerry, and his Russian counterpart, Sergei Lavrov, broke up without resolution.
The diplomatic failure sets Russia on a collision course with the west, with Moscow ordering further military deployments on Friday and a contentious referendum in Russian-dominated Crimea set to go ahead as planned on Sunday.
The referendum, which will almost certainly result in a vote in favour of breaking away from Ukraine and union with Russia, will trigger the imposition of sanctions by the west on Monday.
During five hours of talks, Kerry pushed Lavrov to postpone the referendum. He challenged him over sudden Russian troop movements along the Ukrainian border over the last few days. But Lavrov offered nothing in the way of a concession that would have helped reduce tensions.
At a press conference afterwards, the Russian foreign minister described the talks as productive, in that both sides were able to set out their positions, but the two sides did not share "a common vision". Looking for a way to emphasise his point, Lavrov sought an international parallel: Crimea meant more to Russia than the Falklands did to Britain.
At a separate press conference, Kerry, looking tired and dejected, said he had put forward proposals from Barack Obama, but Lavrov replied that Vladimir Putin was not prepared to consider them until after the referendum.
Trying to sound emollient, Kerry repeatedly insisted he was not issuing warnings or threats to Russia. But he went on to say the US would not recognise the outcome of the referendum and that there would be costs for Russia if it went ahead.
His strongest comment came when he described the proposed referendum as "a back-door annexation" that would breach international law.
Asked about troop deployments, Kerry said: "We talked about these exercises, and we talked about the level of troops that are deployed, where they are deployed and what their purpose is, and I raised very clearly the increased anxiety that is created in the Ukraine as a consequence of this."
He suggested drawing all forces back while the negotiations took place, and said Lavrov had promised to take these proposals to Putin.
"All us would like to see actions not words," Kerry added.
Lavrov, at a separate press conference, insisted the referendum would go ahead as planned. Putin would "respect the will of the Crimean people".
Lavrov expressed concern over violence in Donetsk in eastern Ukraine overnight on Thursday. Casualties mounted from clashes between pro- and anti-Russian protesters there.
Graphic: Guardian graphics
The Russian foreign ministry said it reserved the right to intervene to protect Russian lives in Ukraine, the same language that led to its intervention in Crimea. The statement added to fears in Washington and in west European capitals that Putin may not stop with Crimea and may seek to extend influence over eastern Ukraine.
Protesters from a pro-Russian demonstration in Donetsk had fought with those from a rally "for a united Ukraine", resulting in the death of a 22-year-old man and injuryinjuries to a reported 26 people. Other reports said 28 people had been injured and that the young man had been stabbed to death.
After deploying 10,000 troops as well as heavy armour and artillery in border regions with Ukraine this week, Russia on Friday took further military steps, ordering six Sukhoi Su-27 fighter jets and three transport planes into its ally Belarus, on Ukraine's northern border. The Belarusian president, Alexander Lukashenko, had expressed concern over what he said was a potential Nato threat.
Kerry and Lavrov met at Winfield House, the residence of the US ambassador, in Regent's Park to discuss the crisis which began last month when anti-Russian protesters toppled the pro-Russian Ukrainian president Viktor Yanukovych.
Kerry pushed Lavrov to stop Russia taking steps escalating the crisis – creating "facts on the ground" – and instead open negotiations on alternative proposals for ending the standoff. One proposal was for Russian troops in Crimea to withdraw to their barracks and be replaced by troops from the pan-European Organisation for Security and Co-operation in Europe (OSCE).
Afterwards, Lavrov did not immediately embrace the OSCE proposal. "There is no need for an international structure in dealing with Russian-Ukrainian relations," he said.
Donetsk, the largely Russian-speaking city where many residents have close ties with Russia, declared a day of mourning on Friday. The city has been the site of repeated standoffs between pro- and anti-Russian demonstrators.
Ukrainian media said pro-Russian protesters attacked first, but the Russian foreign ministry and media reported that armed men had attacked peaceful pro-Russian demonstrators.
In a statement, the foreign ministry said Kiev was not in control of the situation in the country and had failed to guarantee demonstrators' safety.
"Radical far-right gangs armed with traumatic firearms and clubs, who began to arrive in the city from other regions of the country, attacked peaceful protesters who came out on the streets to express their attitude toward the destructive position of the people who call themselves the Ukrainian government," the ministry said.
The statement also hinted that Russian forces could intervene in eastern Ukraine to protect Russians there. "Russia recognises its responsibility for the lives of countrymen and fellow citizens in Ukraine and reserves the right to take people under its protection," it said.
The head of Ukraine's security service wrote on Friday on his Facebook page that four people had been detained in connection with the violence in Donetsk and that the detentions were "only the beginning".
Donetsk resident Anton Nagolyuk, who was present during the clashes, said they originated from the pro-Russian part of the demonstrations. The pro-Russian protesters had arrived at Lenin Square before the pro-Ukrainian ones, and police at first kept the two sides apart. The pro-Russian side threw eggs and firecrackers, and when the rally ended they started to beat pro-Ukrainian demonstrators, Nagolyuk said. The man who was killed was from the pro-Ukrainian side, he said.
"Some of the people definitely came from Russia to provoke people, but I don't know exactly how many of them there were," Nagolyuk said. "It's true there are many Donetsk residents among the [pro-Russian demonstrators], but it seems to me the most active ones are Russian."
According to Nagolyuk, many of his fellow residents fear Russia will invade their part of the country. "They were deliberately waiting for a death, an excuse to bring their troops and tanks into Donetsk, Lugansk and Kharkov," he said. "It seems to me almost everyone is afraid of war and Russian troops." ||||| The Ukrainian army braces for the worst while diplomatic efforts on Crimea in London fall short. (Reuters)
The Ukrainian army braces for the worst while diplomatic efforts on Crimea in London fall short. (Reuters)
Deadly clashes broke out in eastern Ukraine, officials said Saturday, after an 11th-hour U.S. effort to resolve the growing confrontation with Russia failed and Moscow shipped more troops and armor into the flash-point Crimea region.
The shootout between pro-Russian and pro-Ukrainian demonstrators took place overnight Friday in the eastern city of Kharkiv and left two people dead, acting interior minister Arsen Avakov wrote on his Facebook page Saturday. Tatiana Gruzinskaya, spokeswoman for the mayor, said the incident happened after a group of Russian separatists approached the offices being used by pro-Ukrainian activists. It was not yet clear whether the fatalities were pro-Russian or pro-Ukrainian, and activists on both sides were arrested, officials said.
The clash is likely to add to fears that Russia will expand its intervention beyond Crimea and into eastern Ukraine. While Russia has blamed such clashes on right-wing Ukrainians and on the new government, Avakov accused Russia of inciting the violence. “Hired provocateurs from a neighboring country are staging professional provocations,” Avakov said.
With a vote planned Sunday in Crimea on breaking away from Ukraine and rejoining Russia, Secretary of State John F. Kerry warned against a “backdoor annexation” by Russia of the strategic Black Sea peninsula. But Kerry conceded that six hours of talks in London with Russia’s top diplomat neither stopped Sunday’s vote nor opened a new diplomatic path for Moscow to step back from the Cold War-tinged standoff.
The most significant U.S. and European sanctions against Russia since the collapse of the Soviet Union appeared all but certain.
1 of 29 Full Screen Autoplay Close Skip Ad × Kerry in Europe to discuss Ukraine View Photos U.S. Secretary of State John F. Kerry on Friday morning held talks with Russian Foreign Minister Sergei Lavrov in a diplomatic push to ease the crisis over Russia’s military presence in a southern region of Ukraine. Caption U.S. Secretary of State John F. Kerry on Friday morning held talks with Russian Foreign Minister Sergei Lavrov in a diplomatic push to ease the crisis over Russia’s military presence in a southern region of Ukraine. March 14, 2014 U.S. Secretary of State John F. Kerry waits with staff members for a meeting with Russian Foreign Minister Sergei Lavrov at Winfield House, the home of the U.S. ambassador in London. Ahead of the meeting, Kerry said he hoped to end a standoff that threatens to divide Ukraine and lead the United States and Europe to impose economic and other sanctions against Moscow. Brendan Smialowski/Reuters Buy Photo Wait 1 second to continue.
“We don’t have a common vision of the situation,” Russian Foreign Minister Sergei Lavrov said after the crisis talks.
No agreements were reached, Lavrov told reporters. He stressed that Russia insists on Crimea’s right to hold the referendum. He said Russia would decide after the vote on how to respond.
When pressed about whether Russia would annex Crimea after the vote, he said, “There are no what-ifs in politics.”
Voters in Crimea will decide whether to secede from Ukraine and join Russia or remain part of Ukraine with greater autonomy.
The vote will be held under the eyes of Russian troops who effectively took control of Crimea late last month after protesters overthrew the Ukrainian government. The Crimean regional parliament has already voted to leave Ukraine, and the traditionally pro-Russian population of Crimea is expected to approve the idea as well.
[READ: Lavrov is the Russian foreign minister the U.S. loves to hate]
Moscow’s tightening grip on Crimea and the gathering of Russian troops along the two countries’ border have unnerved Ukrainians and left the country’s fledgling government concerned about further Russian military action. Kerry said the United States was “deeply concerned” about those deployments.
The United States and other nations have been dangling a diplomatic solution for Russia, tacitly acknowledging that the referendum would produce a pro-Russia outcome while suggesting that Russia could avert further escalation by leaving Crimea’s precise status vague.
But Kerry said Lavrov had made it clear that Russian President Vladimir Putin was not prepared to take that step. Lavrov said Russia will “respect” the results of the plebiscite, and it was clear from Kerry’s tone that the United States fears full annexation.
“We did not find common ground today on the way ahead,” said a senior U.S. official who spoke on the condition of anonymity to describe the roughly six hours of intensive discussions Friday.
In Washington, President Obama stressed the continued need for “a strong message to Russia that it should not violate the integrity and sovereignty of its neighbor.”
The European Union is expected to impose travel bans and asset freezes Monday on Russians accused of complicity in Moscow’s military incursion and the intimidation of Crimea. The E.U. on Friday identified more than 120 individuals as potential sanctions targets.
The White House announced Friday that Vice President Biden will travel to Poland and Lithuania next week to discuss Ukraine and other issues with regional leaders.
[Russia supporters in eastern Ukraine pose challenges to government]
In London, Lavrov insisted that Russia had no plans to invade Russian-speaking eastern Ukraine. But he echoed a statement issued in Moscow by the Foreign Ministry warning that Russia “reserves the right to take people under our protection.’’ Thursday night clashes between pro- and anti-Russian demonstrators in the Ukrainian city of Donetsk led to the death of one protester.
That protester was identified as Dmytro Chernyavskiy, the press secretary of the regional branch of a pro-Ukrainian ultranationalist party. Donetsk regional governor Sergei Taruta said in Kiev on Friday that the fighting was provoked by “non-Ukrainian citizens” and pro-Russian activists.
On Saturday in Kiev, Ukraine’s Foreign Minister Andriy Deshchytsa called on Russia to “stop interferring” in eastern Ukraine, adding that authorities here could handle issues of law and order in the region “ourselves.” He described threatening statements from Russia’s Foreign Ministry as an attempt to “provoke” an escalation of the tense situation in the east.
Deshchytsa called for U.N. monitors to fan out across southern and eastern Ukraine to independently assess the situation on the ground.
He also reiterated Kiev’s position that Sunday’s referendum in Crimea would be “illegal” and would not be recognised by the international community. He emphasized the new government’s desire to avoid any military conflict, and referred to the current stand off as more of a “diplomatic war.” But he added he would travel to Brussels on Monday to meet with NATO’s secretary general to discuss “military and technical cooperation.”
He said the U.N. security council was scheduled to discuss a motion on Ukraine later Saturday, but acknowledged a likely Russian veto.
Russia’s Interfax news agency reported Friday that a newly announced series of military exercises near Ukraine’s eastern border had expanded to include training missions for fighter jets and helicopters. Ukrainian military officials reported the seizure of another base in Crimea, a radar facility taken by Russian soldiers at about 3 a.m. Friday.
A Ukrainian defense ministry official said a column of about 50 armored vehicles from the Russian Federation were observed late Friday night moving from the city of Feodosia to Dzhankoi in northern Crimea. Vladislav Seleznyov said more Russian troops have moved in to occupy Ukrainian military bases that had been abandoned long before the crisis began.
In the Crimean capital of Simferopol, campaigning for Sunday’s referendum was in high gear Friday. Vans with megaphones blared Russian music in the streets around the regional parliament, where a large Russian flag already flies.
Vasilyev Maxim, an official from the Russian city of Kursk, said he drove to Crimea with thousands of Russian flags purchased with $10,000 of his own money to distribute ahead of the vote. “In 30 years, the history books will say Putin took back Crimea to rebuild our country,” he said. “And no one will remember Kerry or that Obama had anything to do with the situation.”
A new poll suggests the Crimean vote to join Russia will be overwhelming.
In a GFK poll of 600 residents taken Thursday and Friday, 70 percent said they will vote to become part of Russia, and just 11 percent said they will vote to restore Crimea’s status as part of Ukraine. If survey-takers were offered more options, they told posters, 19 percent would vote for independence. But a majority, 54 percent, would still favor becoming joining Russia.
It remains unclear how Moscow will consider Crimea’s status, said Sergei Markedonov, an associate professor of regional studies and foreign policy at the Russian State University for the Humanities.
Putin said at a recent news conference that Russia did not intend to annex Crimea, Markedonov pointed out, and the president has not made any public statements to the contrary since then. Crimea could emerge as a de facto state like Nagorno-Karabakh in the southern Caucasus, he said.
Lavrov said at his news conference that there were other precedents for Crimean secession besides the often-cited example of Kosovo. He referred to the Comoros Islands, which declared independence from France.
The talks at the sumptuous central London home of the U.S. ambassador were always a long shot to succeed.
Lavrov, a quick-witted diplomat who is often jocular when meeting with Kerry, was grim-faced as he entered the meeting. Although he speaks flawless English, he stuck to Russian at his news conference and spoke through an interpreter as he referred to the “difficult situation we are in.”
The mood may have lightened somewhat as the session continued into the afternoon, far longer than planned. Lavrov’s spokeswoman tweeted a picture of the two men kicking a soccer ball in their dress shoes as they strolled the park-like grounds of the ambassador’s residence.
Lally reported from Moscow. Karla Adam in London and Carol Morello and Pamela Constable in Simferopol contributed to this report. | John Kerry and his Russian counterpart have wrapped up a last-minute bid to try to defuse tensions ahead of this weekend's big vote in Crimea, and the results are ... not good. In the quote getting picked up everywhere, Russian Foreign Minister Sergei Lavrov declared afterward that "we don’t have a common vision of the situation,” reports the Washington Post. Russia refused Kerry's request to cancel Sunday's referendum, in which Crimea is expected to vote in favor of leaving Ukraine and joining Russia. Kerry, meanwhile, reiterated that the international community doesn't consider the referendum valid and warned anew of "consequences" should Russia move to annex the territory and of "an even greater response" if Russian troops—now massed at the border—invaded Ukraine. When asked whether Vladimir Putin would indeed annex Crimea after the vote, Lavrov said it was pointless to speculate before any voting took place. But he added that Russia "will respect the will of people of Crimea that will be expressed at the referendum." On the bright side, he said Russia had no plans to invade Ukraine. After the press conferences, the Guardian summed up that the "Ukraine crisis has entered a new and more dangerous phase." A CNN poll, meanwhile, finds that for the first time in more than a decade, most Americans (69%) see Russia as a threat to the US. |
By some estimates there are approximately 1.2 billion Muslims in the world, of which 60% live in Asia. Only 15% of Muslims are Arab, while almost one third live in South Asia. The four nations with the largest Muslim populations, Indonesia (194 million), India (150 million), Pakistan (145 million), and Bangladesh (130 million), are in Asia. China also has a population of 39 million Muslims. Despite this, the Muslims of Asia are perceived to be on the periphery of the Islamic core based in the Arab Middle East. Muslims are a majority in Kirgizstan, Uzbekistan, Tadjikistan and Turkmenistan in Central Asia, Afghanistan, Pakistan, and Bangladesh in South Asia and Malaysia, Brunei, and Indonesia in Southeast Asia. (See map below) There are also significant minority populations in Khazakstan, India, Thailand, and the Philippines. Sizable Muslim communities are also found in Sri Lanka, China, Burma, and Singapore. Islam is by some estimates the world's fastest growing religion. Mecca, in Saudi Arabia, is the spiritual center of Islam because Mohammad founded the religion there in 610. In 2002, Muslims constituted approximately 19% of the world's population as compared to 30% that were Christian. These percentages are projected by some to shift to 25% Christian and 30% Muslim by the year 2025. Islam in Southeast Asia is relatively more moderate in character than in much of the Middle East. This moderation stems in part from the way Islam evolved in Southeast Asia. Islam came to Southeast Asia with traders rather than through military conquest as it did in much of South Asia and the Arab Middle East. Islam also was overlaid on animist, Hindu, and Buddhist traditions in Indonesia, which are said to give it a more syncretic aspect. Islam spread throughout much of Southeast Asia by the end of the seventeenth century. Islam in Asia is more politically diverse than in the Middle East. Islam has been undergoing a revival in Asia. RAND analyst Angel Rabasa points to several factors that contribute to this Islamic resurgence in Asia. These include both domestic and external factors. Internally, the forces of globalization and the impact of Western culture have played a role, especially the effect of rapid industrialization and resulting urbanization. The Asian financial crisis of 1997 resulted in the overthrow of the authoritarian Suharto regime and created political space for Islamists in Indonesia. Muslim separatist insurgents have continued their struggle in the Philippines and Thailand while the Parti Islam se Malaysia has worked through the political system to promote an Islamist agenda while in opposition in Malaysia. External factors include the current situation in Iraq and Afghanistan, the Arab-Israeli conflict, the 1979 Islamic revolution in Iran, the export of Saudi-backed Wahhabi Islamic fundamentalism, the conflict between India and Pakistan over Kashmir, and the Afghan war against the Soviets. The majority of Muslims are of the Sunni tradition, while 10-15% are Shiite. This difference stems from disagreement over the succession to the prophet Mohammad. In South and Southeast Asia, Shiites are a significant portion of the population in only Afghanistan and Pakistan. The puritanical Sunni sect of Wahhabism has played an important role in the resurgence of Islam in Asia. It stems from a 18 th Century movement founded by Muhammad ibn Abd al-Wahhab that preached a literal interpretation of the Quran and an orthodox practice of Islam. Historically there has been a close relationship between Wahhabism and the Saudi dynasty. Sufism is another more "mystical" variant of Islam, though its presence in Asia is small except for parts of South Asia. The decline of Islamic power in the wake of European colonial expansion provoked two key schools of thought within Islam that continue to have relevance today. The traditionalist school believed that the cause for the decline of Islam could be traced to "moral laxity and departure from the true path of Islam." As a result, their response was to call for an Islamic revival. Others, known as reformers, felt that the decline was due to "a chronic failure to modernize their societies and institutions." The path of the reformers presents the question of whether it is possible to modernize without Westernizing. At its core this is a struggle over values: "... how to protect a society's cultural heritage and traditional practices in an age of globalization and how to develop a creative coexistence between modernization and traditionalism without Westernization." It is thought by some analysts that if the United States and the West seek to make common cause with moderate elements within the Islamic world against violent extremists they would be well advised to do so in a way that is not perceived to be a threat to the Islamic world. The United States, through its association with globalization and a globalizing culture, is perceived as a threat by many leaders of the Islamic world who are seeking to preserve, or restore, traditional culture even as segments of the populations they lead are drawn to American culture. The disconnect between Muslim elites and their people in Asia can also be seen in the decreasing popularity of United States's foreign policy even as regional leaders seek to maintain close ties. Some analysts believe that as long as the Muslim world views the U.S.-led war against terror as a war against Islam there will be significant limits on the extent to which Muslim states will be able to cooperate with the United States in the war against terror. The problem is exacerbated by widespread Muslim opposition to United States policy on the Arab-Israeli conflict. The Islamic revival is changing the face of political Islam in Asia. The distinction to be drawn is between revivalists, who see religious change as an end in itself, and political Islam, or Islamists, who seek the Islamic revival as a means to the end of transforming the state. A further distinction is to be drawn between those who would work through the political process and those who would use violence to achieve their ends. The Islamic revival has a complex relationship to the level of extremism in Asia. While Islam in Southeast Asia has been moderate in character, it is undergoing a process of revivalist change in some segments of society. The resurgence is in part inspired by links to the Middle East, Afghanistan, and Pakistan. Some Southeast Asians returning from Islamic religious schools in the Middle East and Pakistan have returned with a new, radical, militant, Islamist, and extremist form of Islam that is more likely to be anti-American or anti-Western in character. There is also a significant number of violent extremists of returned Southeast Asians, and a larger number of South Asians, who had participated in the war against the Soviet Union in Afghanistan. Some of the South and Southeast Asians who have been radicalized through these experiences have gone on to spread extremist ideology, particularly by linking with local Muslim extremist groups who tend to have more nationally or regionally defined goals and who are largely opposed to local moderate Muslims. From one perspective "the most effective policies towards Muslim Asia will be those that contain extremism while working with, rather than against, the Muslim majority's aspirations for social and economic improvement." Connections between Islamic extremism and terrorist organizations in South Asia appear to be more extensive than they are in Southeast Asia. This stems in large part from closer interaction with the Middle East, strengthened recently by the presence of Al Qaeda in Afghanistan and Pakistan. It is also a function of long term conflict in Afghanistan and in Kashmir. The extremist Taliban regime gave sanctuary to Al Qaeda until it was crushed. Since that time remnant Al Qaeda forces have linked up with other Sunni extremist groups in South Asia including Lashkar-e-Taiba, Jaish-e-Mohammad, Sipah-e-Sahaba Pakistan and Lashkar-i-Jhangvi. Pakistan has also experienced Sunni-Shiite conflict. An extensive array of Islamic schools known as madrassas , including some that teach a militant anti-Western and anti-Hindu perspective, operate in Pakistan. A coalition of Islamist political parties controls approximately 20% of the seats in Pakistan's legislature, as well as the Northwest Frontier Province. They also lead a coalition in Baluchistan. It has been reported that Al Qaeda fighters escaped to Bangladesh after the fall of Afghanistan to American and Afghan Northern Alliance forces and that Bangladesh veterans of the conflict in Afghanistan have played a role in establishing radical madrassas in Bangladesh. In India, while there exists significant inter-communal strife between Hindus and Muslims it is largely domestically focused with the exception of Pakistani based groups operating in Kashmir. There are a number of Islamist groups in Southeast Asia that have linkages, either direct or indirect, to terrorist organizations. The Moro Islamic Liberation Front (MILF), and Abu Sayyaf are examples of groups in the Philippines where Islamist ideology, secessionism, criminality, and linkages to international terrorist networks are evident. The terrorist Jemaah Islamiya (JI) organization, which seeks to establish an Islamic Khalifate across much of Southeast Asia and establish Islamic law, has ties to Al Qaeda. In Indonesia, the now reportedly disbanded Lashkar Jihad incited inter-communal strife between Muslims and Christians in Sulawezi and the Moluccas that created a struggle that can be exploited by terrorist groups such as JI. Lashkar Jundullah is another group that has been involved in inter-communal violence in the Moluccas and Sulawezi. The extremist Kampulan Mujahidin Malaysia (KMM) is an example of an organization in Southeast Asia established by veterans of the fight against the Soviets in Afghanistan. In Thailand, separatists have mounted an insurrection in the Muslim southern provinces. The relatively few Muslims of Northeast Asia are found in China for the most part. China is home to an estimated 17.5 to 36 million Muslims. The largest, most concentrated group is the Uighurs of Xinjiang Province in western China. The Uighur minority has experienced unrest of an Islamic character in recent years. Many Uighurs seek autonomy within China. Demographic trends arising from Han-Chinese in-migration are projected to make the Uighurs a minority in their home province. The scope of the Islamic revival in Asia, and the extent to which increased religious fervor will translate into extremist positions or political power that will express itself in violent ways towards the West, is debated. Some see this phenomenon manifesting itself more in terms of increased piety among individuals within society without necessarily expressing itself politically. Karen Armstrong, author of Islam: A Short History , believes that because fear feeds extremism the war against terror should include a better appreciation of Islam in the West. It has been observed that U.S. counter-terrorism policy "tends to conflate political Islam and terrorism worldwide." A key distinction for some in this debate is the distinction between cultural or religious identity and political identity. An Islamic revival that finds its expression through cultural or religious means is not necessarily a threat, even as some in the Islamic world would manipulate it to their anti-American or anti-Western ends. An examination of recent developments with political Islam in Malaysia and Indonesia illustrate this point. Radical Islamist or extremist parties have not demonstrated broad appeal among Indonesian or Malaysian voters in recent elections even as some segments of these societies have experienced a resurgence of Islamic belief. The Islamist Parti Islam se Malaysia experienced significant electoral setbacks in the 2004 elections to the relatively more secular Barisan National Coalition of Prime Minister Badawi, who is himself regarded as a respected Islamic scholar. In Indonesia, Islamist parties, such as the Prosperous Justice Party (PKS), made small gains based not on their Islamist agenda but on their anti-corruption and good governance policies. Secular and nationalist parties clearly are preferred by voters in Indonesia and Malaysia even as Islam remains a core value of the people. There are also fundamentalists in Southeast Asia that would introduce strict Islamic law but would not advocate the use of violence to do so. There is also a distinction to be made between those who would focus primarily on sub-national, national and regional objectives, such as secession for a Muslim province, rather than focus on the international agenda advocated by Al Qaeda. Alienation and humiliation appear to be key concepts for understanding the Islamic resurgence in Asia and for understanding why individuals are drawn to terrorist groups. In discussing madrassas and pesantren in Indonesia, from which extremists have been recruited, Zachary Abuza has taken the position that the "radical fringe (of Islam) will continue to grow, as modernization leaves people more isolated and the political process leaves people more disenfranchised. The Islamists and their supporters will continue to gain in power unless the more secular Muslim community again provides a successful model of tolerant and modernist Islam that it has done fairly successfully for forty years." In this way, some analysts believe frustration from diminished expectations driven by economic malaise, the lack of effective political participation, and a sense of humiliation are at the core of why many Asian Muslims have become radicalized. It is thought by some that U.S. policies can help best by assisting moderate elements in Asia to "respond to mainstream Muslims' hopes for economic improvement and political participation ... education, balanced development, participatory governance, and civil peace" that will give hope to alienated individuals who might otherwise drift towards radicalism. Some observers feel that diminishing the ranks of alienated Asian Muslims will in turn restrict room for maneuver by extremists and terrorists by limiting active or passive support from the societies within which they operate. | There exists much diversity within the Islamic world. This is particularly evident in Asia. This diversity is to be found in the different ethnic backgrounds and in the different practices of Islam. The Muslim world of Asia has been experiencing an Islamic revival. This has had an effect on moderate as well as radical Muslims. An understanding of the dynamics of Islam in Asia should help inform United States' policy to develop respect between America and Muslim peoples, to foster economic policies to encourage development of open societies, to support education in Muslim states, and to identify and prioritize terrorist sanctuaries in order to pursue more effectively the war against terror. This report will be updated. |
After denouncing a lewd photograph sent through his Twitter account as the work of a hacker, Democratic congressman Anthony Weiner now says he "maybe" was the source of the bulging underpants.
With Washington entranced by the mysterious case of "Weiner's weiner", quickly dubbed "Weinergate", the talkative New York City politician attempted to zip up the underwear affair. But a series of ill-tempered and evasive interviews left Weiner in an even more uncomfortable position.
While Weiner maintains that the photograph was sent through his Twitter and Yfrog photo-sharing account to a young woman by unknown hackers, he stopped short of denying his involvement as the subject or creator of the crotch-shot.
Asked if the photograph was of him, in an interview with NBC News, Weiner merely replied: "You know, I can't say with certitude." Pressed for a denial, in the course of a rambling answer Weiner said:
I will say that we're trying to figure out exactly what happened here. Whether a photograph was manipulated that was found in my account, whether something was dropped into my account, whether a photograph was partially my account, you know.
Weiner previously had a verbal tussle with CNN when it asked a similar question, eventually calling one CNN journalist a "jackass" on camera.
Later, talking to the New York Times, Weiner suggested "there were elements of this photograph that might have been doctored," while in a later appearance on MSNBC's Rachel Maddow Show the congressman admitted: "Maybe it started out being a photograph of mine," claiming that "stuff gets manipulated".
The women sent the distasteful image – a 21-year-old student who had followed Weiner on Twitter – has denied any knowledge or other connection to Weiner.
Weiner, one of New York's most high profile politicians and a possible contender for the city's mayoralty, is married to an aide to secretary of state Hillary Clinton.
The Brooklyn and Queens representative says he has hired lawyers and private investigators to look at possible legal action but as yet has not contacted police.
The affair of the well-filled underwear – first reported by the conservative news site Big Government – has been fodder for grateful comedians. Jon Stewart – a friend and former housemate of Weiner's – told his Daily Show audience:
Seriously. No way! No way! In real life my memory is this cat had a lot more Anthony and a lot less Weiner. This is not what I remember.
At this rate the scandal is becoming more than just a bad joke for Weiner. As NBC's Luke Russert told Weiner after one lengthy non-answer: "But Congressman, you would remember if you were to take a photograph of yourself like that." ||||| by Chad Pergram | June 01, 2011
After a lengthy vote sequence finished on the House floor, but before Rep. Anthony Weiner, D-N.Y., walked back to the Rayburn office building for an interview with Fox News' Bret Baier, the congressman took a few moments to chat up the media in the Speaker's Lobby off the House floor.
What followed was a testy and contentious exchange as a horde of at least 40 reporters pushed to get close to him. But the tete-a-tete was simultaneously filled with an onslaught of double entendres offered up by Weiner which had the press guffawing and in stitches.
"It was a big mistake I made yesterday when I said I was bound and determined not to let this become a story for four more days," Weiner said. "I'm sorry I was a little stiff yesterday."
Weiner said he was not yet ready to refer this incident to the U.S. Capitol Police.
"I've retained a firm that is going to give us opinions," Weiner added, defending his reasoning for not asking for the USCP investigation. "We don't know where the photograph came from."
Weiner also noted that "the jokes just kind of write themselves at this point" as he continued to lace his comments with innuendo.
"We know for sure I didn't send this photograph," Weiner said. "I was Tweeting at the time. I was Tweeting about a hockey game at the time."
Weiner also suggested that his surname, which is often lampooned by comedians, may be one of the reasons he may have been targeted.
"A congressman named Weiner, who has a rather edgy, aggressive Twitter feed was poking at Justice Clarence Thomas," Weiner said. "Maybe if my name was hamburger the picture would have been of something else."
Weiner even injected the War on Terror into his colloquy with reporters.
"Maybe this is the tip of Al Qaeda's sword," Weiner said in reference to lewd picture of his privates in boxers that was sent on his Twitter feed.
Weiner noted that he has 45,000 Twitter followers.
"That's more than (Rep.) Michele Bachmann. I finally passed her," said Weiner of the potential Republican presidential candidate. ||||| Sometimes I wonder if Rep. Anthony Weiner, D-N.Y., is too nice for his own good.
An evil swine hacks into Weiner's Twitter account and posts an embarrassing photo of spindly legs topped by a small erect penis draped in dingy gray briefs no male over the age of 11 would wear -- and Anthony just wants to forget the whole thing!
Instead of angrily demanding an investigation like anyone else would, Anthony has gone all St. Francis of Assisi on us.
He doesn't want an investigation! How big-hearted is that? Talk about a forgiving nature! He's almost too magnanimous. I wish I had that kind of forbearance.
Maybe he's ready to live and let live, but speaking as one of Anthony's biggest Twitter followers, I am not. Otherwise, Weiner's hacker is just going to go out and hack and hack again.
So while I admire Anthony's selfless refusal to be "distracted" by this issue, I would urge him to reconsider.
Only a full and complete investigation will show that he had absolutely nothing to do with that humiliating photo of the tiny stub of a male organ sent to a 21-year-old coed from his Twitter address last Friday night.
Anthony needs to remember that hacking is a serious crime. In fact, there probably will have to be a federal investigation whether or not our gentle Anthony requests one.
Another example of Anthony's amazing forbearance is how he has not retaliated against CNN for its malicious editing of Weiner's press conference on Tuesday.
CNN obviously sabotaged the tape to make it look as if he was refusing to answer the simplest, most direct questions. (I confess I did not see the entire conference live; I was too busy sending private messages to the hundreds of college coeds I follow on Twitter, just like Anthony.)
Through sheer trickery, CNN made it appear as if Anthony kept lurching back to the same irrelevant story about a heckler in an audience of 45,000 people.
Anyone could see there was something off about the video because no matter what reporters asked him, CNN kept looping back to that clip of Anthony telling his long, pointless parable about a heckler in an audience and how he'd respond and then demanding that he be allowed to finish, when he obviously had already finished.
This falsely suggested that he was stonewalling reporters. Perhaps the CNN tape was hacked, too.
It's time for Anthony to stand up for himself, if you'll pardon the expres -- Hey, wait a minute! Now my column is being hacked!!! -- and demand an investigation of both the hacker and CNN.
You don't need to apologize for anything, congressman. Your only problem is, you're just too damn nice.
But knowing Anthony, he'll probably forgive CNN. There's a reason why, year in and year out, Anthony Weiner has been voted Congress' most forgiving person.
I try to be a good Christian, but it took Anthony Weiner to show me what true mercy is. I salute you, congressman! ...
The preceding several paragraphs are what we call "irony," i.e. saying one thing while meaning the opposite.
What I meant to say is: OF COURSE ANTHONY WEINER DOESN'T WANT AN INVESTIGATION BECAUSE IT WOULD SHOW THAT HE HIMSELF POSTED THE PHOTO OF HIS SMALL ERECT PENIS.
The reason the congressman is so eager to forgive the hacker is that there is no hacker. He cannot have an investigation for the simple reason that it will show that he posted the photograph himself.
In a panic when he saw he had hit the wrong button and sent a private tweet of his pecker to his entire Twitter following, Weiner blurted out the hacker defense, quickly typing: "FB hacked. Is my blender gonna attack me next?"
Unfortunately, there was no lawyer in the room to tell him: "Don't say that! They'll have to investigate!"
On Sunday, his staff followed up with a press release, saying: "Anthony's accounts were obviously hacked."
So he can't now claim he didn't say it.
After hiring a lawyer, Weiner quickly backpedaled from the "hacker" claim and began insisting, in another press release: "This was a prank. We are loath to treat it as more."
If it was a prank, then why did he hire a lawyer?
Weiner isn't a celebrity: He's a CONGRESSMAN. Whoever can hack into his Twitter account may be able to hack into other congressmen's accounts -- or into Weiner's briefing files from, say, the Department of Defense.
(Indeed, unless the alleged hacker is arrested, who knows how many Anthony Weiner penis shots could start circulating on Twitter?)
But when one of Weiner's colleagues, Rep. Cliff Stearns, R-Fla., requested a congressional investigation into cybersecurity based on Weiner's self-proclaimed computer attack on his Twitter account, Weiner denounced and insulted Stearns.
The best Weiner can do now is try to take his utterly humiliating penis photo out of the realm of criminal law by eliding "hacked" into "pranked." Legally, it's not clear what the difference is.
He's stuck angrily announcing that he wants to move on, there's important work to be done, and calling a CNN reporter a "jackass" merely for asking if Weiner sent the penis photo or not.
For a guy who's suddenly taking the position that this was all just a harmless prank, he seemed pretty bent out of shape at that CNN press conference. If that condition persists for more than four hours, congressman, consult your doctor. ||||| (CNN) -- A liberal Democratic congressman who came under fire for a lewd photo that briefly appeared on his Twitter account over the weekend told CNN Wednesday that he did not post the image.
Democratic Rep. Anthony Weiner spoke to CNN's Wolf Blitzer a day after a contentious exchange with reporters in which he refused to directly answer any questions about the picture.
On Wednesday he said he had hired a law firm to look into the matter. But he declined to directly answer whether he appeared in the photo.
"Photos can be manipulated. Photos can be of one thing and changed to something else. We're going to try to get to the bottom of what happened," he said. The photo showed the lower body of a man wearing underwear.
A conservative blogger who broke the story has called for a full investigation of what he said was either the hacking of a congressman's account or something Weiner wants to hide.
But Weiner told CNN he did not think such steps are necessary to deal with what he said was internet spam, an issue that many Americans face.
"Just because it happened to Congressman Weiner on his personal account doesn't mean that the taxpayers should pay for an investigation," he said. "I'm going to turn it over to some people who are going to give me advice on what to do next.
"This seems like it was a prank to make fun of my name, the name Weiner. It happens a lot," he added.
Asked whether he was protecting anyone, Weiner replied, "Yes, I'm protecting my wife, who every day is waking up to these insane stories that are getting so far from reality. You know, we've been married less than a year."
He also declined to say what he had written in direct messages to Twitter followers.
"I'm not going to get into how I communicate with people on social media. There was nothing ... inappropriate," he said.
An e-mail that Twitter sent to members of Congress Wednesday lists several online security tips, according to a copy of the e-mail CNN obtained. The message does not specifically mention the photo posted on Weiner's page, but notes that questions about account security have surged recently.
"Some of you inquired today about the security of Twitter accounts," Twitter's Adam Sharp wrote. "While we won't comment on individual accounts, news reports of the past few days are a good reminder of the importance of actively protecting your account credentials."
Weiner on Tuesday told reporters he wasn't interested in talking about the issue any more, saying he already made statements over the Memorial Day weekend after the photo turned up on his Twitter account Friday night.
In a heated exchange with reporters, he repeatedly dodged direct questions about the photo.
"If I were giving a speech to 45,000 people, and someone in the back threw a pie or yelled out an insult, I would not spend the next two hours of my speech responding to that pie or that insult. I would return to the things that I want to talk about," Weiner said in response to a question about whether he sent the lewd photo to a Seattle woman.
He also refused to say why he hasn't asked law enforcement to investigate if in fact his account was hacked, as he has said it was.
Despite repeated efforts by reporters, Weiner did not directly answer questions about the photo.
In earlier comments, when asked if the photo was of him, Weiner deflected the question.
"I'm not going to talk about this anymore," he said, adding: "I'm going to get back to the conversation I care about," including economic issues and what he calls a conflict-of-interest situation involving conservative Supreme Court Justice Clarence Thomas on the health care reform law. The New York Democrat is a leading liberal voice in Congress.
Asked several questions about the Twitter situation Tuesday, Weiner stuck to his message.
"I understand you're doing your job, but I'm going to go back to work now," Weiner said at one point. When asked if he was concerned about being hacked, he responded: "I'm going to return to working on the things I care about. I participated in the story a couple of days now, given comments on it. This is a distraction and I'm not going to let it distract me."
When a reporter noted the distraction might go away if he answered the questions, Weiner answered: "I'm not convinced of that.
"I'm not convinced there's any value of me talking about it," Weiner said.
Asked again if he was the man in the photo, Weiner responded again that he had made previous statements and now it was time for him to get back to work.
On Wednesday, Weiner told CNN that he regretted "the way that I handled it yesterday and I'm trying to do a better job today."
Previously, Weiner blamed the photo on a hacker who got control of his social-networking accounts and played a prank. Weiner's spokesman, Dave Arnold, said Monday the congressman has retained an attorney to look into the situation.
No formal criminal investigation has been launched, which rankles Andrew Breitbart, whose conservative website biggovernment.com first reported the photo on Weiner's Twitter account in connection with a tweet to a Seattle woman.
Breitbart, who has been involved in questionable tactics against Democrats and liberals in the past, told CNN on Tuesday that the case warrants further investigation.
"There's something fundamentally different between a prank and a hack -- a prank is innocuous, a hack is criminal," Breitbart said, later adding he wanted a full investigation by the FBI and Capitol Police.
However, CNN legal analyst Jeffrey Toobin said Tuesday he believed the situation was a harmless prank unworthy of further investigation.
"Twitter is not a very secure environment," Toobin said, noting that information on the site can be unreliable "and doesn't even come from the people it appears to come from."
He added: "There's a famous expression -- don't make a federal case out of it."
CNN's Kate Bolduan, Dana Bash and Rachel Streitfeld contributed to this story. ||||| Rep. Anthony Weiner says his Twitter account was "hacked" and that he didn't send that picture of his bulging penis to that college student.
Is that true? Or is Anthony Weiner lying?
Odds are he's lying.
How do we know?
Because here's what Weiner says about that picture: He "can't say with certitude" that the picture is not of him.
As John Podhoretz of the New York Post observes, that is just a political way of saying that the picture is of him.
There is only one way to shoot a picture like that (see below): Take your pants off, hold a camera at shoulder level, and aim it down. Because of this, Weiner has to know if a picture like that was ever taken of him--and when and by whom (odds are, by him).
If such a picture was NOT taken, or if Weiner does not own underwear like the ones in the picture, Weiner would be able to say with almost 100% certainty that the picture was NOT of him.
He didn't say that.
He said he can't be sure the picture isn't of him.
And that means it is almost certainly of him.
To "hack" Weiner's Twitter account and post the picture, therefore, someone would have to break into his computer or phone or wherever the picture is stored, gain access to his Twitter account, and upload the picture--all without alerting him to the fact that his phone/computer and Twitter account had been hijacked.
Having your Twitter account and computer hacked and having lewd, fabricated pictures of yourself sent to a college student is serious business if you're a politician. It's potentially career-destroying. It is also unequivocally a crime (not a "prank," as Weiner and his people have said).
If Weiner's account had been hacked in such a fashion, he would likely have instantly freaked out and called the authorities. Upon being questioned about the incident, he also would have immediately issued a full, categorical denial.
Weiner didn't do any of that. Instead, he made a joke on Twitter about how his "FB account" had been hacked. Then, for three days, he blew up at reporters for daring to ask him questions about the affair.
Is it possible that Weiner is telling the truth?
Anything's possible.
But the far more likely explanation is that he tried to send the college student a Direct Message with the picture of his crotch, accidentally blasted it out to his whole Twitter list, and then tried to cover up his mistake with a b.s. story about how he had been "hacked" (which was presumably the first thing that popped into his head after he realized with horror what he had done and deleted the tweet).
It would hardly be the first time someone has screwed up with an "accidental DM." And it also would hardly be the first time a married politician has followed his penis into trouble and then lied about it.
(And, by the way, there's an obvious explanation for why Weiner and his people have called their lawyers, instead of the police: Because they know the police will instantly be able to determine who sent the picture. We'd place a nice, big bet on the fact that they really don't want that to happen.) ||||| Hot dog, that wiener looks familiar!
Weasily New York Rep. Anthony Weiner exposed his kinky side yesterday — finally admitting the bulging crotch shot mysteriously sent from his Twitter account to a pretty young coed might actually be his own.
“You know, I can’t say with certitude,” he insisted when a skeptical-sounding MSNBC reporter asked, “That’s not a picture of you?”
“My system was hacked. Pictures can be manipulated, pictures can be dropped in and inserted,” Weiner said.
He later grudgingly admitted to The Post that snapshots of his nether regions could exist.
“There are photographs of me in the world, yes,” he said, when asked point-blank if he’d ever taken sexually charged snapshots.
The hot-headed Weiner spent yesterday desperately trying to shake off the scandal, which erupted over the Memorial Day weekend, by hitting seven cable news shows, where he gave defensive answers to reporters.
But the multinetwork tour turned into the biggest damage-control disaster since Charlie Sheen’s postmeltdown media blitz when the congressman relentlessly stuck to his script, acknowledging that the photo could be him but refusing to elaborate.
After giving his scripted answer on the photo to MSNBC’s Rachel Maddow last night, she asked if his talk-show tour did more harm than good.
“I’m not trying to be evasive, I just don’t know,” he claimed.
After days of ducking any questions about the controversy, the six-term married Queens-Brooklyn Democrat finally insisted he did not actually press the send button that launched the soft-core porn into cyberspace.
“I can definitively say that I did not send this,” he told Fox News Channel.
He said someone broke into his account and sent the eye- popping snapshot — showing an erect penis under snug gray boxer briefs — to 21-year-old Gennette Nicole Cordova, a junior-college student in Bellingham, Wash.
“When your name is Weiner, it goes with the territory,” he cracked in an interview with CNN.
Weiner turned prickly when The Post asked about his ever-changing descriptions of the incident — first calling it a hack, which is a federal crime, and then brushing it off as an innocent prank, not worthy of alerting authorities.
“Somehow, someone made use of my private account, so you can choose the term you like. I’ll leave it up to you. I know you don’t like big words,” he snarled as he bolted through the Capitol.
Asked earlier by MSNBC why he still hasn’t involved law enforcement, he said he didn’t want to use federal resources on the incident.
“I’m not sure I want to put national federal money to find out who posted a picture on Weiner’s Web site,” he said.
Unable to resist awkward double entendres, he said that the situation “didn’t rise” to a federal investigation and that maybe the alleged hacking was “the point of al Qaeda’s sword.”
Instead of informing law-enforcement authorities — especially the Capitol police, which investigates crimes against Congress members — Weiner hired a team of private investigators.
“We got a firm that is going to consult about which of the many authorities should be involved here,” Weiner told The Post, declining to identify the outfit.
“We’re not making a federal case over it. But we have retained a firm. We are going to be working with an Internet-security operation to find out, and will consult about what authorities, if any, should be brought in.”
Asked if he believes someone else had his password, he said it was possible.
“They’ll be looking into whether someone had my password,” he told CNN, referring to the investigative firm.
The embattled congressman also pledged to bone up on Internet-security procedures.
“We are taking it very seriously that it doesn’t happen again,” he added.
“Look, this is a prank. Someone sent a prank Twitter about my name. I’m kind of the victim of this,” he said.
Weiner was also grilled yesterday over the online company he keeps — specifically, a selective set of nubile young women he follows on Twitter.
A notorious ladies man prior to his 2010 marriage to Hillary Clinton aide Huma Abedin, Weiner has 49,000 followers on Twitter but follows only 198 himself — including the bevy of beauties.
Pressed on how he picks the women he follows on Twitter, Weiner said, “It’s random. Yesterday, some guy complained he didn’t get followed and I added him.”
At one point in his lively online life, he was even messaging Tennessee porn star Ginger Lee on the social-networking site.
“I follow him on Twitter because I support him,” she said yesterday.
Weiner’s tone yesterday was gentler than a day earlier, when he lashed out at reporters during an impromptu press conference, calling a CNN journalist “a jackass” during the heated cross-fire.
Federal law-enforcement sources told The Post that sending a lewd picture to a recipient online is not a crime.
Adults can send each other nude, sexual or suggestive pictures of themselves as much as they want as long as it doesn’t rise to the level of harassment, sources said.
Democratic operatives were stunned by Weiner’s inept handling of the scandal.
Chris Lehane, a veteran Democratic strategist, said he was surprised Weiner had not been more forthcoming sooner.
“You aren’t going to get by on a story of this nature without giving a comprehensive explanation,” Lehane said. “The only way you can put out a fire that has been ignited with bad information is to douse it with good information.”
With additional reporting by Jeane MacIntosh, Josh Margolin, Bruce Golding and
[email protected]
||||| It only took an extra day or three (possibly delayed by his very important Sarah Palin pizza meeting— what is with 2012 hopefuls and pizza?), but finally, Donald Trump has weighed in on the scandalous mystery of how an indecent photo appeared on the Twitter account of Rep. Anthony Weiner Friday night. Decreeing that Rep. Weiner’s reaction makes it clear “he obviously knows [the picture] is him,” he concluded that the Congressman’s handling of the situation was either “lying or incompetent.”
Trump appeared with Piers Morgan to discuss the matter, the first time he was on the program since his debate on Piers Morgan Tonight with… Rep. Anthony Weiner. Trump made no mystery of how he felt about the Congressman, calling him “almost unstable” and being “surprised” by his behavior that night. Then turning to the matter at hand, Trump called it a “horrible situation” and argued that “it was him because otherwise he would’ve said ‘it wasn’t me.'” He then repeatedly stated that the picture was “pretty bad… let’s not kid ourselves” and “in a rather terrible position.”
Morgan returned Trump’s assertions by asking him if he would be able to “100% recognize yourself in a similar image,” to which Trump replied that he would at least know whether he owned that clothing. Despite the jokes, however, Trump conclude that “I don’t think it’s just a joke” and would like to see more of an investigation.”
The segment via CNN below:
Have a tip we should know? [email protected] | As Day 6 of Weiner-gate begins, no one seems able to stop talking about the is-it-or-isn't-it crotch shot—including Anthony Weiner. After telling Luke Russert he was lacking "certitude" about whether it was, in fact, him in the photo, he kept talking. And he doesn't seem to be doing himself many favors in the pun department. When responding to a horde of reporters after leaving the House floor yesterday, he apologized "for being a little stiff yesterday." Clearly on a roll, he kept going: "Maybe if my name was hamburger the picture would have been of something else." And why not toss in a War on Terror reference? "Maybe this is the tip of al-Qaeda's sword." Then he talked to Bret Baier. And Rachel Maddow. And Wolf Blitzer. In the latter interview, he explained, "This seems like it was a prank to make fun of my name, the name Weiner. It happens a lot." Prank? Yeah, right, says Donald Trump ("let's not kid ourselves ... it was him") and Henry Blodget ("OF COURSE Anthony Weiner sent that picture"). Feeling confused? Maybe a smattering of the day's best-headlined articles will clarify things: Ann Coulter: "Weiner's Penis Photo Dispute To Be Settled In Small Claims Court" New York Post: "Really 'Hard' to Tell" Guardian: "Weinergate limps on as congressman adds new wrinkle" |
After an epic debate, Colorado Democrats advanced stricter gun-control measures Friday, ensuring that the state will be held up as an example in a national fight over tougher firearm laws.
Republicans argued that the bills would drive jobs out of the state and violate the Second Amendment, but they couldn't get enough Democrats in the state House to flip to their side.
A year ago, Republicans held a 33-32 majority in the House, but after the November election Democrats are back in charge, 37-28, with a margin that allows them to lose a member or two or three and still prevail.
Democrats gave initial approval to all four bills Friday, but the official vote won't happen until Monday.
The next step would be the Senate, where Democrats hold a 20-15 majority, and then it's on to Democratic Gov. John Hickenlooper, who said Thursday he backs three of the bills and is still reviewing the fourth, which would prevent concealed-carry permit holders from packing heat in campus buildings.
"We proposed reasonable gun-safety and public-safety legislation, and we've had a vigorous debate over it," said House Speaker Mark Ferrandino, D-Denver. "I'm confident it will reduce the level of gun violence in communities across the state."
Republicans argued that the bills did nothing for gun safety.
Nearly eight hours into the debate, Vice President Joe Biden called four House Democrats to get their take on the debate and to note Colorado's importance in a national discussion on gun control.
Republicans, who have insisted for a week that Democrats are jamming the gun bills through the House, jumped on the news of Biden's call, saying Washington Democrats are behind Hickenlooper's support and an apparent change of heart among some Democratic lawmakers Friday.
"It obviously explains everything," said Minority Leader Mark Waller, R-Colorado Springs.
Ferrandino laughed at the suggestion. He pointed out that the gun bills had been scheduled to be introduced last week and debated in committee and on the floor this week before he got his call Friday afternoon from Biden.
"I was shocked that he called," Ferrandino said of Biden. "He said he thought the bills could help them on a national level."
Biden, who is in Colorado on a ski trip, echoed the same themes with at least three other Democratic lawmakers: Mike McLachlan of Durango, Tony Exum of Colorado Springs and Dominick Moreno of Commerce City.
"He said it would send a strong message to the rest of the country that a Western state had passed gun-control bills," Exum said.
The country is embroiled in a debate over gun control after mass murders inside a Colorado movie theater in July
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and a Connecticut elementary school in December.
McLachlan said the vice president told him he carried a gun bill in the U.S. Senate in 1980.
"He said it was a tough battle, and he still had the scars on his back and to hang in there," McLachlan said.
The House began debating the first of four bills, a measure that prohibits high-capacity magazines, at 9:30 a.m. Republicans were hoping to flip the necessary five Democrats to kill the bill but found only three: Reps. Ed Vigil of Fort Garland, Leroy Garcia of Pueblo and Steve Lebsock of Thornton.
Some Republicans thought they might draw the support of McLachlan and Diane Mitsch Bush of Steamboat Springs but were out of luck.
Though it took lawmakers more than five fours to debate that bill, Republicans weren't looking at their watches — but at the 2014 calendar.
They predict Democrats in swing districts who vote for the gun bills are going to be in big trouble back home.
"I think it's going to produce incredible results for us in 2014," said Rep. Amy Stephens, R-Monument.
Rep. Max Tyler, D-Lakewood, countered that every issue is fodder in his Jefferson County swing district.
"I have to stand up and do what I think is right," he said. "I'm not going to worry about what they're going to slice and dice and run against me. I have to vote for what I think is correct, what I think my district supports and what my conscience supports."
All four bills passed out of committee this week on party-line votes, after hundreds of gun-rights advocates asked that the measures be killed and the victims of gun violence asked that they be approved.
Republicans had accused Democrats on Thursday of cutting off their debate during an Appropriations Committee hearing on the bills. If the GOP thought it was going to get headlines on that charge Friday, it was wrong.
Ferrandino let Republicans — and Democrats — talk.
And talk.
And talk.
"It's not good for Colorado, and I urge that we do what's right and kill this bill," Waller said, stating that if the ammunition-magazine bill passed, businesses would leave Colorado and cost some 700 jobs.
"Limiting the number of bullets will save lives," countered Rep. Lois Court, D-Denver. "It's intuitive ... more bullets, more weapons, more killing. Less bullets, less weapons, less killing."
Another bill would ban concealed-weapon permit holders from carrying on campuses.
"Students and guns are a bad mix," said Rep. Claire Levy, D-Boulder.
But Rep. Chris Holbert, R-Parker, shook his head at that argument.
"This is not K-12. There's no kid who has a concealed-carry permit. There are adults," he said.
The debate was mostly civil although certainly heated and passionate.
But rookie lawmakers were stunned at the vitriolic e-mail and phone messages they have received over gun bills.
Rep. Joe Salazar, D-Thornton, read a profanity-laced note he received calling him a fascist and saying you will "(bleeping) die."
"I started thinking to myself, 'Boy, do I want that guy to go through a universal background check?' " Salazar said, getting a big laugh.
Lynn Bartels: 303-954-5327, [email protected] or twitter.com/lynn_bartels
House debates four gun bills
House Bill 1224, by Rep. Rhonda Fields, D-Aurora: Limits ammunition magazines to 15 rounds. Status: Received initial approval
House Bill 1229, by Fields and Rep. Beth McCann, D-Denver: Requires univeral background checks for gun sales or transfers. Status: Receive initial approval.
House Bill 1228, by Rep. Lois Court, D-Denver: Requires gun customers to pay the costs of their criminal background checks by the Bureau of Investigation. Status: Initially approved, but pulled back to fix a technical problem.
House Bill 1226, by Rep. Claire Levy, D-Boulder: Outlaws concealed-carry permit holders to pack heat in campus buildings. Status: Under debate.
Gun bills in the colorado house
House Bill 1224
Sponsor: Rep. Rhonda Fields, D-Aurora
What it would do: Limit ammunition magazines to 15 rounds
Status: Received initial approval
House Bill 1226
Sponsor: Rep. Claire Levy, D-Boulder
What it would do: Outlaw concealed-weapon permit holders to pack heat in college campus buildings
Status: Received initial approval
House Bill 1228
Sponsor: Rep. Lois Court, D-Denver
What it would do: Require gun customers to pay the costs of their criminal background checks by the Bureau of Investigation
Status: Received initial approval
House Bill 1229
Sponsor: Fields and Rep. Beth McCann, D-Denver
What it would do: Require universal background checks for gun sales or transfers
Status: Received initial approval ||||| Print Email Font Resize Font Resize Breaking News Colorado House approves all four gun-control measures
Rep. Lois Court hugs Rep. Rhonda Fields after the Colorado House voted in four bills that seek to enact universal gun background checks, fees for background checks, limits on magazine size and a ban on conceal carry permits on college campuses at the state Capitol Monday in Denver. (Joe Amon, The Denver Post) Checks of private Colorado gun sales much lower than first reported
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In recall message, Sen. John Morse avoids talk of gun-control votes A package of four Democratic gun-control bills cleared the Colorado House on Monday and is headed to the Democrat-led Senate, where the votes could be close. Senate committees could take them up as early as this week if they wanted. However, timing issues with other bills mean the gun bills could be delayed for weeks. "I know they're coming, and I strongly suspect they'll get passed," Senate President John Morse, D-Colorado Springs, said of the bills. "But there's still a long way to go and a lot of conversation to be had." The House on Monday gave final passage to the four bills, which: • Limit gun magazines to 15 rounds. • Require background checks for all gun transactions. HB13-1224 passes at the State Capitol on Feb. 18, 2013. (Joe Amon, The Denver Post) • Ban concealed weapons on college campuses. • Impose a fee for gun buyers to cover the cost of their background checks. Democrats hold a 37-28 majority in the House — where 33 votes are needed for passage — but only one of the bills, the universal background check, passed with a margin close to the Democrats' majority. In the Senate, the numbers are closer. Democrats hold a 20-15 advantage and need 18 votes for passage. Two Democrats historically known for their support of gun rights say they're uncommitted on the bills. "I've got to look at them carefully. I've always supported the Second Amendment," said Sen. Lois Tochtrop, D-Thornton. "The background checks I'm fine with, but the devil is in the details. How do you control private sales?" Tochtrop also said she was comfortable with the idea of people paying for their own background checks but wanted to make sure there were limits to how much the Colorado Bureau of Investigation could charge and that the fees weren't "open-ended." "The other two, I'm looking at very carefully," she said, adding, "I'm concerned about a business leaving the state of Colorado." Tochtrop was referring to Magpul Industries, an Erie-based maker of gun magazines that has threatened to leave the state if the bill limiting magazines to 15 rounds becomes law. Supporters of Rep. Edward Vigil, D-Fort Garland, stand as he explains why he planned to vote against his party and the four gun-control bills before the Colorado House on Monday at the state Capitol. (Joe Amon, The Denver Post) Sen. Cheri Jahn, D-Wheat Ridge, was having similar struggles. She said she's supportive generally of the fees for background checks and requiring checks for all gun purchases but is having bigger problems with the idea of limiting gun magazines. "I'm just not sure passing a law is going to do what people think it's going to do," she said. Asked about banning concealed weapons on campus, Jahn said, "That one I probably would support." The conflict that some House Democrats had Monday was best summed up by Rep. Ed Vigil, D-Fort Garland, who voted against all four gun bills and described how his family came to Colorado in the 1850s. "They carried weapons to settle this land. This is part of our heritage," he said. "I cannot turn my back on that." The Colorado House prepared to take up four gun bills at the state Capitol on Monday, Feb. 18, 2013, in Denver. (Joe Amon, The Denver Post ) With all House Republicans voting against stricter gun-control measures Monday, several cited the need to address mental health as a way of quelling gun violence. This is one area where there is bipartisanship on gun violence. State Rep. Beth McCann, D-Denver, said she hopes to unveil a measure that addresses the issue next week. "We need to provide more tools for mental-health professionals so that they can have more of an active role in identifying people who might not be able to handle a gun," McCann said. "So this bill will provide them with additional tools to do that." The bill directs mental-health professionals to notify the CBI if they conclude that a person poses a danger to themselves or others so the name can be placed in the background-check database, preventing them from purchasing a gun. Monday's discussion in the House, while far shorter than the 12-hour debate Friday, was distinguished by speeches that quoted "Hamlet," invoked images of Japanese internment camps and cited the example of Mahatma Gandhi — in this case in favor of gun rights. Democrats argued that guns and college students don't mix and that campuses are some of the safest places in America. "There are a lot of students who simply are not ready to be in the presence of firearms," said bill sponsor Rep. Claire Levy, D-Boulder. "It's a dangerous mix." But Republicans, especially female GOP lawmakers, said young women on college campuses would now be more at risk of sexual assault and other violent crimes. "A rapist entering a women's dorm will not be stopped by a whistle or a call box," said Rep. Lois Landgraf, R-Fountain. Republicans argued that a bill imposing fees on gun purchasers for background checks was essentially a tax. "This bill is taking advantage of a tragedy that's out there to demonize law-abiding citizens who are exercising their Second Amendment rights, and using it as a way to generate $4 million to $5 million in increased taxes on these people," said Rep. Brian DelGrosso, R-Loveland. But Rep. Dan Pabon, D-Denver, noted that the background fee on gun purchases was nothing new and had been enacted originally under a Republican-controlled legislature in 1994. The state ended the fee in 1999 because at that time, the fee had generated so much money, it was going to exceed revenue limits under the state's Taxpayer's Bill of Rights. Probably some of the angriest debate came around the bill to limit gun magazines to 15 rounds. McCann said high-capacity magazines had been used in numerous high-profile spree shootings, citing in particular the case of Jared Loughner, who used one to wound 13 people, including U.S. Rep. Gabrielle Giffords, and kill six others outside a Tucson grocery story in January 2011. "It was because he was reloading one of those high-capacity magazines that he was prevented from killing additional people," McCann said, saying Loughner was tackled by bystanders when he stopped to reload. But House Minority Leader Mark Waller, R-Colorado Springs, said it was "absolutely inconsistent" for Democrats to have added an amendment to the bill in an attempt to keep Erie -based gun-magazine manufacturer Magpul from leaving the state. The amendment says manufacturers could still make high-capacity magazines for out-of-state sale. "Apparently, they (high-capacity magazines) are not instruments of destruction when they're purchased outside the borders of Colorado," Waller said. Tim Hoover: 303-954-1626, [email protected] or twitter.com/timhoover Limit ammunition magazines to 15 rounds 34-31 PASSED with all Republicans and three Democrats voting against: Leroy Garcia of Pueblo, Steve Lebsock of Thornton, Ed Vigil of Fort Garland Universal background checks in sales/transfers 36-29 PASSED with all Republicans and one Democrat, Vigil, voting against Gun customers pay cost of background checks 33-32 PASSED with all Republicans and four Democrats voting against: Garcia, Vigil, Dave Young of Greeley and Diane Mitsch Bush of Steamboat Springs Concealed weapons banned on campuses 34-31 PASSED with all Republicans and three Democrats voting against: Garcia, Lebsock and Vigil What's next These four bills are headed to the Senate, where they will likely be assigned to committees this week. Democrats control the Senate 20-15, so Republicans will need to peel off three Democrats to kill a measure. | Colorado has taken the first step toward serious gun-control reform, with a package of four bills passing the state House yesterday, the Denver Post reports. The bills: Ban gun magazines with more than 15 rounds. Require all gun transactions to include a background check. Make gun buyers pay a fee to cover those background checks. Prohibit concealed weapons on college campuses. The state Senate is the next stop, but though it's controlled by Democrats, the votes may be close: Eighteen votes are needed for passage; the Democrats' majority is 20-15, and at least two Democrats are wavering. If they pass and are sent to Gov. John Hickenlooper, he has said he backs three of the four and is still reviewing the concealed-carry bill. |
Yesterday, we launched our retrospective on the best films of the 1990s, as determined via democratic acclaim among our film writers, with no debate or internecine squabbling permitted. (We saved that for the comments.) Here are the next 20, leading up to our top 10 on Wednesday and our personal favorites that didn’t make the master list on Thursday.
30. The Thin Red Line (1998)
Terrence Malick had almost faded into myth before he directed The Thin Red Line, his first film since Days Of Heaven in 1978. Adapting James Jones’ novel about World War II soldiers fighting in the Pacific, Malick gathered an all-star cast, then put both stars and story in service of a lyrical exploration of how the act of war stands in fundamental opposition of what it means to be alive on earth. It’s a film of breathtaking beauty and jarring violence, and a statement of faith, however guarded, that the former will ultimately triumph over the latter.
29. Irma Vep (1996)
Cinema is dead. Long live cinema! Olivier Assayas’ irreverent and unimpeachably cool broadside on the state of French cinema has the effect of lamenting the industry’s moribund state while demonstrating tremendous vitality on its own. It follows an aging, past-his-prime New Wave master (played by New Wave icon Jean-Pierre Léaud) as he attempts to remake the classic silent serial Les Vampires with Hong Kong star Maggie Cheung (excellent as herself) in the lead role. Assayas mercilessly contrasts the tortured haplessness of the French filmmaking model with the confident efficiency of Hong Kong, often by letting Cheung’s confused looks do much of the talking. But Irma Vep is ultimately an act of creation through destruction, ending in a stunning act of self-immolation that has the effect of a cleansing by fire. It also features Cheung prowling around a hotel in a latex catsuit to Sonic Youth’s “Tunic (Song For Karen),” a standalone sequence of unmatched artistic and prurient value.
28. Election (1999)
Alexander Payne spares no one in this needle-sharp high-school election satire—not Matthew Broderick’s overinvested teacher, not Reese Witherspoon’s overachieving class presidential candidate, not their cohorts and classmates, all of whom act out of self-interest disguised as being for the benefit of others. Everyone thinks they’re the hero of the story, but the only nice guy is the one who’s too dumb to know any better. Witherspoon has never been better than she is in the role of Tracy Flick, who’s all scary, steely ambition barely concealed by her chipper persona, and Broderick keeps pace with her as a man who’s acting in spite while telling himself it’s for some kind of greater good. But it’s Jessica Campbell who gets the movie’s best scene in her rousing campaign speech on behalf of apathy. Choosing not to participate has never looked so appealing.
27. Short Cuts (1993)
After scuffling through the ’80s (while still making memorable films), Robert Altman re-entered the wider cinematic consciousness at the start of the ’90s with Vincent & Theo and The Player, and then used his renewed clout to make one of his dream projects: an adaptation of multiple Raymond Carver short stories, woven together into a sprawling portrait of lost, lonely Los Angelenos. Besides being a West Coast version of Altman’s 1975 masterpiece Nashville, Short Cuts touched off a wave of “everyone’s connected” indie dramas that has yet to subside—though few of them have been as assured or distinctive as Altman’s jazzy Carver riff.
26. Eyes Wide Shut (1999)
Years of rumors about how erotic and mind-blowing Stanley Kubrick’s Eyes Wide Shut would be—coupled with the fact that it was Kubrick’s last film, and that its leads were then-megastars Tom Cruise and Nicole Kidman—made it difficult for the movie to get a fair shake back in 1999. But this dreamy, stealthily satirical adaptation of Arthur Schnitzler’s Traumnovelle looks more like one of Kubrick’s best with each passing year. Credit a screenplay by Kubrick and Frederic Raphael that turns Schnitzler’s novel into a psychosexual detective story, with Cruise venturing into a shadowy New York where everyone but him seems to be getting laid. The pace is somnambulant by design, but Eyes Wide Shut’s performances and dialogue are much funnier than they get credit for, and the film contains some of Kubrick’s most striking images—which would make them some of cinema’s most striking, too.
25. Fight Club (1999)
Dazzling, biting, and darkly funny, David Fincher’s Fight Club takes a knife to the empty routine of corporate-dictated, possession-oriented contemporary existence while acknowledging that tossing out the whole system in favor of a new life (and a new personality) isn’t the ideal answer, either. That the film manages to be a sincere shriek of alarm and rage while also being about split personalities, underground fighting rings, and male breast enlargement is itself a miraculous achievement. That Fincher’s visual virtuosity—the splices, the impossibly limber camerawork, the catalog of the narrator’s apartment, and the countless other innovative, memorable bits of style—still looks startlingly fresh is a testament to his place as one of the best directors working today. Fight Club has a beating heart underneath its flamboyantly caustic exterior, one that’s evidenced in an exhilarating, perfectly scored final sequence that showcases the happiest act of massive destruction.
24. Crumb (1994)
When Terry Zwigoff set out to make a documentary about his friend Robert Crumb, he somehow stumbled upon a story even bigger, stranger, and darker than the artist’s transgressive comic books: Crumb’s tumultuous relationship with his brothers Charles and Maxon. Charles and Maxon share Robert’s grim humor (Charles’ favorite phrase was a bitterly sarcastic, “How perfectly goddamned delightful it all is, to be sure”) and penchant for agonizing self-examination, but not his ability to function in the world beyond the most basic level. Crumb is rich in the qualities that define its subject’s work: It’s unrelentingly honest, brutally funny, and almost oppressively dark, but filled with empathy for the suffering of artists too fragile for this rough-and-tumble world. In its own strange way, the film is inspirational. In art, comedy, sex, and engagement with an often scary outside world, Robert finds the gifts that allow him to escape the prison of self that eventually took Charles’ life (he committed suicide in 1993, before the film was released) and continue to trap the even more troubled and tormented Maxon to this day.
23. Carlito’s Way (1993)
Scarface’s phenomenal home-video success gave director Brian De Palma and star Al Pacino the license to revisit the life and times of a criminal kingpin, this time from the perspective of a gangster who’s older and warier. Working from David Koepp’s smartly constructed script—which embeds the antihero’s downfall in nearly every scene, yet still makes him easy to root for—De Palma delivers one of his least ostentatious, most accessible films. But he can’t resist a climactic shootout in Grand Central Station that’s pure De Palma, using train platforms and escalators to illustrate the importance of who sees whom when, and whom they don’t see coming.
22. The Sweet Hereafter (1997)
Russell Banks’ shattering novel about a school-bus accident that robs a town of its children unfolds in a straight chronology, but each chapter is told through the perspective of a different character. A masterpiece of adaptation, Atom Egoyan’s The Sweet Hereafter rearranges the narrative into a puzzle structure that adds an allure of mystery similar to that of Egoyan’s Exotica while laying out the events to maximum impact. (The bus crash, for one, doesn’t occur until well into the second act.) Egoyan deals sensitively with how a town mourns and reconstitutes itself after such a devastating loss while also examining how the legal system is used to assign blame and compensation when no compensation would be sufficient. And in Ian Holm’s performance as a lawyer who tries to represent the families and Sarah Polley’s turn as a crippled survivor, the film goes deep into the complex relationship between parents and children, and how their bond can be severed.
21. Fargo (1995)
The Coen brothers’ first breakout hit crystallizes all their strengths as writers and directors: The diamond-sharp plotting, the unparalleled gift for stylized language (in this case, the quotable dialect of native Minnesotans), the exacting control over every aspect of the production. What makes Fargo special, beyond the Coens working at the peak of their craft, is that it considers the crime thriller in moral terms, turning the bloody mayhem over a scheme gone wrong into a reflection on the bedrock values of home and family. The Coens sharply contrast the desires and temperaments of its two main characters: a car salesman (William H. Macy) who arranges to have his wife kidnapped to bilk ransom money out of his wealthy father-in-law, and a pregnant police chief (Frances McDormand) who waddles her way to the bottom of the case. In McDormand’s steady gumshoe, Fargo has an unforgettable hero who can piece together the clues without comprehending the crime.
20. Red (1994)
The last of Krzysztof Kieslowski’s Three Colors trilogy—and the last film the great Polish director made—focuses on the theme of “fraternity,” just as its predecessors focus on different values represented by the French flag. But, as with the other films in the trilogy, each of the values remains in play in a story that explores the unseen connections between citizens of Geneva, particularly a young model (Irene Jacob) and a retired judge (Jean-Louis Trintignant) with a penchant for eavesdropping on his neighbors. In the ’00s, many directors built on the everything-is-connected themes Kieslowski explored throughout the trilogy, and throughout his work in general. But none found a way to build to a moment as overwhelmingly moving as Red’s final scene, a statement of hope for the soul of Europe as it faced a new century of peril and possibility.
19. Exotica (1994)
Undoubtedly the most cerebral movie ever to be set primarily at a strip club, Exotica plays a tantalizing game of “What the hell’s going on here?” with the viewer, parceling out information one outré detail at a time. Why does Bruce Greenwood’s buttoned-down family man order regular lap dances from stripper Mia Kirshner, showing no sign of sexual arousal and leading her through what seems to be some sort of anguished catechism? If Sarah Polley is babysitting every night, why does she appear to be alone in the house, spending all her time practicing the movie’s theme song on the piano? To what purpose does the DJ at the club Exotica, Elias Koteas, keep anonymously taunting Greenwood from the restroom stalls? “We’re here to entertain, not to heal,” insists Exotica’s manager (Arsinée Khanjian), but Atom Egoyan’s bizarro-world take on grief management builds inexorably to a final scene that pieces all of the above together in a powerfully cathartic way, even as it also suggests a new, more disturbing mystery lurking just off-screen (which became the subject of Egoyan’s subsequent film, The Sweet Hereafter). Endless T&A has rarely been employed to such mournful and devastating purpose.
18. Schindler’s List (1993)
There’s no surer way for a cinematic pseud to beef up his or her cred than slagging off Steven Spielberg, especially when the director takes on a subject with the enormity of the Holocaust. But to deride the sentimentality of Schindler’s List, or to criticize Spielberg for telling the story of Jews who survived rather than the millions who did not, is to mistake his carefully judged calculations for mere sugarcoating. (It’s a wonder how Shoah’s Claude Lanzmann, who levied the latter charge, justifies his own Sobibor, an account of the rare instance in which concentration-camp prisoners rose up against their captors. As for Jean-Luc Godard, who accused Spielberg of “reconstructing Auschwitz,” his antipathy for the chosen people is a matter of record.) The scene in which a group of screaming, naked women believe they are being herded to their death, only to find that what they take to be a gas chamber is actually a real shower, leads the audience right up to the line where onscreen characters become simply actors playing dead, leaving the audience fully aware they’ve been let off easy.
17. Safe (1995)
Todd Haynes made his name and reputation with “Superstar: The Karen Carpenter Story,” a notorious and legendary short film that used Barbie dolls to chronicle the pop star’s slow descent and eventual death from anorexia-related complications. A lawsuit from Richard Carpenter and music-licensing issues ensured that the film would never receive an official legal release, but Haynes fruitfully explored similar thematic material with Safe, a quietly terrifying psychological drama that cast a never-better Julianne Moore as a housewife who develops a strange series of maladies that rend her orderly and conformist lifestyle asunder and send her on a desperate journey to identify and cure her illness. Much of what makes Safe so terrifying is its open-ended ambiguity: Moore seems to be allergic not to any specific substance, but rather to the stifling conformity and plastic artificiality of her surroundings. As played by Moore with a heartrending combination of strength and vulnerability, the film’s protagonist is immaculately put-together on the outside but rotting away from incurable soul-sickness on the inside, a victim of a world that pushes her into stifling roles that deny her fundamental humanity and drive her methodically insane.
16. The Big Lebowski (1998)
When the Coen brothers followed up their Academy Award-winning breakthrough hit Fargo (a film deemed “culturally, historically, or aesthetically significant” by no less an authority than the United States National Film Registry) with a shaggy stoner lark about the world’s most unlikely and least qualified would-be shamus (Jeff Bridges as “The Dude,” the signature role of his magnificent career) and his mock-heroic quest to retrieve a missing rug that famously held the whole room together, it felt like one of the smartass brothers’ inside jokes. The film was released to mixed reviews, modest box-office, and widespread confusion before beginning a strange journey to becoming the cult film of the ’90s, the Rocky Horror Picture Show of its time. The Big Lebowski created an entire subculture of tongue-in-cheek “achievers” who dress up like the film’s characters and attend “Lebowski Fests” where they drink white Russians, bowl, and recite favorite lines. Like Bridges’ performance, The Big Lebowski only appears effortless: The slacker facade and shaggy-dog plotting—with its surplus of red herrings, dead ends, and seemingly pointless digressions—belie the film’s underlying meticulousness and manic perfectionism. Slow-motion shots of middle-aged men bowling are choreographed and scored as artfully as anything in Stanley Kubrick’s oeuvre, in a comedy that gave pop culture one of its quintessential antiheroes and created an absurd and insanely detailed universe. Cult movies come and go, but like its hero, The Big Lebowski abides.
15. Groundhog Day (1993)
The very definition of a high-concept Hollywood movie, this Bill Murray vehicle about a vain weatherman stuck reliving the same day could’ve been just another broad, slack comedy. But Murray and writer-director Harold Ramis (working with screenwriter Danny Rubin) invest deeply in their premise, considering all the pros and cons of repetition before setting the hero on a quest to live this one day perfectly. The result is a movie that’s at once hilarious, clever, and surprisingly moving as it considers what it means to “get it right.” Groundhog Day is also one of the last movies where Bill Murray played the “Bill Murray type” he’d popularized in the ’70s and ’80s. He nailed it here; why repeat?
14. Hoop Dreams (1994)
For five years, director Steve James and his crew followed two black teenagers from Chicago who dreamed of becoming professional basketball players. Both kids, William Gates and Arthur Agee, were recruited to play for St. Joseph High School, a predominantly white basketball colossus whose most famous alum is NBA superstar Isiah Thomas. Gates and Agee see the game as their long-shot ticket out of poverty, which amplifies the pressure to succeed and makes every setback, from injuries to academic struggles to conflicts with the coach, seem potentially life-threatening. Hoop Dreams establishes a close relationship with the boys and their families that, over time, reveals the way ordinary people of limited means struggle to stitch up tears in the social fabric. Basketball is a source of hope and delusion, but it’s also just the vehicle for a profound, multi-layered documentary about the pursuit of the elusive American dream.
13. Boogie Nights (1997)
Paul Thomas Anderson was still wearing his influences on his sleeve when he made Boogie Nights, which combines the sprawling ensemble and overlapping narratives of a Robert Altman movie with the juiced-up filmmaking of Martin Scorsese at his most muscular. A story of many lives united by a common profession—pornography—it doubles as a study in changing times and the way even the most underground forms of expression got commodified in the ’80s. But it’s also an old-fashioned Hollywood—well, San Fernando Valley—rise-and-fall story about a kid (Mark Wahlberg) who ascends through the porn industry, lets success go to his head, and risks losing his soul in the process, all shot with breathless momentum and soundtracked to era-appropriate hits that often seem to be telling variations on the same story of innocence lost.
12. Miller’s Crossing (1990)
Miller’s Crossing is a like a dream of a gangster film, one that’s been freed from the normal rules in order to deliver a more concentrated dose of tough guys, dames, mob leaders, and betrayals. The Coen brothers are sometimes dismissed as being arch and emotionally removed when they verge toward pastiche like this, but Miller’s Crossing is far from an exercise in re-creating an old genre with air quotes. The film has a melancholic, poetic soul in Gabriel Byrne, who works to set things right even after his boss and friend Albert Finney casts him out. Byrne may have had a thing with Marcia Gay Harden, but it’s Finney who breaks his heart, and to whom he remains loyal through machinations and murder. The Coens stack their film with unforgettable figures, from John Turturro’s devious Bernie Bernbaum to Jon Polito’s fuming Johnny Caspar, but Finney’s revealed to be the baddest of them all in the incredible action sequence in which he confronts would-be assassins in his bathrobe, undaunted.
11. Barton Fink (1991)
Not Joel and Ethan Coen’s most perfect movie (see the previous entry), Barton Fink is one of their most profound, and painful. It’s also, in retrospect, one of their most personal, the opposing half of A Serious Man’s autobiographical anxiety. John Turturro’s leftist playwright turned Hollywood hack may be modeled on Clifford Odets—whose Sweet Smell Of Success, to be fair, is no Blood, Sweat And Canvas—but he’s more like the Coens’ negative self-portrait, crystallizing their deep-seated distaste for and fear of cinematic pretension. For years, they maintained that their movies were about nothing, that their carefully worked-out symbolism was merely a product of critics’ overactive imaginations, and perhaps the similarity between wallpaper paste oozing from the walls of the Hotel Earle and the pus draining from traveling salesman John Goodman’s infected ear is just a coincidence. But more likely it’s the product of creators so in tune with their collective unconscious that their art surpasses their intent.
Next: Our top 10, featuring a double feature by a single filmmaker. See our first 20 films here, and the outliers and personal favorites that didn't make the list here. Listen to what we have to say about how the decade changed cinema here, and see the '90s films we hate the most here. ||||| Few talk about the ’90s as a filmmaking renaissance on par with the late ’60s and early ’70s, but for many of the film critics at The A.V. Club, it was the decade when we were coming of age as cinephiles and writers, and we remember it with considerable affection. Those ’70s warhorses like Martin Scorsese and Robert Altman posted some of the strongest work of their careers, and an exciting new generation of filmmakers—Quentin Tarantino, Joel and Ethan Coen, Wong Kar-Wai, Olivier Assayas, David Fincher, and Wes Anderson among them—were staking out territory of their own. Presented over three days—with two 20-film lists, then a separate one for the top 10—our Top 50 survey was conducted in an effort to reflect group consensus and individual passion, with the disclaimer that all such lists have a degree of arbitrariness that can’t be avoided. (On Thursday, we’ll run a supplemental list of orphans, also-rans, and personal favorites that will undoubtedly be quirkier.) One more note before digging in: Filmmakers who had a particularly good decade were often divided against themselves in the voting. Which Coen brothers movie is the strongest? Which color from Krzysztof Kieslowski’s Three Colors trilogy shone the brightest? Peel slowly and see…
50. Dead Man (1995)
After a protracted battle between director Jim Jarmusch and Miramax head Harvey Weinstein ended in a bitter stalemate, Jarmusch’s idiosyncratic “acid Western” wasn’t released so much as booted out of the trolley car and left to rot. It was an all-too-fitting treatment of a film whose eponymous hero, an accountant played by Johnny Depp, travels west by train to the town of Machine, an Industrial Age hellpit that seems destined to eat him alive even before a gunfight leaves him mortally wounded and on the run from bounty hunters. But Jarmusch’s mesmerizing black-and-white odyssey, charged by a rib-rattling Neil Young guitar score, acquired a few prominent champions and a devoted cult following during its brief run in theaters. Of its many pleasures—Robby Müller’s evocative cinematography, its picture of a Wild West tamed by the forces of violence and industry, its philosophical journey from life to death, its acute sensitivity to American Indian culture—perhaps the greatest is that Dead Man is still resolutely a Jim Jarmusch movie, not far removed from the fish-of-out-water comedy of Stranger Than Paradise or Down By Law. Same fish, different era.
49. American Movie (1999)
Before advances in technology democratized filmmaking—if only to an extent—it required a potent combination of talent, self-delusion, and berserk self-determination to get a film made independently. Chris Smith’s wonderful 1999 documentary American Movie chronicles the tragicomic misadventures of Mark Borchardt, a filmmaker with an abundance of the last two qualities, if not quite the first, and his chubby musician sidekick Mike Schank, as they struggle to make Coven, a low-budget horror film they hope to crank out to fund the film Borchardt really wants to make, a magnum opus called Northwestern. American Movie suggests a latter-day documentary version of Ed Wood: Borchardt shares the late filmmaker’s strange charisma and gift for roping others into his dream world, no matter how preposterous, unlikely, or silly it might be, as well his determination to make movies by any means necessary, even if that means forgoing even the faintest pretense of professionalism and giving in to a childlike sense of play. Smith’s strangely beautiful, quintessentially Midwestern cult classic is a darkly funny but ultimately sympathetic valentine to the need to create in the face of seemingly insurmountable obstacles.
48. Ed Wood (1994)
In retrospect, Tim Burton—whose career has grown steadily less interesting as his budgets have increased—seems like precisely the wrong person to laud the work of Ed Wood, whose Plan 9 From Outer Space has been called the worst movie ever made. (Although if he were around today, Wood would be the new Tommy Wiseau.) But Ed Wood is filled with genuine affection for Wood’s no-budget creations—cardboard tombstones, rubber octopus, and all—and it finds genuine pathos in Wood’s relationship with Bela Lugosi (Martin Landau), then an aging addict who died before Plan 9 had finished. Johnny Depp’s lead performance, a rare (for him) balance of mischief and discipline, is a career highlight, and Bill Murray’s brief turn as a melancholy homosexual opened the door for Rushmore and Lost In Translation.
47. Starship Troopers (1997)
Paul Verhoeven’s gonzo satire was destined, even designed, to be misunderstood. An action spectacle with the heart of a Grade-Z creature feature, the movie was derided as “90210 in space,” missing the fact that Verhoeven deliberately cast blandly good-looking actors as fodder for the movie’s militaristic mill. Stealing shots from Triumph Of The Will, the story of a society abandoning individual rights, and even identities, in response to an alien invasion, Starship Troopers is a wicked, acidic comment on how easily people can be convinced to trade freedom for security. That it also functions for the unaware as a full-throated Fascist recruiting ad is part of its brilliance. Verhoeven admits and even indulges its appeal before turning it inside out.
46. Heavenly Creatures (1994)
Years before he conquered the world by bringing Tolkien’s Middle-earth to life, Peter Jackson made his reputation as a serious filmmaker (following several gross-out horror-comedies) with this fact-based account of the homicidal friendship between two teenage girls in 1954 New Zealand. Just to show off, he also discovered both Kate Winslet and Melanie Lynskey, playing best friends (with vaguely implied benefits) who retreat into a fantasy world they create together, realized by Jackson as a phantasmagorical magnification of their construction-paper fortresses and Plasticine figures. When one of the girls’ mothers takes steps to separate them, things turn ugly, but the film is less interested in the sordid details of the real-life crime than in depicting the overwhelming fervor of adolescence, when everything feels like either the most glorious experience of your entire life or the end of the universe.
45. The Limey (1999)
Steven Soderbergh had already racked up plenty of accolades, but the back-to-back release of Out Of Sight and The Limey in 1998 and 1999 firmly established him as one of the most vital and protean filmmakers of his era. A revenge thriller told as an acid flashback, The Limey slips between time frames and points of view, mingling its onscreen story with its actors’ histories: Terence Stamp and Peter Fonda—cannily cast as a sleazy countercultural entrepreneur—are riffing on their screen personae as much as they’re playing roles, although Soderbergh and writer Lem Dobbs keep their cinematic reference points below the surface. It’s a head-scratcher whose mysteries deepen on repeat viewings, but it predates Soderbergh’s decision to separate his art films from his entertainments—an Ocean’s 12 here, a Bubble there—so even those puzzling over The Limey’s fractured narrative can delight in the moment when Luis Guzmán gazes dreamily over the smog-shrouded Los Angeles skyline and muses, “You could see the sea out there—if you could see it.”
44. Metropolitan (1990)
Whit Stillman’s debut about the “urban haute bourgeoisie”—uptown, upper-class New York teens navigating debutante season—is set in a world that’s acknowledged as outdated even to those participating in it. But being aware of the ridiculousness of their status doesn’t stop them from also taking it seriously. Animated by Stillman’s hilarious, clever, puffed-up dialogue, the characters are overeducated and spend an awful lot of time in formalwear, but their personal dramas are of a very normal and relatable variety. The contrast between the struggles they undergo with romance and friendship and the efforts to intellectualize them are as poignant as they are comical, and the film manages to make a pricey cab ride to the Hamptons into a ridiculous but noble gesture.
43. Terminator 2: Judgment Day (1991)
Before he became a creator of bloated, stilted worlds and a crafter of ham-fisted allegories, James Cameron established himself as a smart genre specialist with a nifty, low-budget little 1984 B-movie called The Terminator, which launched his directorial career and catapulted its funny-talking lead to superstardom. With 1991’s Terminator 2: Judgment Day, Cameron brought the low-budget virtues he learned during his apprenticeship with Roger Corman—economy, focus, novelty—to the big-budget realm. The superior sequel implicitly acknowledges that between The Terminator and Terminator 2, Arnold Schwarzenegger had become both a huge action hero and a bit of a comic figure, casting him as a good guy this time around and making the bad guy a new, more advanced Terminator (Robert Patrick) capable of adopting any shape or form through the miracle of a new science-fiction technology called morphing. Where Schwarzenegger was clunky and huge—though blessed with unstoppable determination and momentum—Patrick was sleek and slippery, a shape-shifting android demon terrifying in his unpredictability and superhuman malleability. Like Avatar, Terminator 2: Judgment Day pushed the boundaries of technology forward; only this time, Cameron used computer-generated imagery as a powerful tool to expand the visual and storytelling vocabulary of film, and not as an end unto itself.
42. All About My Mother (1999)
Spanish director Pedro Almodóvar dedicated All About My Mother to “actresses who have played actresses,” which describes much of the film’s cast, to various metaphorical degrees. The story starts when a 17-year-old is fatally injured by a car while chasing a stage actress, hoping for an autograph. His mother then ameliorates her grief by seeking out his father, now a transvestite dying of AIDS. The setup comes straight out of a soap opera and sprawls outward from there, with a death in childbirth, an Alzheimer’s-stricken father, a witty transsexual prostitute, and many more colorful, theatrical events and characters. But over and over, Almodóvar brings his melodrama back to the idea of people choosing their own families and identities, and playing roles with each other that define their interactions. It’s anarchic and clever, like so many of the director’s films, and emotionally resonant in a big Douglas Sirk way; but it’s also touching in its deep-seated feelings for women, and the personae people adopt to defend themselves or make their lives functional.
41. Raise The Red Lantern (1991)
Shot in three-strip Technicolor, a process that had long since been abandoned in the U.S., Zhang Yimou’s heartbreaking historical drama makes the most of its titular pigment. The story of a merchant’s daughter (Gong Li) who becomes a wealthy man’s concubine is both achingly romantic and breathtakingly controlled, befitting a story whose underlying theme is the battle between order and freedom. Outside of his native China, Zhang’s movie was widely interpreted as a parable of rebellion against a repressive government; at home, of course, he denied it, protecting a career that has become less transgressive as Zhang’s need for state funding has increased. (See the tepid, overblown The Flowers Of War for proof.) Although it still awaits a video transfer that will do its limpid colors justice, Raise The Red Lantern still stands as a high-water mark, not only for Zhang’s career, but also for his entire generation of Chinese filmmakers.
40. Trainspotting (1996)
Danny Boyle’s stylish second film (after 1994’s Shallow Grave) stars Ewan McGregor as the core of a loose, fairly obnoxious band of buddies variously addicted to heroin, sex, and violence. But it’s just as accurate to say the film stars Boyle’s visual imagination, which comes into play as he attempts to portray onscreen the subjective feeling of a drug high, a drug overdose, a drug withdrawal, and the long, boring, flat days a drug addict experiences after kicking the habit. Perfect casting and a terrific soundtrack help him considerably, but Trainspotting is at its best when it gets subjective, following McGregor through so many moods and moments that the actual plot—what little of it there is—seems beside the point.
39. The Blair Witch Project (1999)
Yeah, yeah. Hate it if you must, but at least acknowledge that the breathless hype surrounding The Blair Witch Project’s initial release created expectations that no horror movie could possibly meet. Thing is, it’s not really a horror movie, except in the broadest possible sense of the term. The most unnerving moments occur in broad daylight, as the film’s three protagonists gradually unravel through sheer exhaustion and begin to turn on each other. Perhaps it’s for the best that The Blair Witch Project’s method has rarely, if ever, been replicated since: Directors Daniel Myrick and Eduardo Sanchez sent three novice actors toting two cameras into the woods without a script, giving them less and less food over the course of several days and disturbing their sleep with strange noises. The performances this technique elicited bugged a lot of people, but that’s arguably because audiences rarely see emotional extremity quite this real on a movie screen. When Heather Donahue performs her much-celebrated, much-mocked flashlight monologue near the end, part of her obviously knows that she’s acting, but there’s a significant part of her that’s genuinely and unmistakably on the brink of losing it.
38. Fast, Cheap & Out Of Control (1997)
From his first feature, 1978’s Gates Of Heaven, director Errol Morris has shown an abiding interest in eccentrics, visionaries, and eccentric visionaries, but Fast, Cheap & Out Of Control accomplishes the seemingly impossible feat of profiling four of them at once. There’s no real-world relationship that links Morris’ fascinating subjects—a wild-animal trainer, a mole-rat specialist, a topiary gardener, and a robot scientist—so he does all the linking himself, making intuitive yet profound associations while cutting between them. What he finds foremost is a gallery of obsessives, each accomplished in their narrow and peculiar areas of expertise. Beyond that, Morris’ montage sequences, with their Fellini-esque carnival-of-life quality, offer ruminations on life, death, and human consciousness, and a cohesive picture of men whose jobs involve creating order out of chaos. It’s a one-of-a-kind film by the most original documentary stylist of his time.
37. Glengarry Glen Ross (1992)
James Foley’s film adaptation of David Mamet’s stage play isn’t hugely cinematic: It takes place in just a couple of locations, and keeps the camera movement and editing flash to a minimum. It’s only a few steps above a stage production captured on film. But it’s still a stellar experience, thanks to a phenomenal cast, all operating at the top of their games: Jack Lemmon, Al Pacino, Alan Arkin, Kevin Spacey, Ed Harris, and Alec Baldwin (appearing in a single, indelible scene written to help expand the movie) all attack Mamet’s crisp dialogue with a tense, revved-up energy that crackles through the entire film. The script doesn’t waste a line, and the film doesn’t waste a look or a gesture. Lemmon’s richly realized salesman, covered in flop-sweat but desperate to get back on top of his game so he doesn’t lose his job, represents one of the strongest performances on his impressive résumé, but all of the acting in Glengarry Glen Ross is terrific. It’s a taut, endlessly quotable piece, full of twists and tension.
36. L.A. Confidential (1997)
By the mid-’90s, Curtis Hanson had earned a reputation as a talented journeyman, a hardworking director whose name hardly anyone knew. But a string of early-decade hits (Bad Influence, The Hand That Rocks The Cradle, The River Wild) won him the clout to take on an ambitious dream project: James Ellroy’s borderline-unadaptable 1990 novel L.A. Confidential. Part noir, part cross-section of 1950s L.A., the film cast a pair of then-barely known Australian actors—Guy Pearce and Russell Crowe—as cops whose differing approaches to their jobs puts them at odds with one another, until evidence of crimes bigger than either had ever imagined brings them together. Working with screenwriter Brian Helgeland, Hanson streamlines the plot and tones down the era-appropriate racism of Ellroy’s novel, but captures the novel’s sense that creeping rot touches both the city’s upper echelons and lowest depths. It’s a stylish but substantial crime film wrapped around a history lesson and acted with brio by a cast determined to do more than just fill out a bunch of handsome period clothes.
35. Naked (1993)
Were we to compile a supplementary list of the ’90s’ best performances, David Thewlis would surely be somewhere very near the top. Naked is essentially a lacerating record of his improvisational descent into hell, fashioned into coherent yet still quasi-maniacal drama by writer-director Mike Leigh. First seen apparently raping somebody in a dark alley—at best, it’s a consensual encounter that’s gone horribly wrong—Thewlis’ Johnny heads from Manchester to London to seek out an ex-girlfriend (Lesley Sharp), with whom he quickly becomes irritated. Indeed, everything irritates Johnny, who would be insufferable if not for the razor-sharp wit that inflects his nonstop series of sarcastic observations and cruel attacks. (Leigh contrasts Johnny with a more upscale but far less intelligent sadist, thereby raising uncomfortable questions about how much inexcusable behavior we’ll accept, and on what terms.) It’s a dazzling feat of sustained defensive aggression, like watching an Olympic diver perform a double somersault tuck into the Grand Canyon. And the movie, which is almost entirely nocturnal, affords it an arrestingly Stygian context.
34. Seven (1995)
In another filmmaker’s hands, it could have been so cheesy: A brink-of-retirement detective (Morgan Freeman) and his hotshot young replacement (Brad Pitt) contend with a diabolically brilliant serial killer whose murders, they gradually realize, illustrate the Seven Deadly Sins. Thankfully, the script landed on the desk of David Fincher, still smarting from the studio interference he’d experienced making Alien3. Fincher committed wholeheartedly to the film’s pitch-black heart (with an assist from Pitt, who threatened to walk if the original, gruesomely downbeat ending was changed), crafting one of the most relentless nerve-janglers of the modern era. That a film so suffused with disgust for the urban nightmare should reach its nihilistic climax in a deserted field miles outside of the pointedly unnamed town is just one of its many discordant elements. There’s a half-hearted attempt at a marginally hopeful fadeout, but the overall effect is that of a kick in the gut (or a bit lower). What’s in the box? The remnants of your faith in humanity, that’s all.
33. The Matrix (1999)
Andy and Larry Wachowski’s The Matrix became a sensation almost from the moment it was released, thanks to an exciting trailer—with Keanu Reeves dodging bullets and cool-looking characters practicing martial arts in mid-air—and thanks to word-of-mouth that claimed this was the first American sci-fi in years that had the goods. Even now, after two decades of other films aping The Matrix’s visual style and special effects, the original remains instantly hooky, with one grabby scene after another. The plot itself has a highly satisfying structure, first introducing super-hacker Thomas “Neo” Anderson (Reeves), then having Neo discover that there’s another layer of reality beneath what his conscious mind has always known. This is a classic hero’s journey, bolstered by the feeling of revelation.
32. Close-Up (1990)
A true one-of-a-kind film, Close-Up finds Abbas Kiarostami revisiting an incident in which a devoted film fan pretended to be acclaimed Iranian director Mohsen Makhmalbaf, duping a family of Makhmalbaf admirers in the process. The impostor is a man named Hossain Sabzian, who was caught and convicted, and here, Kiarostami has him reenact his act of deception, casting all the other real-life principals as themselves as well (and bringing in the real Makhmalbaf for good measure). It’s a study in truth and illusion, one that arrives at no conclusions as to where one ends and the other begins, or as to why Sabzian did what he did. It doesn’t have to, either: Kiarostami’s playful, and ultimately profound, offhand post-modernism goes deeper than any pat conclusions ever could.
31. Paradise Lost: The Child Murders At Robin Hood Hills (1996)
Sixteen years, three additional documentaries (including the forthcoming West Of Memphis), several high-profile celebrity champions (most notably Johnny Depp and Metallica), and a face-saving Alford plea agreement later, the West Memphis Three are finally out of jail. But while the full story of their path to freedom is plenty compelling, this initial record of the case—in which three Arkansas teens were convicted of murdering and sexually mutilating three smaller boys, mostly on the basis of their interest in death metal and the occult—is about much more than a simple miscarriage of justice. Directors Joe Berlinger and Bruce Sinofsky earned the trust of the community and were rewarded with an unprecedented emotional intimacy; so vivid are the “characters,” and so plentiful the “twists,” that it’s sometimes difficult to remember that it’s non-fiction. It’s a testament to the film’s profound and contradictory survey of human nature that it would still be indispensable even if the West Memphis Three had been acquitted and their story had ended happily right there.
Next: The next 20, featuring Robert Altman, the Coen brothers, Steven Spielberg, and more. See our top 10 here, and the outliers and personal favorites that didn't make the list here. Listen to what we have to say about how the decade changed cinema here, and see the '90s films we hate the most here. ||||| On Monday, we started counting down our top 50 films of the 1990s, which we tabulated by blind votes among the film-writing staff. Following parts one and two, here’s the last of the batch: our most acclaimed films of the decade.
10. Being John Malkovich (1999)
For years, Charlie Kaufman’s screenplay for Being John Malkovich enjoyed a mixed reputation as a script far too brilliant and original to ever get made. The prevailing wisdom held that the script was too weird, dark, and meta to ever make it onto the big screen, even if the filmmakers did somehow manage to get an actor as prickly and difficult as Malkovich to play a version of himself as a sketchy, narcissistic, sex-obsessed jerk. Thankfully, a music-video prodigy named Spike Jonze soldiered on and brought Kaufman’s dizzyingly original, wickedly postmodern vision to the screen with a remarkable cast headlined by John Cusack, Cameron Diaz, Orson Bean, Catherine Keener, and, yes, Malkovich himself in one of the greatest extended acts of self-deprecation in film history. Cusack and Diaz diligently strip away any remaining vestige of movie-star glamour or vanity and embrace internal and external grunginess, playing a couple leading lives of sad, sour desperation before they discover a magical portal into the mind of John Malkovich that turns their lives upside down and kick-starts a strange wave of sexual role-playing and competition involving their shared object of desire, a cynical opportunist played by Keener. In his feature debut, Jonze takes the script’s absurdist, surreal flights of fancy and thoughtful ruminations on fame, jealousy, and ambition and grounds them in all-too-human emotions and a fully fleshed-out vision of the world as a Darwinian nightmare ruled by fear, greed, lust, anxiety, and uncontrollable compulsions.
9. Rushmore (1998)
The template for how “a Wes Anderson film” looks and feels was established with the director’s second feature, Rushmore, a quirkily personal movie about a private-school misfit (played by Jason Schwartzman) who enters into a complicated mentor/protégé relationship with depressed local businessman Bill Murray. What stands out immediately about Rushmore is its style, which is consciously theatrical at times and populated by characters who dress and act like they stepped out of the pages of a mid-20th-century juvenile novel. But, as with Anderson’s subsequent films, some viewers overlook Rushmore’s depth of feeling. Anderson and his co-writer, Owen Wilson, are pining for an adolescence that never was, one they only experienced via comic strips, British youthsploitation movies, and old copies of The New Yorker. But they don’t ignore how the messy realities of the adult world make that pop utopia all but impossible to attain, aside from a few fleeting moments.
8. Unforgiven (1992)
Clint Eastwood walked away from Westerns after Unforgiven, and it’s not hard to see why: What was left to say after this? Working from a script by David Webb Peoples that dated back to the ’70s, Eastwood made the film into a wintry study of a genre in which the lawlessness of the frontier does battle with the civilizing law and order of those attempting to settle it. But, as many Westerns before realized, the conflict was rarely so simple. Eastwood plays a retired gunfighter who, as the film opens, has put his bad old killing days behind him for the quiet life of a farmer. But farming isn’t easy and, absent the civilizing influence of his late wife to keep him on the righteous path, he accepts a gun-for-hire job. It at least sounds like a just cause: collecting a bounty by killing two cowboys who mutilated a prostitute and received only a slap on the wrist from the sheriff (Gene Hackman) for their crimes. The closer Eastwood comes to his goal, however, the more tangled the issue becomes, as he comes ever closer to tumbling back into his old life.
Eastwood became an international star playing The Man With No Name in a string of films for Sergio Leone that turned the Western into crudely beautiful pop art. They also made little attempt to hide the ugliness and cruelty of the American frontier, paving the way for the revisionist Westerns that followed. In many ways, Unforgiven closes the chapter on both Eastwood’s larger-than-life ’60s Western roles and on the way the genre was brought down to earth in the following decade, putting archetypal characters—the sharpshooter, the tough lawman, the merciless killer, the feckless kid—under the microscope to see what makes them work. In addition to working as a chilly, bloody drama, it’s also an intense study of what kind of people carved out the West, the unpleasant circumstances and moral compromises of the carving, and whether their sins linger on, both in their hearts and in our own history.
7. Reservoir Dogs (1992)
From its opening deconstruction of “Like A Virgin” to its climactic parody of the Mexican standoff, Quentin Tarantino’s stunningly assured debut puts a fresh spin on the heist movie—so fresh, in fact, that the heist itself isn’t even depicted. Instead, a handful of nattily attired hoods (played by a dream cast of character actors, including Harvey Keitel, Steve Buscemi, and Tim Roth) pace the budget-conscious warehouse set trading profane, discursive arias of paranoia and distrust, while judiciously placed flashbacks reveal crucial backstory and the identity of the undercover cop in their midst. Churlish fans of Hong Kong action cinema accused Tarantino of having pilfered Ringo Lam’s City On Fire, but two decades later, the charge seems absurd; it’s abundantly clear now that Tarantino is essentially a pastiche artist, and Reservoir Dogs saw him emerge fully formed, drawing from his encyclopedic knowledge of obscure genre flicks to create something uniquely his own. It’s all here: the digressive pop-culture debates, the fetishization of ’70s music (via Steven Wright as radio’s most ironically phlegmatic DJ), the playful tinkering with dramatic structure, and the climactic surge of genuine emotion that sneaks up on viewers from a thicket of clever badinage. Mr. Blonde’s harrowing torture-dance to Stealers Wheel got all the attention, but it’s the tender bond between ever-loyal Mr. White and gut-shot Mr. Orange, and its tragic resolution, that truly cuts deep.
6. Out Of Sight (1998)
Who would have guessed that Steven Soderbergh would have such a way with movie stars? He’d worked with name actors before, but in Out Of Sight, he showcases George Clooney and Jennifer Lopez as the charismatic, sexy, impossibly good-looking pair that they are. Clooney and Lopez loom larger than life as an escaped bank robber and a U.S. Marshal playing a game of cross-country chase. Out Of Sight is resolutely contemporary, from the warm, sleek surfaces of its cinematography to its diced-up timeline, but it has an old-fashioned quality to it. Clooney and Lopez are on opposite sides of the law, but they have the sparking chemistry of screwball-comedy leads from the moment they end up locked in a car trunk together. Despite there seemingly being no scenario in which the competent criminal who just can’t go straight and the equally capable cop with a taste for bad boys could waltz off together into the sunset, viewers root for them as a couple because they seem, in the all the best ways, to belong together. Though the weight of this hope grows heavier as the climax approaches, the film manages to pull off an ending that’s satisfying without requiring either of the characters to compromise who they are. With Out Of Sight, Soderbergh proved that sometimes the most experimental thing a filmmaker can do it try to make a commercial movie.
5. Chungking Express (1994)
Dazed and dreamy with urban romance and memory, Chungking Express is enough to make any moviegoer fall for Wong Kar-wai and his particularly cinematic vision of Hong Kong. Shot in the crowded, compact landscapes of the city’s Central and Tsim Sha Tsui neighborhoods, Chungking Express offers up a pair of languid, half love stories tied together by a shared location, which unfold amid an atmosphere of loneliness and longing so heavy you can practically run your fingers through it. Takeshi Kaneshiro muses about canned pineapple and his ex-girlfriend and tries to woo a drug smuggler played by Brigitte Lin, while Faye Wong breaks into an oblivious Tony Leung’s apartment to secretly redecorate and help him get over his own heartbreak. Characters don’t always neatly come together in Chungking Express, but the film finds a palpable impact to the ways in which they glance off each other in a city thick with people and possibility, but not connection. In terms of sheer sensuality, there’s nothing to rival Wong’s film, which is the definition of “lush,” from its gorgeous Christopher Doyle cinematography to the pop songs its characters love to the incredible watchability of its leads.
4. Dazed And Confused (1993)
Slacker marked Richard Linklater as a filmmaker with the ability to make esoterica meaningful; Dazed And Confused showed he could apply those skills to characters and a story that resonated beyond a community of grad students and eccentric artists. Set over the course of one day in 1976—the last day of school for a group of suburban Texas high-schoolers—Dazed And Confused takes the crowd-pleasing form of a ’70s/’80s teencom, driven by simple quests like “finding a party” and “not getting an ass-whooping.” But Linklater frames both adolescence and the ’70s from the perspective of a sympathetic but wiser older man who rues what’s going to become of these kids in the years and decades to come, even though he enjoys hanging out with them while they’re still young and relatively ignorant. The ’90s were awash in ’70s nostalgia, but Dazed And Confused did more than just revel in polyester kitsch. Linklater showed the times for what they were: uniquely decadent in some ways, but also a backdrop for the same mini-dramas that continue to play out in American teenagerdom.
3. Toy Story 2 (1999)
Pixar Animation Studios made its first foray into feature filmmaking with 1995’s Toy Story, a fine, funny film with authentically touching scenes. But Toy Story 2 is a rare case of a sequel improving on the original. Without losing the first film’s big cast, snappy dialogue, energetic pace, or zippy gags, it delves deep into the emotional resonance of broken relationships and unrequited love—a tall order for an animated children’s film about the shenanigans toys get up to when people aren’t looking. At its most emotionally ambitious, it’s a sweet, sad, impressively empathetic portrait of how much abandonment hurts, and how it affects the psyche. But at the other end of the spectrum, it’s a terrific adventure with an endlessly playful sense of humor. While 2010’s Toy Story 3 brought even more emotional impact and a more clearly expressed message about the continuity of generations and the passage of time, a good part of its impact came from the quality of its predecessors, how they built a family of characters, and how their relationships developed over time, letting viewers who were young when Toy Story hit theaters grow up alongside the franchise. Still, on a standalone basis, Toy Story 2 is the strongest of the three.
2. Pulp Fiction (1994)
If you’re looking for a watershed moment in ’90s cinema, Quentin Tarantino’s Pulp Fiction was the movie that changed everything, elevating genre trash into Palme D’Or-winning pop art, creating a referential universe unto itself, forcing a cultural dialogue on violence, and elbowing its way past the overwhelmingly genteel fare of American arthouses. It also spawned countless imitators (2 Days In The Valley, anyone? Things To Do In Denver When You’re Dead? Bueller? Bueller?), but Tarantino’s confident bravado as writer and director proved impossible to replicate, as did his elegant structuring of three interconnected stories that function together and apart. It almost seems incidental that he also happened to revive the career of the one of the ’70s’ biggest stars, John Travolta, who reclaimed his cool as a hitman who takes his boss’ wife (Uma Thurman) on one wild night on the town. The other two stories—the first about a boxer (Bruce Willis) who opts against throwing a fight, the second about Travolta and his partner (Samuel L. Jackson) disposing of a body—fold into a sprawling vision informed equally by Tarantino’s affection for sordid exploitation films and the playful avant-garde impulses of Jean-Luc Godard. And has there been another ’90s film so replete with future cultural touchstones? The dance scene at Jack Rabbit Slim’s, the exchange about the French McDonald’s and its “Royale with cheese,” the “gold watch” monologue, the adrenaline shot, Zed and “the gimp” in the pawn-shop basement. The “cinema of cool” has no greater avatar.
1. Goodfellas (1990)
If a film’s ability to remain as thrilling on the 15th viewing as on its first were reason enough to top this list, Goodfellas would have no competition. Yet as entertaining as the film remains each time around, every return trip also reveals how much is at work in Martin Scorsese’s decades-spanning mob drama, which doubles as a history of the mafia’s rise and fall as well as an exploration of what it takes to make it in America. Adapted from a book by journalist Nicholas Pileggi, Goodfellas recounts the true story of mobster-turned-informant Henry Hill, who begins the film as a starry-eyed kid who sees the local tough guys as celebrities and ends it in suburban exile, far from the glamorous aspirations of his youth. But, for a while, he gets to live the fantasy of having it all for nothing. Played as a grown-up by Ray Liotta, Hill falls in with a crew that includes Robert De Niro (effective in a flashless performance) and hothead Joe Pesci. The easy life gets a little harder as the years roll by: Pesci’s hubris causes the crew to fall from favor, big scores sour, drugs enter the picture, the game gets rougher—and then there’s all that work to be done, and someone has to find time to braise the beef and veal for the sauce and stir it so it doesn’t stick.
Purely as a piece of filmmaking, it’s a breathtaking work, filled with stunning sequences that have the look and feel of movies unto themselves. (In subsequent years, filmmakers have borrowed liberally from its most famous stretches: the long Copacabana take, the jittery editing of the coked-out climax, Pesci’s seeming offense at being considered a clown, and so on.) Scorsese masterfully weaves the film’s disparate elements into a single, cohesive story of desire and its consequences, a tale of those who dream big dreams and don’t mind stepping on some heads to make the dreams come true. It’s a morality tale without over-moralizing that seduces viewers into sharing Hill’s fantasy of a life without consequences, and then lets a hammer shatter his world into pieces.
Next: The list of orphans and outliers, where the cinema writers each champion four of their favorite films that didn’t get enough votes to make the master list. Read our first 20 films here and our second 20 films here. Listen to what we have to say about how the decade changed cinema here, and see the '90s films we hate the most here. | The AV Club counted down the top 50 movies of the 1990s this week, with Goodfellas coming out on top. It doesn't just hold up after more than a decade, it keeps getting better. "Every return trip also reveals how much is at work in Martin Scorsese's decades-spanning mob drama, which doubles as a history of the mafia’s rise and fall as well as an exploration of what it takes to make it in America." The top five: Goodfellas (1990): "Breathtaking." Pulp Fiction (1994): Quentin Tarantino's film "changed everything" and spawned countless imitators. Toy Story 2 (1999): "A rare case of a sequel improving on the original." Dazed And Confused (1993): Richard Linklater's film offers way more than just '70s nostalgia. Chungking Express (1994): Nothing rivals it in terms of "sheer sensuality." Read the full top 10 here, and get the rest of the top 50 in two takes here and here. |
Modernizing tax processing is key to IRS’ vision of a virtually paper-free work environment in which taxpayer information is readily available to IRS employees to update taxpayer accounts and respond to taxpayer inquiries. In our July 1995 report, we emphasized the need for IRS to have in place sound management and technical practices to increase the likelihood that TSM’s objectives will be cost-effectively and expeditiously met. A 1996 National Research Council report on TSM has a similar message. Its recommendations parallel the recommendations we made involving IRS’ (1) business strategy to reduce reliance on paper, (2) strategic information management practices, (3) software development capabilities, (4) technical infrastructures, and (5) organizational controls. The Treasury, Postal Service and General Government Appropriations Act, 1996 “fences” $100 million in TSM funding for fiscal year 1996 until the Secretary of the Treasury reports to the Senate and House Appropriations Committees on the progress IRS has made in responding to our recommendations with a schedule for successfully mitigating deficiencies we reported. The conference report on the act directed that GAO assess for the Committee the status of IRS’ corrective actions. As of March 22, 1996, the Secretary of the Treasury had not submitted a report responding to our recommendations to the Committees. In our July report, we analyzed IRS’ strategic information management practices, drawing heavily from our research on the best practices of private and public sector organizations that have been successful in improving their performance through strategic information management and technology. These fundamental best practices are discussed in our report Executive Guide: Improving Mission Performance Through Strategic Information Management and Technology (GAO/AIMD-94-115, May 1994), and our Strategic Information Management (SIM) Self-Assessment Toolkit (GAO/Version 1.0, October 28, 1994, exposure draft). In this regard, our work in this area has been of particular interest to this Committee in its recent efforts to reauthorize the Paperwork Reduction Act and initiate the Information Technology Management Reform Act to require federal agencies to use these modern management practices to improve the federal government’s efforts to successfully use information technology to enhance its performance and reduce costs. To evaluate IRS’ software development capability, we validated IRS’ August 1993 assessment of its software development maturity based on the Capability Maturity Model (CMM) developed in 1984 by Carnegie Mellon University’s Software Engineering Institute, a nationally recognized authority in the area. This model establishes standards in key software development processing areas (i.e., requirements management, project planning, project tracking and oversight, configuration management, quality assurance, and subcontractor management) and provides a framework to evaluate a software organization’s capability to consistently and predictably produce high-quality products. When we briefed the IRS Commissioner in April 1995 and issued our report documenting its weaknesses in July 1995, IRS agreed with our recommendations to make corrections expeditiously. At that time, we considered IRS’ response to be a commitment to correct its management and technical weaknesses. In September 1995, IRS submitted an action plan to the Congress explaining how it planned to address our recommendations. However, this plan, follow-up meetings with senior IRS officials, and other draft and “preliminary draft” documents received through early March 1996 have provided little tangible evidence that actions being taken will correct the pervasive management and technical weaknesses that continue to place TSM, and the huge investment it represents, at risk. Our ongoing assessment has found that IRS has initiated a number of activities and made some progress in addressing our recommendations to improve management of information systems; enhance its software development capability; and better define, perform, and manage TSM’s technical activities. However, none of these steps has fully satisfied any of our recommendations. Consequently, IRS today is not in an appreciably better position than it was a year ago to ensure the Congress that it will spend its 1996 and future TSM appropriations judiciously and effectively. We reported that IRS was drowning in paper—a serious problem IRS can mitigate only through electronic tax filings. We noted that IRS would not achieve the full benefits that electronic filing can provide because it did not have a comprehensive business strategy to reach or exceed its electronic filing goal, which was 80 million electronic filings by 2001. IRS’ estimates and projections for individual and business returns suggested that, by 2001, as few as 39 million returns may be submitted electronically, less than half of IRS’ goal and only about 17 percent of all returns expected to be filed. We reported that IRS’ business strategy would not maximize electronic filings because it primarily targeted taxpayers who use a third party to prepare and/or transmit simple returns, are willing to pay a fee to file their returns electronically, and are expecting refunds. Focusing on this limited taxpaying population overlooked most taxpayers, including those who prepare their own tax returns using personal computers, have more complicated returns, owe tax balances, and/or are not willing to pay a fee to a third party to file a return electronically. We concluded that, without a strategy that also targets these taxpayers, IRS would not meet its electronic filing goals or realize its paperless tax processing vision. In addition, if, in the future, taxpayers file more paper returns than IRS expects, added stress will be placed on IRS’ paper-based systems. Accordingly, we recommended that IRS refocus its electronic filing business strategy to target, through aggressive marketing and education, those sectors of the taxpaying population that can file electronically most cost-beneficially. IRS agreed with this recommendation and said that it had convened a working group to develop a detailed, comprehensive strategy to broaden public access to electronic filing, while also providing more incentives for practitioners and the public to file electronically. It said that the strategy would include approaches for taxpayers who are unwilling to pay for tax preparer and transmitter services, who owe IRS for balances due, and/or who file complex tax returns. IRS said further that the strategy would address that segment of the taxpaying population that would prefer to file from home, using personal computers. Since then, IRS has performed an electronic filing marketing analysis at local levels; developed a marketing plan to promote electronic filing; consolidated 21 electronic filing initiatives into its Electronic Filing Strategies portfolio; and initiated a reengineering project to begin this month with a goal to reduce paper tax return filings to 20 percent or less of the total volume by 2000. These initiatives could result in future progress toward increasing electronic filings. However, these initiatives have yet to culminate in a comprehensive strategy that identifies how IRS plans to target those sectors of the taxpaying population that can file electronically most cost-beneficially, and what efforts it will make to develop requisite supporting systems. We reported that IRS did not have strategic information management practices in place. We found, for example, that, despite the billions of dollars at stake, information systems were not managed as investments. To overcome this, and provide the Congress with insight needed to assess IRS’ priorities and rationalization for TSM projects, we recommended that the IRS Commissioner take immediate action to implement a complete process for selecting, prioritizing, controlling, and evaluating the progress and performance of all major information systems investments, both new and ongoing, including explicit decision criteria, and using these criteria, to review all planned and ongoing systems investments by June 30, 1995. In agreeing with these recommendations, IRS said it would take a number of actions to provide the underpinning it needs for strategic information management. IRS said, for example, that it was developing and implementing a process to select, prioritize, control, and evaluate information technology investments to achieve reengineered program missions. Since then, IRS has taken steps towards putting into place a process for managing its extensive investments in information systems. For example, IRS has created the executive-level Investment Review Board for selecting, controlling, and evaluating all information technology investments; developed initial and revised sets of decision criteria that it used last summer to rank and prioritize TSM projects and used it in November 1995 to recommend additional changes to information systems resource allocations, respectively; developed its Investment Evaluation Handbook and Business Case Handbook to strengthen management decision-making on systems investments; and is using the Investment Evaluation Handbook to review operational TSM projects. Although these steps represent some progress in responding to our concerns, IRS has not demonstrated that it is following a well-defined, consistent, and repeatable information technology investment decision-making process for selecting, controlling, and evaluating its information technology initiatives and projects. In particular, working procedures, required decision documents, decision criteria, and reliable cost, benefit and return data needed for an investment process are not complete. IRS has not provided evidence to demonstrate how analyses are being conducted on all systems investments using such data as expected improvement in mission performance, costs to date, technical soundness, or pilot performance. Instead, IRS operates on the assumption that it will receive a specified funding ceiling for systems development and technology, and then determines how much funding can be eliminated from projects in order to lower overall modernization costs to that level. Over the last few months, we have communicated several concerns to IRS about weaknesses with its current investment process that continue to raise risks and erode confidence in the quality of decisions being made about TSM investments. These include: the absence of initial screening criteria to determine if IRS has developed sufficient data about an information technology project—such as benefit-cost analyses, proposed return-on-investment calculations, and an accepted return on investment threshold level used as a decisional cut-off point—in order for the investment review board to reach an informed funding decision; the lack of analysis and trade-offs being made among all proposed information technology investments as a single portfolio—such as spending on legacy, infrastructure, and proposed modernization projects—in order to fully justify a ranking and prioritization of modernization efforts; and the lack of mechanisms to assure that the results of IRS’ investment evaluation reviews, such as that recently completed on the Service Center Recognition/Image Processing System, are being used to modify selection and control decision-making processes or to change funding decisions for projects. We reported that unless IRS improves its software development capability, it is unlikely to build TSM timely or economically, and systems are unlikely to perform as intended. To assess its software capability, in September 1993, IRS rated itself using the Software Engineering Institute’s CMM. IRS found that, even though TSM is a world-class undertaking, its software development capability was immature. IRS placed its software development capability at the lowest level, described as ad hoc and sometimes chaotic and indicating significant weaknesses in its software development capability. Our review also found that IRS’ software development capability was immature and was weak in key process areas. For instance, a disciplined process to manage system requirements was not being applied to TSM systems, a software tool for planning and tracking development projects was not software quality assurance functions were not well defined or consistently systems and acceptance testing were neither well defined nor required, software configuration management was incomplete. To address IRS’ software development weaknesses and upgrade IRS’ software development capabilities, we recommended that the IRS Commissioner immediately require that all future contractors who develop software for the agency have a software development capability rating of at least CMM level 2, and before December 31, 1995, define, implement, and enforce a consistent set of requirements management procedures for all TSM projects that goes beyond IRS’ current request for information services process, and for software quality assurance, software configuration management, and project planning and tracking; and define and implement a set of software development metrics to measure software attributes related to business goals. IRS agreed with these recommendations and said that it was committed to developing consistent procedures addressing requirements management, software quality assurance, software configuration management, and project planning and tracking. Regarding metrics, IRS said that it was developing a comprehensive measurement plan to link process outputs to external requirements, corporate goals, and recognized industry standards. Specifically regarding the first recommendation, IRS has (1) developed standard wording for use in new and existing contracts that have a significant software development component, requiring that all software development be done by an organization that is at CMM Level 2, (2) developed a plan for achieving CMM Level 2 capability on all of its contracts, and (3) initiated plans for acquiring expertise for conducting CMM-based software capability evaluations of contractors and has designated personnel to perform these evaluations. We found, however, no evidence that all contractors developing software for the agency are being required to develop it at CMM Level 2. For example, our review of the Cyberfile electronic filing system being developed by NTIS and contractors found that the system was not being developed at CMM Level 2. With respect to the second recommendation, IRS is updating three software development lifecycle methodologies, developed a draft quality audit procedures handbook, updated its requirements management request for information services document, and developed and implemented a requirements management course. IRS also evaluated its current contractor management processes, compared these processes to the CMM goals, and is considering improvement activities. However, to progress towards CMM Level 2, IRS must do a better job to define and implement detailed procedures for the key process areas and allocate the necessary resources. Until this occurs, IRS software development projects will continue to be built using ad-hoc and chaotic processes that offer no assurance of successful delivery. Since our review IRS has also started a three-phase process to (1) identify data sources for metrics, (2) define metrics to be used, and (3) implement the metrics. According to IRS, although phase one has been completed, no metrics have been defined, and implementation is currently planned for sometime between June 1996 and January 1997. In this regard, although IRS has begun to act on our recommendations, systems are still being developed without the data and discipline needed to give management assurance that they will perform as intended. We reported that IRS’ systems architectures, integration planning, and system testing and test planning were incomplete. To address IRS’ technical infrastructure weaknesses, we recommended that the IRS Commissioner before December 31, 1995, complete an integrated systems architecture, including security, telecommunications, network management, and data management; institutionalize formal configuration management for all newly approved projects and upgrades and develop a plan to bring ongoing projects under formal configuration management; develop security concept of operations, disaster recovery, and contingency plans for the modernization vision and ensure that these requirements are addressed when developing information system projects; develop a testing and evaluation master plan for the modernization; establish an integration testing and control facility; and complete the modernization integration plan and ensure that projects are monitored for compliance with modernization architectures. IRS agreed with these recommendations and said that it was identifying the necessary actions to define and enforce systems development standards and architectures agencywide. IRS’ current efforts in this area follow: IRS is developing a “descriptive overview” of an integrated systems architecture, which, for example, includes a security architecture chapter. A draft of the descriptive overview is due in April 1996 and an executive summary is due in mid-March. IRS has developed and distributed a Configuration Management Plan template, which identifies the elements needed when constructing a configuration management plan, and established a charter for its Configuration Management branch. IRS has prepared a security concept of operations and a disaster recovery and contingency plan. IRS has developed a test and evaluation master plan for TSM. IRS is in the process of establishing an interim integration testing and control facility but has not determined an initial operating date. It is also planning a permanent integration testing and control facility, scheduled to be completed by the end of 1996. IRS has completed an informal draft of its TSM Release Definition Document and a draft of its Modernization Integration Plan. These activities start to address our recommendations. However, they do not fully satisfy any of our recommendations for the following reasons. First, IRS has not completed an integrated systems architecture (the “blueprints” of TSM), and no evidence has been provided to suggest that it will have one in the foreseeable future. The draft architecture documents received are high-level descriptions that fall far short of the level of detail needed to provide effective guidance in designing and building systems. For example, IRS’ concept of a three-tier, distributed architecture does not provide sufficient detail to understand the security requirements and implications. It does not, for instance, specify what security mechanisms are to be implemented between and among the three tiers to ensure that only properly authorized users are allowed to access tax processing application software and taxpayer data. Second, IRS has not brought its development, acceptance, and production environments under configuration management control. For example, there is no disciplined process for moving software from the test to the production environment. Third, our review of the security concept of operations found that the document does not identify selected security methods and techniques. For example, it discusses two methods for providing identification and authentication for controlling user access to various systems without specifying which method should be used. The security concept of operations is also sometimes inconsistent with the security mechanisms currently being implemented on systems now being developed and does not indicate how, when, or if these inconsistencies will be resolved. Fourth, IRS’ disaster recovery and contingency plan is a high-level document for planning that presents basic tenets for information technology disaster recovery but not the detail needed to provide guidance. For example, it does not explain the steps that computing centers need to take to absorb the workload of a center that suffers a disaster. Fifth, the test and evaluation master plan provides the guidance needed to ensure sufficient developmental and operational testing of TSM. However, it does not describe what security testing should be performed, or how these tests should be conducted. Further, it does not specify the responsibilities and processes for documenting, monitoring, and correcting testing and integration errors. Sixth, the plans for IRS’ integration testing and control facility are inadequate. The purpose of an off-line test site is to provide a safe, controlled environment for testing that realistically simulates the production environment. This permits new hardware and software to be thoroughly tested without putting IRS operations and service to taxpayers at risk. However, current plans for the facility do not provide for the testing of all IRS software prior to nationwide delivery. It is unclear why this position has been taken or how difficult and expensive it will be to make the modifications needed to enable the facility to effectively replicate its operational environment. Finally, IRS’ draft TSM Release Definition Document and Modernization Integration Plan have not been finalized. In addition, they (1) do not reflect TSM rescoping and the information systems reorganization under the Associate Commissioner, (2) do not provide clear and concise links to other key documents (e.g., its integrated systems architecture, business master plan, concept of operations, and budget), and (3) assume that IRS has critical processes in place that are not implemented (e.g., effective quality assurance and disciplined configuration management). We reported that IRS had not established an effective organizational structure to consistently manage and control systems modernization organizationwide. The accountability and responsibility for IRS’ systems development was spread among IRS’ Modernization Executive, Chief Information Officer, and research and development division. To help address this concern, in May 1995, the Modernization Executive was named Associate Commissioner. The Associate Commissioner was to manage and control systems development efforts previously conducted by the Modernization Executive and the Chief Information Officer. In September 1995, the Associate Commissioner for Modernization assumed responsibility for the formulation, allocation, and management of all information systems resources for both TSM and non-TSM expenditures. In February 1996, IRS issued a Memorandum of Understanding providing guidance for initiating and conducting technology research and for transitioning technology research initiatives into system development projects. It is important that IRS maintain an organizationwide focus to manage and control all new modernization systems and all upgrades and replacements of operational systems throughout IRS. To fully strengthen systems development accountability and responsibility, we recommended that the IRS Commissioner give the Associate Commissioner management and control responsibility for all systems development activities, including those of IRS’ research and development division. We are concerned that IRS still has not established an organizationwide focus to consistently manage and control information systems. Specifically, we have seen no evidence that systems development, upgrades, and replacements at IRS field locations are being controlled by the Associate Commissioner. Although the Associate Commissioner was given authority for the formulation, allocation, and management of all information systems resources for TSM and non-TSM systems, the research and development division still retains approval authority for initiating technology research projects and for conducting proof-of-concept systems prototypes. It is unclear whether the building processes and budget used for these systems development areas are controlled by the Associate Commissioner. Again, despite some improvements in consolidating management control over systems development, IRS still does not have a single entity with the responsibility and authority to control all of its information systems projects. IRS began developing Cyberfile in mid-1995 to allow taxpayers to prepare and electronically submit their tax returns using their personal computers without having to pay a transmission fee. NTIS through an interagency agreement with IRS is developing and planning to operate Cyberfile in a new NTIS data center. Cyberfile is planned to accept tax returns submitted via the public switch telephone network and the Internet. When tax returns are accepted by Cyberfile, they will be forwarded to designated IRS Service Centers. In December 1995, we briefed the IRS Commissioner on the risks associated with using Cyberfile. At that time, Cyberfile development was scheduled for limited operational use by a selected population of taxpayers in February 1996. Earlier this month, IRS decided to delay Cyberfile operations to an unspecified date after April 15, 1996. Our review of the Cyberfile development reflects many of the management and technical weaknesses we identified in our July 1995 report. Specifically, Cyberfile is not being developed (1) using disciplined systems development processes and (2) to provide the security needed to protect taxpayer data. To increase the likelihood of successful systems development efforts, our July 1995 report recommended that IRS require that all systems procured from contractors be built using disciplined, repeatable CMM level 2 processes as defined by the Software Engineering Institute. Although IRS agreed with this recommendation, it did not stipulate these requirements for Cyberfile. As a result, by February 29, 1996, IRS had committed about $17 million to NTIS to acquire hardware, software, and telecommunications services for Cyberfile and NTIS had obligated $11.7 million, but the Cyberfile system development effort exhibited many of the same technical weaknesses that we found in TSM. Because IRS did not require that contractors use at least CMM level 2’s disciplined software development processes, there was little assurance that Cyberfile would perform as intended and would be delivered on time and within budget. Because these disciplined processes were not established for Cyberfile’s development, the following are examples of the weakness that occurred. (1) There is no formal process in place to define, manage, and control Cyberfile requirements. (2) Key planning documents, such as a detailed business plan, security architecture, and concept of operations, have not been completed. (3) IRS did not perform an alternatives analysis to identify various feasible solutions and their associated costs and benefits. (4) IRS did not perform a thorough risk analyses to determine the severity of vulnerabilities and the costs associated with mitigating these vulnerabilities. (5) We were provided no evidence that IRS followed our recommendation to use formal methods or tools to either estimate, plan, or track this TSM development activity. As a result, estimates of Cyberfile cost, performance, and schedule are not based on objective, explicit source data, established methodology, or documented rationale. In addition, we found that Cyberfile project planning was schedule, rather than event, driven. For example, IRS planned to make a decision on operating Cyberfile as early in this tax filing season as January 1996, even though key requirements and design prerequisites like a security policy, security architecture, test plans, and penetration testing had not yet been completed. IRS’ reasons for continuing plans to operate Cyberfile during the current tax filing season are unclear. A November 1995, market study performed for IRS projected that of an estimated 4 million taxpayers who would be eligible for the Cyberfile project, 10,000 to 25,000 taxpayers would likely have used Cyberfile if it had been operational throughout the current tax filing season. Because operations have been delayed beyond April 15, it is unclear what benefits IRS expects to be derived from rushing to operate Cyberfile this year. In this regard, IRS’ market study noted that past patterns of electronic filings have shown that, very few taxpayers file electronically after April 15. System security requirements provide systems developers with the “blueprints” needed to ensure that systems being developed will adequately protect the data and access to the data. Our July 1995 recommendations were intended to ensure that security requirements for sensitive systems like Cyberfile would be addressed. Federal Information Processing Standards define among other things, approved techniques that can be used to authenticate users and ensure data privacy, integrity, and nonrepudiation. In an April 1995 proposal from NTIS to IRS to conduct an analysis and feasibility study, these security requirements were identified at a conceptual level. However, subsequent system documentation and action taken did not address these issues in accordance with Federal Information Processing Standards. For instance, the April 1995 proposal cited the requirement for a digital signature, but succeeding documentation describes a system using a personal electronic filing number, which will not ensure data integrity or nonrepudiation. We were provided no documented rationale for these changes in requirements, or for other security related decisions, such as the choice of encryption approaches and security products like fire walls. On March 12, 1996, we toured and assessed Cyberfile’s data center, which according to data center management was scheduled to be operationally ready on March 19, 1996. Our review of 7 functional areas found that many controls, which should have been in place by this time to mitigate security-related risks, were not. Specifically, we reviewed (1) data center operations, (2) physical security, (3) data communications management, (4) disaster recovery, (5) contingency planning, (6) risk analysis, and (7) security awareness. We found weaknesses in all seven areas. Effective data center operations include strong operational security safeguards to assure the continuity of operations. We found 17 operational security weaknesses in a dusty construction environment that place the equipment at operational risk. The following are examples of these weaknesses. Large amounts of combustible materials were found adjacent to and inside the data center. Paper and cardboard trash was piled in adjacent areas, and boxes of envelopes were stacked in the data center. The data center’s fire extinguishers required recharging and were haphazardly placed in the center, increasing vulnerability to extensive fire damage. The center uses wet standpipe sprinklers for fire suppression in lower than normal ceilings. Taller individuals in the center have to duck to avoid hitting the sprinklers, which, if inadvertently sheared off, will release water that can damage the center. The data center is located on the subbasement level of a building and does not have water detectors under the raised floor, increasing the risk of extensive electrical damage to computer equipment if the center floods. Physical security and access control measures, such as locks, guards, and surveillance cameras are critical to safeguarding data and operations from internal and external threats. At the data center we found 14 physical security weaknesses, including the following. The lock on the main door to the data center was improperly installed, exposing the mechanism and permitting unauthorized access by just flipping the latch with a finger. All doors to the data had unsecured hinges on the outside, allowing easy removal of doors to permit unauthorized entrance to the data center. Multiple exit doors were not alarmed or monitored by security cameras, thereby allowing exit and entrance without detection. Packages and other personal articles were not inspected before being allowed in the data center, increasing internal security threats. This leaves the center vulnerable to physical attack from concealed weapons, as well as technical attack. For example, malicious software could be brought in to introduce viruses. Electronic card key devices installed on doors in an environment without guards or cameras do not limit access to authorized personnel only. Unauthorized personnel can follow cardholders into the center and pose a threat to the equipment and taxpayer data. Data communications management is the function of monitoring and controlling communications networks to ensure that they operate as intended, transmitting timely, accurate, and reliable data in a secure fashion to and from taxpayers. We found 10 communications management weaknesses at Cyberfile’s data center. For example, telecommunications equipment such as telecommunication switches and patch panels was not physically protected and could be accessed and damaged by unauthorized personnel. Additionally, communications devices intended to be used only to monitor data flow can also be used to alter data and for browsing. Effective disaster recovery plans and procedures enable organizations to continue operations or to reestablish operations in a backup facility after disruptions caused by events such as earthquakes, floods, fires, and electrical power failures. Cyberfile does not have a backup computer facility, nor does it have alternate power sources to maintain computer operations during a power outages. Contingency planning provides specific procedures that need to be taken during various emergencies to restore critical operations and identifies the key individuals responsible for carrying out the procedures. While NTIS has a draft contingency plan that provides some high level instructions on maintaining continuous Cyberfile system operations, the draft does not have specific procedures to be followed in an emergency nor does it identify the key individuals responsible for carrying them out. A risk analysis identifies and determines the severity of security threats and, for each threat, formulates safeguards, and estimates their cost. The risk analysis conducted for Cyberfile was incomplete and did not adequately address physical, operational, and communications security threats to the data center. For example, the analysis does not address the threat of data center employees compromising taxpayer data. Without a comprehensive risk analysis, system vulnerabilities may not be identified and cost effective controls may not be implemented to mitigate them. A security awareness program communicates to employees the importance of security measures and emphasizes their responsibility for protecting assets. We found that there was no security awareness program for Cyberfile. During our review, we found a note, written on a white board in the data center, instructing employees to handoff passwords to employees on the next shift. Because employees share passwords, system and data accesses and the use of system resources cannot be traced to individuals, and, therefore, cannot be effectively controlled. Our review of the acquisition process raised several issues that warrant further explanation by IRS or NTIS. In this regard, we plan to review these issues during our continuing review of Cyberfile. NTIS implemented its interagency agreement with IRS chiefly through means of a contract awarded to a contractor under the “Section 8(a)” program. The “Section 8(a)” program permits the award of a contract to the Small Business Administration, which then subcontracts with a firm owned by economically and socially disadvantaged individuals. This type of contract can be awarded with limited or no competition. In this case, NTIS awarded a contract under “Section 8(a)” on a sole source basis. The selected contractor then subcontracted a significant part of its work to other firms. Information obtained indicates that the selection of some of these subcontractors may have been directed by NTIS or IRS. These actions may have resulted in the complete elimination of competition for a significant amount of government business. Also, numerous actions were conducted quickly and information obtained to date does not provide a clear understanding of what transpired. For example, in rushing to implement Cyberfile, it appears that IRS contracted for services that NTIS was tasked with providing under their interagency agreement. In addition, procurement officials at both IRS and Commerce told us that they believe they followed procurement rules, but said they received instructions from superiors to proceed with various contracting actions, in some cases without the government receiving the benefit of the traditional independent judgment accorded contracting officials. In this regard, we identified over $2 million in 33 purchases where exemptions to normal purchasing requirements were justified based on 41 U.S.C. 253(c)(2), which states the following. “The executive agency’s need for the property or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the executive agency is permitted to limit the number of sources from which it solicits bids or proposals;” Our preliminary review of these purchases raises issues concerning the urgency and appropriateness of some of these purchases. For example, four cellular phones were purchased in August 1995, at $1,099 each to provide 24-hour accessibility to key personnel who operate Cyberfile. However, Cyberfile is still not operational and documentation obtained from NTIS indicates that $842 was spent in August and September 1995 on usage charges—with no clear indication on subsequent usage charges. Similar purchases were made for three nationwide pagers costing about $175 each, with documentation indicating that over $4,100 has been budgeted for pager services in 1996. However, as we mentioned earlier more work is needed to assess the appropriateness of all such actions. Our fiscal year 1994 financial audit of IRS, entitled Financial Audit: Examination of IRS’ Fiscal Year 1994 Financial Statements (GAO/AIMD-95-141, August 4, 1995), (1) highlighted a number of serious managerial problems that IRS must directly address to make greater progress in this area, (2) discussed actions being taken by IRS to strengthen its operations, and (3) presented numerous specific GAO recommendations for needed additional improvements. IRS agreed with all our recommendations and committed itself to taking the corrective measures necessary to improve its financial management operations. We currently are in the process of auditing IRS’ fiscal year 1995 financial statements. For the last 3 fiscal years, we have been unable to express an opinion on IRS’ financial statements because of the pervasive nature of its financial management problems. We were unable to express an opinion on IRS’ financial statements for fiscal year 1994 for the following five primary reasons. One, the amount of total revenue of $1.3 trillion reported in the financial statements could not be verified or reconciled to accounting records maintained for individual taxpayers in the aggregate. Two, amounts reported for various types of taxes collected, for example, social security, income, and excise taxes, could also not be substantiated. Three, we could not determine from our testing of IRS’ gross and net accounts receivable estimates of over $69 billion and $35 billion, respectively, which include delinquent taxes, whether those estimates were reliable. Four, IRS continued to be unable to reconcile its Fund Balance With Treasury accounts. Five, we could not substantiate a significant portion of IRS’ $2.1 billion in nonpayroll expenses included in its total operating expenses of $7.2 billion, primarily because of lack of documentation. However, we could verify that IRS properly accounted for and reported its $5.1 billion of payroll expenses. To help IRS resolve these issues, we have made dozens of recommendations in our financial audit reports dating back to fiscal year 1992. In total, we have made 59 recommendations on issues covering such areas as tax revenue, administrative costs, and accounts receivable. While IRS has begun to take action on many of our recommendations, as of the date of our last report—August 4, 1995—it had fully implemented only 13 of our 59 recommendations. IRS has made some progress in responding to the problems we identified in our previous audits. However, IRS needs to intensify its efforts in this area. In a September 12, 1994, letter to the Commissioner, we explained that IRS needed to develop a detailed plan with explicit, measurable goals and a set timetable for action, to attain the level of financial reporting and controls needed to effectively manage its massive operations and to reliably measure its performance. On March 21, 1996, we received a copy of that plan and are now reviewing it. The sections below discuss these issues in greater detail. IRS’ financial statement amounts for revenue, in total and by type of tax, were not derived from its revenue general ledger accounting system (RACS) or its master files of detailed individual taxpayer records. This is because RACS did not contain detailed information by type of tax, such as individual income tax or corporate tax, and the master file cannot summarize the taxpayer information needed to support the amounts identified in RACS. As a result, IRS relied on alternative sources, such as Treasury schedules, to obtain the summary total by type of tax needed for its financial statement presentation. IRS asserts that the Treasury amounts were derived from IRS records; however, neither IRS nor Treasury’s records maintained any detailed information that we could test to verify the accuracy of these figures. As a result, to substantiate the Treasury figures, we attempted to reconcile IRS’ master files—the only detailed records available of tax revenue collected—with the Treasury records. We found that IRS’ reported total of $1.3 trillion for revenue collections, which was taken from Treasury schedules, was $10.4 billion more than what was recorded in IRS’ master files. Because IRS was unable to satisfactorily explain, and we could not determine the reasons for this difference, the full magnitude of the discrepancy remains uncertain. In addition to the difference in total revenues collected, we also found large discrepancies between information in IRS’ master files and the Treasury data used for the various types of taxes reported in IRS’ financial statements. Some of the larger reported amounts for which IRS had insufficient support were $615 billion in individual taxes collected—this amount was $10.8 billion more than what was recorded in IRS’ master files; $433 billion in social insurance taxes (FICA) collected—this amount was $5 billion less than what was recorded in IRS’ master files; and $148 billion in corporate income taxes—this amount was $6.6 billion more than what was recorded in IRS’ master files. Thus, IRS did not know and we could not determine if the reported amounts were correct. These discrepancies also further reduce our confidence in the accuracy of the amount of total revenues collected. Despite these problems, we were able to verify that IRS’ reported total revenue collections of $1.3 trillion agreed with tax collection amounts deposited at the Department of the Treasury. However, we did find $239 million of tax collections recorded in IRS’ RACS general ledger that were not included in reported tax collections derived from Treasury data. In addition to these problems, we could not determine from our testing the reliability of IRS’ projected estimate for accounts receivable. As of September 30, 1994, IRS reported an estimate of valid receivables of $69.2 billion, of which $35 billion was deemed collectible. However, in our random statistical sample of accounts receivable items IRS tested, we disagreed with IRS on the validity of 19 percent of the accounts receivable and the collectibility of 17 percent of them. Accordingly, we cannot verify the reasonableness of the accuracy of the reported accounts receivable. Inadequate internal controls, especially the lack of proper documentation of transactions, resulted in IRS continuing to report unsupported revenue information. In some cases, IRS did not maintain documentation to support reported balances. In other cases, it did not perform adequate analysis, such as reconciling taxpayer transactions to the general ledger, to ensure that reported information was reliable. We found several internal control problems that contributed to our inability to express an opinion on IRS’ financial statements. To illustrate, IRS was unable to provide adequate documentation for 111 items, or 68 percent, in our random sample of 163 transactions from IRS’ nonmaster file. The nonmaster file is a database of taxpayer transactions that cannot be processed by the two main master files or are in need of close scrutiny by IRS personnel. These transactions relate to tax years dating as far back as the 1960s. During fiscal year 1994, approximately 438,000 transactions valued at $7.3 billion were processed through the nonmaster file. Because of the age of many of these cases, the documentation is believed to have been destroyed or lost. We sampled 4,374 statistically projectable transactions posted to taxpayer accounts. However, IRS was unable to provide adequate documentation, such as a tax return, for 524 transactions, or 12 percent. Because the documentation was lost, physically destroyed or, by IRS policy, not maintained, some of the transactions supporting reported financial balances could not be substantiated, impairing IRS’ ability to research any discrepancies that occur. IRS is authorized to offset taxpayer refunds with certain debts due to IRS and other government agencies. Before refunds are generated, IRS policy requires that reviews be performed to determine if the taxpayer has any outstanding debts to be satisfied. For expedited refunds, IRS must manually review various master files to identify outstanding debts. However, out of 358 expedited refunds tested, we identified 10 expedited refunds totaling $173 million where there were outstanding tax debts of $10 million, but IRS did not offset the funds. Thus, funds owed could have been collected but were not. IRS could not provide documentation to support $6.5 billion in contingent liabilities reported as of September 30, 1994. Contingent liabilities represent taxpayer claims for refunds of assessed taxes which IRS management considers probable to be paid. These balances are generated from stand-alone systems, other than the master file, that are located in two separate IRS divisions. Because these divisions could not provide a listing of transactions for appropriate analysis, IRS did not know, and we could not determine, the reliability of these balances. An area that we identified where the lack of controls could increase the likelihood of loss of assets and possible fraud was in the reversal of refunds. Refunds are reversed when a check is undelivered to a taxpayer, an error is identified, or IRS stops the refund for further review. In many cases, these refunds are subsequently reissued. If the refund was not actually stopped by Treasury, the taxpayer may receive two refunds. In fiscal year 1994, IRS stopped 1.2 million refunds totaling $3.2 billion. For 183 of 244, or 75 percent of our sample of refund reversals, IRS was unable to provide support for who canceled the refund, why it was canceled, and whether Treasury stopped the refund check. Service center personnel informed us that they could determine by a code whether the refund was canceled by an internal IRS process or by the taxpayer, but, as a policy, no authorization support was required, nor did procedures exist requiring verification and documentation that the related refund was not paid. With regard to controls over the processing of returns, we also found weaknesses. During fiscal year 1994, IRS processed almost 1 billion information documents and 200 million returns. In most cases, IRS processed these returns correctly. However, we found instances where IRS’ mishandling of taxpayer information caused additional burden on the taxpayer and decreased IRS’ productivity. In many cases, the additional taxpayer burden resulted from IRS’ implementation of certain enforcement programs it uses to ensure taxpayer compliance, one of which is the matching program. This program’s problems in timely processing cause additional burden when taxpayers discover 15 months to almost 3 years after the fact that they have misreported their income and must pay additional taxes plus interest and penalties. IRS has made progress in accounting for its appropriated funds, but there were factors in this area that prevented us from being able to render an opinion. Specifically, IRS was unable to fully reconcile its Fund Balance with Treasury accounts, nor could it substantiate a significant portion of its $2.1 billion in nonpayroll expenses—included in its $7.2 billion of operating expenses—primarily because of lack of documentation. With regard to its Fund Balance With Treasury, we found that, at the end of fiscal year 1994, unreconciled cash differences netted to $76 million. After we brought this difference to the CFO’s attention, an additional $89 million in adjustments were made. These adjustments were attributed to accounting errors dating back as far as 1987 on which no significant action had been taken until our inquiry. IRS was researching the remaining $13 million in net differences to determine the reasons for them. These net differences, which span an 8-year period, although a large portion date from 1994, consisted of $661 million of increases and $674 million of decreases. IRS did not know and we could not determine the financial statement impact or what other problems may become evident if these accounts were properly reconciled. To deal with its long-standing problems in reconciling its Fund Balance with Treasury accounts, during fiscal year 1994, IRS made over $1.5 billion in unsupported adjustments (it wrote off these amounts) that increased cash by $784 million and decreased cash by $754 million, netting to $30 million. In addition, $44 million of unidentified cash transactions were cleared from cash suspense accounts and included in current year expense accounts because IRS could not determine the cause of the cash differences. These differences suggest that IRS did not have proper controls over cash disbursements as well as cash receipts. In addition to its reconciliation problems, we found numerous unsubstantiated amounts. These unsubstantiated amounts occurred because IRS did not have support for when and if certain goods or services were received and, in other instances, IRS had no support at all for the reported expense amount. These unsubstantiated amounts represented about 18 percent of IRS’ $2.1 billion in total nonpayroll expenses and about 5 percent of IRS’ $7.2 billion in total operating expenses. Most of IRS’ $2.1 billion in nonpayroll related expenses are derived from interagency agreements with other federal agencies to provide goods and services in support of IRS’ operations. For example, IRS purchases printing services from the Government Printing Office; phone services, rental space, and motor vehicles from the General Services Administration; and photocopying and records storage from the National Archives and Records Administration. Not having proper support for if and when goods and services are received made IRS vulnerable to receiving inappropriate interagency charges and other misstatements of its reported operating expenses, without detection. Not knowing if and/or when these items were purchased seriously undermines any effort to provide reliable, consistent cost or performance information on IRS’ operations. As a result of these unsubstantiated amounts, IRS has no idea and we could not determine, when and, in some instances, if the goods or services included in its reported operating expenses were correct or received. In our prior year reports, we stated that IRS’ computer security environment was inadequate. Our fiscal year 1994 audit found that IRS had made some progress in addressing and initiating actions to resolve prior years’ computer security issues; however, some of the fundamental security weaknesses we previously identified continued to exist in fiscal year 1994. These weaknesses were primarily IRS’ employees’ capacity to make unauthorized transactions and activities without detection. IRS has taken some actions to restrict account access, review and monitor user profiles, provide an automated tool to analyze computer usage, and install security resources. However, we found that IRS still lacked sufficient safeguards to prevent or detect unauthorized browsing of taxpayer information and to prevent staff from changing certain computer programs to make unauthorized transactions without detection. The deficiencies in financial management and internal controls that I have discussed throughout this testimony demonstrate the long-standing, pervasive nature of the weaknesses in IRS’ systems and operations—weaknesses which contributed to our inability to express a more positive opinion on IRS’ financial statements. The erroneous amounts discussed would not likely have been identified if IRS’ financial statements had not been subject to audit. Further, the errors and unsubstantiated amounts highlighted throughout this testimony suggest that information IRS provides during the year is vulnerable to errors and uncertainties as to its completeness and that reported amounts may not be representative of IRS’ actual operations. IRS has made some progress in responding to the problems we have identified in previous reports. It has acknowledged these problems, and the Commissioner has committed to resolving them. These actions represent a good start in IRS’ efforts to more fully account for its operating expenses. For example, IRS has successfully implemented a financial management system for its appropriated funds to account for its day-to-day operations, which should help IRS to correct some of its past transaction processing problems that diminished the accuracy and reliability of its cost information; and successfully transferred its payroll processing to the Department of Agriculture’s National Finance Center and, as a result, properly accounted for and reported its $5.1 billion of payroll expenses for fiscal year 1994. IRS is working on improving the process of reconciling and monitoring its funds. In this regard, it has created a unit whose sole responsibility is to resolve all cash reconciliation issues and retained a contractor to help with this process. In the area of receipt and acceptance, IRS stated that it is more fully integrating its budgetary and management control systems. Also, IRS has developed a methodology to differentiate between financial receivables and compliance assessments and has modified current systems to provide financial management information. Finally, IRS is in the process of identifying methods to ensure the accuracy of balances reported in its custodial receipt accounts. We are currently reviewing these actions as well as the action plan we received from IRS on March 21, 1996. This concludes my statement. I would be happy to answer any questions you or other members of the Committee may have at this time. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) Tax Systems Modernization (TSM) plan, focusing on IRS efforts to correct: (1) management and technical weaknesses that have impeded TSM; and (2) analogous technical weaknesses in its Cyberfile initiative. GAO found that: (1) although IRS has enhanced its software development capability and better defined TSM performance and management activities, it is unable to assure Congress that it can spend its 1996 and future TSM appropriations judiciously and effectively; (2) IRS has performed an electronic filing marketing analysis at the local level, developed a marketing plan to promote electronic filing, consolidated 21 electronic filing initiatives into its Electronic Filing Strategies portfolio, and initiated a project to reduce paper tax return filings by 20 percent in 2000; (3) IRS has created an executive-level investment review board to select, control, and evaluate information technology investments, and developed an investment evaluation handbook and business case handbook to strengthen management's decisionmaking concerning system investments; (4) IRS has standardized new and existing contracts and initiated plans to acquire expertise in software capability evaluations; (5) Cyberfile does not use disciplined systems development processes or provide taxpayers with data confidentiality; and (6) because IRS Cyberfile project planning is schedule driven, security policies, security architecture, and testing plans cannot be made. |
Sarkozy Opens Poll Lead After France Shootings
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President Nicolas Sarkozy has surged into the lead in election opinion polls following his handling of the crisis in Toulouse where a gunman is under siege suspected of killing of seven people.
The first survey since Monday's killings predicted Mr Sarkozy would narrowly beat his Socialist challenger in the first round of a presidential election next month.
The poll of 1,000 people, carried out on Monday and Tuesday, put Mr Sarkozy on 30% in the first round and Francois Hollande on 28%.
However, it showed Mr Hollande would win a second-round run-off by a margin of 8%.
The two rivals were neck and neck a week ago.
:: France Shootings - See The Latest
Until now Mr Hollande has enjoyed a large lead over the president, whose economic record and showy style left many voters dissatisfied.
However, Mr Sarkozy's response to Monday's shootings seems to have improved his image.
The rivals suspended their campaigns after three children and a rabbi were shot dead at a Jewish school in Toulouse in southwest France, killings that followed the shooting dead of three soldiers earlier this month.
Suspected gunman Mohammed Merah
The shootings, allegedly by 24-year-old Muslim Mohammed Merah in the name of al Qaeda, have allowed the French president to play his preferred role of protector-in-chief and put a new focus on security, traditionally a strong point.
He has repeatedly appeared on national television giving information on the manhunt and presiding over a ceremony for the fallen soldiers, while Mr Hollande has had little choice but to remain on the sidelines.
Meanwhile, far right presidential candidate Marine Le Pen, who is number three in the polls, says her anti-Islam agenda has been vindicated because the chief suspect in the country's worst killing spree in years is a French Muslim who claims ties to al Qaeda.
France, she says, must "wipe out" the Islamist threat, arguing it is corrupting the French culture and has not been taken seriously enough by the authorities. ||||| The French interior minister says the suspect in a three-attack killing spree has died after jumping from his apartment window, arm in hand.
A woman speaks with a police officer near a building where the chief suspect in an al-Qaida-linked killing spree is holed up in an apartment in Toulouse, France Thursday March 22, 2012. Mohamed Merah... (Associated Press)
Police officers and firefighter stand next to an apartment building in Toulouse, France, early Thursday, March 22, 2012, where Mohamed Merah, a suspect in the shooting at he Ozar Hatorah Jewish school,... (Associated Press)
This undated and unlocated frame grab provided Wednesday, March 21, 2012, by French TV station France 2 shows Mohammad Merah, the suspect in the killing of 3 paratroopers, 3 children and a rabbi in recent... (Associated Press)
This undated and unlocated frame grab provided Wednesday, March 21, 2012, by French TV station France 2 shows the suspect in the killing of 3 paratroopers, 3 children and a rabbi in recent days, Mohamed... (Associated Press)
French President Nicolas Sarkozy stands by soldiers carrying a coffin during a ceremony to pay homage to the three soldiers killed by a suspect an Interior Ministry official identified as Mohammad Merah,... (Associated Press)
Journalists stand at night next to an apartment building where Mohamed Merah, a suspect in the shooting at the Ozar Hatorah Jewish school, is still barricaded in Toulouse, southern France, Thursday, March... (Associated Press)
A woman and children are escorted by a police officer near a building where the chief suspect in an al-Qaida-linked killing spree is holed up in an apartment in Toulouse, France Thursday March 22, 2012.... (Associated Press)
Claude Gueant says the suspect, who claims links to al-Qaida, jumped after police entered the apartment and found him holed up in the bathroom. Police and the suspect exchanged fire before Mohamed Merah died.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
TOULOUSE, France (AP) _ A police official says that the suspect in a three-attack killing spree who claims links to al-Qaida is dead.
The official, Didier Martinez of the Unite SGP police union, says the news was announced Thursday on the police radio shortly after a 5-minute volley of gunfire. It was not immediately known exactly how Mohamed Merah, 24, died. ||||| A police official says that the suspect in a three-attack killing spree who claims links to al-Qaida is dead.
A woman speaks with a police officer near a building where the chief suspect in an al-Qaida-linked killing spree is holed up in an apartment in Toulouse, France Thursday March 22, 2012. Mohamed Merah... (Associated Press)
Police officers and firefighter stand next to an apartment building in Toulouse, France, early Thursday, March 22, 2012, where Mohamed Merah, a suspect in the shooting at he Ozar Hatorah Jewish school,... (Associated Press)
This undated and unlocated frame grab provided Wednesday, March 21, 2012, by French TV station France 2 shows Mohammad Merah, the suspect in the killing of 3 paratroopers, 3 children and a rabbi in recent... (Associated Press)
This undated and unlocated frame grab provided Wednesday, March 21, 2012, by French TV station France 2 shows the suspect in the killing of 3 paratroopers, 3 children and a rabbi in recent days, Mohamed... (Associated Press)
French President Nicolas Sarkozy stands by soldiers carrying a coffin during a ceremony to pay homage to the three soldiers killed by a suspect an Interior Ministry official identified as Mohammad Merah,... (Associated Press)
Journalists stand at night next to an apartment building where Mohamed Merah, a suspect in the shooting at the Ozar Hatorah Jewish school, is still barricaded in Toulouse, southern France, Thursday, March... (Associated Press)
A woman and children are escorted by a police officer near a building where the chief suspect in an al-Qaida-linked killing spree is holed up in an apartment in Toulouse, France Thursday March 22, 2012.... (Associated Press)
The official, Didier Martinez of the Unite SGP police union, says the news was announced Thursday on the police radio shortly after a 5-minute volley of gunfire. It was not immediately known exactly how Mohamed Merah, 24, died.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
TOULOUSE, France (AP) _ Loud explosions and sustained gunfire have been heard in Toulouse near the apartment where an Islamic extremist has been holed up in a 32-hour standoff with French police.
There was no way of immediately knowing whether the shooting was coming from the special police to intimidate the suspect or in an exchange volley with him.
The suspect, 24-year-old Mohamed Merah, has boasted of killing seven French citizens _ a rabbi, three Jewish children and three French paratroopers in an attempt to "bring France to its knees." They are believed to be the first killings inspired by Islamic radical motives in France in more than a decade.
Authorities said Merah, a French citizen of Algerian descent, espoused a radical form of Islam and had been to Afghanistan and the Pakistani militant stronghold of Waziristan, where he claimed to have received training from al-Qaida.
France's interior minister has said police wanted to capture him alive.
Elite police squads set off sporadic blasts throughout the night and into the morning _ some blew off the apartment's shutters _ in what officials described as a tactic aimed to pressure 24-year-old Merah to give up.
A new set of detonations, known as flash bangs, resounded at about 10:30 a.m. (0930 GMT).
Police were using their advantages _ numbers, firepower and psychological pressure _ in hopes of wearing down Merah, who has had no water, electricity, gas or most likely sleep, and perhaps no food, since the early hours of Wednesday.
Holed up alone in an otherwise evacuated apartment building, Merah clung to his few remaining assets, like a small arsenal and authorities' hopes of taking him alive. He appeared to toy with police negotiators _ first saying he would surrender in the afternoon, then under the cover of darkness, then reneging on those pledges altogether, officials said.
"We still want him alive so he can be tried and so the families can mourn properly," Foreign Minister Alain Juppe said on Europe 1 radio.
They said he told negotiators he killed a rabbi and three young children at a Jewish school on Monday and three French paratroopers last week to avenge the deaths of Palestinian children and to protest the French army's involvement in Afghanistan, as well as a government ban last year on face-covering Islamic veils.
French authorities _ like others across Europe _ have long been concerned about "lone-wolf" attacks by young, Internet-savvy militants who find radical beliefs online, since they are harder to find and track.
"Lone wolves are formidable adversaries," Gueant said.
He defended France's efforts to fight terrorism over the past decade, saying 700 people have been detained and about 60 "Islamists with terrorist tendencies" are currently in French prisons.
Merah's lawyer predicted a dramatic and somber end to the standoff.
"He wants to show he is exceptional, omnipotent, and this approach can only end up as something tragic," Christian Etelin said on news channel i-Tele on Thursday.
He said Merah had tried to join the military but was rejected. He said Merah was also disillusioned after a string of convictions for petty crimes and after efforts to reduce his sentences through work programs failed.
"He felt rejected by the periods of detention he was handed out, and for his wish to defend France in the army. Now, he is in a process of hate," Etelin said.
"He has no regrets, except not having more time to kill more people, and he boasts that he has brought France to its knees," prosecutor Francois Molins told a news conference Wednesday.
He said the suspect had plans to kill another soldier _ prompting the police raid at around 3 a.m. Wednesday. After it erupted into a firefight, wounding two police, a standoff ensued, with on-and-off negotiations with the suspect that lasted through the night.
___
Jamey Keaten in Paris contributed to this report. ||||| Toulouse Siege: Gunman Killed In Shootout
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A man suspected of murdering seven people in France has been killed by police as he jumped from a window still firing wildly at the end of a 32-hour siege.
Mohammed Merah, 23, was shot in the head after officers stormed his flat where he was holed up since early on Wednesday.
He filmed the three recent attacks in Toulouse and Montauban which claimed the lives of three Jewish schoolchildren, a rabbi, and three French soldiers, prosecutor Francois Molins said.
Mohammed Merah had been holed up in a flat in Toulouse
Merah claimed to have posted the videos online and police have viewed them.
It comes as al Qaeda linked group Jund al Khilafah, which has claimed responsibility for attacks in Afghanistan and Kazakhstan, said it was behind the shootings in France, according to US monitoring group SITE.
Merah staged a dramatic last stand as he burst out of a bathroom and blasted an automatic weapon at officers, before diving for the window while still shooting.
GRAPHIC: HOW THE SIEGE ENDED
The gunman, who reportedly told negotiators he wanted to "die with weapons in his hands", was found dead on the ground, according to French interior minister Claude Gueant, who watched the drama while peaking from behind an armoured vehicle outside the flat.
The police unit that carried out the raid "had never seen anything like it before," Mr Gueant said, confirming two officers were injured.
Final negotiations were unsuccessful late on Wednesday after Merah indicated he would not surrender and if there was any attempt to seize him he would kill police, according to the minister who ordered the final raid.
Officers entered the property in the southwestern city of Toulouse, creeping step-by-step around the flat, checking each room carefully before they reached the bathroom when Merah burst out, bombarding them with bullets.
Mr Gueant had earlier said police wanted to capture Merah alive.
A series of explosions, known as flash bangs, were heard at 10:30am (9:30am GMT), marking the beginning the end of the stand-off.
Police, who used special video equipment to search for Merah, had been concerned the property might have been booby-trapped.
Mr Gueant told reporters that Merah came out firing "with extreme violence". Police "tried to protect themselves and fired back".
"Mohammed Merah jumped out the window, gun in hand, continuing to fire. He was found dead on the ground," Mr Gueant added. Heavy gunfire was heard at the scene as the raid took place.
sustained gunfire as police move in on suspect
The building was surrounded by hundreds of police and Merah had been holed up in the flat since an earlier police assault on Wednesday.
Elite police squads had set off sporadic blasts overnight - some which blew off the flat's shutters - and cut off power to the evacuated building as they tried to persuade the suspect to give himself up. Gas supplies had reportedly been cut on Wednesday morning.
Street lights had also been turned off, making Merah more visible to officers with night vision goggles.
Criminologist Sebastian Roche said many questions now needed to be answered about the decision to move in. He told Sky News: "They intervene in the middle of the night, then they wait 30 hours, then there is a political decision to terminate this very clearly."
Mr Gueant earlier said: "We hope that he is still alive" so he could face justice, adding the gunman told negotiators he wanted to "die with weapons in his hands".
Mr Roche said: "The views of Mr Merah have prevailed over the views of the minister of the interior."
Explaining how politicians can control police tactics in France, he said: "The minister of the interior is the head of all police services… there is no notion of operational autonomy as you have in the UK."
Merah apparently boasted about carrying out the shootings in separate incidents in the past fortnight.
The suspect, a French citizen of Algerian descent, reportedly bragged to negotiators he was trained by al Qaeda on the Afghanistan-Pakistan border.
He was thought to be armed with a Kalashnikov assault rifle, a mini-Uzi submachine pistol and a collection of handguns and when police tried to storm his flat in the early hours of Wednesday, he was reported to have shouted "I can see you" and fired through the letterbox.
video of toulouse gunman suspect mohammed merah
Officers tried to negotiate with Merah who said he would surrender on Wednesday afternoon, then at night, and he ended up going back on those pledges altogether.
Mr Molins said the suspect boasted about bringing "France to its knees" and had planned to kill another soldier - prompting the first police raid.
The assault then erupted into a firefight with two police officers hurt as a stand-off developed.
Speaking before Merah's death, Mr Molins said: "He has no regrets, except not having more time to kill more people and he boasts that he has brought France to its knees."
Authorities said he had told negotiators he killed a rabbi and three young children at a Jewish school in Toulouse on Monday and three French paratroopers - one in Toulouse and two in Montauban - last week.
He claimed he carried out the shootings to avenge the deaths of Palestinian children and to protest against the French army's involvement in Afghanistan, as well as a government ban last year on face-covering Islamic veils, officials added.
French President Nicolas Sarkozy said authorities "tried everything to ensure he (Merah) was caught alive so he could come to trial but that was not possible".
Mr Sarkozy said an investigation was under way to see if the suspect had any accomplices.
He also said anyone who regularly visits "websites which support terrorism or call for hate or violence will be punished by the law".
And he promised a crackdown on anyone who goes abroad "for the purposes of indoctrination in terrorist ideology".
Mr Molins said the suspect had gone to the Afghanistan-Pakistan border region twice and on one occasion was arrested by Afghan police and handed over to US army troops, who put him on a flight back to France.
:: READ MORE - The Gunman's Trail Of Deadly Shootings
:: READ MORE - Behind The Scene At Police Stand-Off
:: READ MORE - A Profile Of Merah
:: READ MORE - Updates On The Siege, As It Happened
Video footage has emerged of Merah, and sources said the suspect had been known to the domestic security service for some years.
He had a police record for several minor offences, some involving violence, Mr Gueant told reporters, "but there was no evidence that he was planning such criminal actions".
A lawyer who defended Merah last month on charges of driving without a licence told French television that he had been "gentle" and "courteous" and that he had told him about his trip to Afghanistan.
The lawyer said he had pointed out to Merah that he would therefore, doubtless be under surveillance, and should not commit even the smallest infraction.
Police and prosecutors said they arrested Merah's mother, brother and his brother's girlfriend as part of the inquiry. | After a standoff of more than 32 hours, French shooting-spree suspect Mohamed Merah is dead, the AP reports. A police official confirms that Merah's death was announced today on police radio after five minutes of gunfire were heard; the French interior minister says Merah died after police entered his apartment and he shot at them, then jumped out the window with his weapon in his hand. Sky News reports that Merah was shooting "wildly" at officers as he jumped; at least two were injured in the standoff. The 24-year-old, who claimed to be linked to al-Qaeda, is suspected in three attacks in Toulouse that killed seven people: a rabbi and three children at a Jewish school as well as three paratroopers. President Nicolas Sarkozy's handling of the tragedy appears to be working in his favor: He's now in the lead in election opinion polling; not long ago, rival Francois Hollande was beating him handily, Sky News adds. |
Where have you been, Halle Berry?If one hadn't read the tabloids lately, one might be forgiven for thinking that the Oscar-winning actress had thrown in the towel. After all, she has not given a proper interview in three years, nor has she made a big commercial film since X-Men: The Last Stand, four years ago. Aside from her Revlon ads and a perfume launch for Coty, Berry has lain low by the 2010 standards of never-let-'em-see-you-rest celebrity. Except, of course, most of us do see the tabloids, where Berry appears nearly every single day. Which means you already know two things: that Berry gave birth to perhaps the cutest baby girl ever, Nahla, with her very good-looking boyfriend, Gabriel Aubry, in March 2008; and that Berry and Aubry split earlier this year, an event that was covered as if Michelle Obama had decided to take the kids and move back to Chicago.On a perfect day in June, Halle Berry and I are having lunch in the garden of Il Cielo, in Beverly Hills. She is wearing distressed jeans, a black sleeveless shirt, and a lot of silver jewelry made by a woman named Irit. "She is my new favorite thing," Berry says, "my biggest indulgence of this year." I start by asking her why she hasn't given an interview in so long. "I was burned-out with having other people tell the story about me that they wanted to tell. I told my publicist, 'I'm not going to talk anymore. I'm just going to live my life and be who I am.'"What is the biggest misperception of you? I ask."That I am this brooding, twisted, lovesick person who just can't get it right in life. Every story about me is so heavy and dramatic. That's not how I do life. But that's the impression people have, and that's what keeps getting reiterated. As if I'm still stuck in all the muck of the past. And I am so not."It's well known that Berry had been, prior to her silence, uncommonly frank about her trials and tribulations, her relationship troubles, and her difficult childhood. I wonder if she has any regrets. "No," she says. "I don't regret it. When you share like that, it helps a lot of people, it connects you to a lot of people, but I do think I should have the right to move on."The only reason she is submitting now, she says, is that Vogue made her an offer she couldn't refuse: the September cover. "What that means for a woman of color and what that means in the fashion world, what that means to pop culture, there was no way I could say, 'No, I'm not going to be on the biggest issue of the year.'"Berry decided to have me join her while she went about her life for a couple of days. Which is why one morning she picks me up at my hotel to see her personal trainer—the personal trainer (to the stars, the Lakers...), Gunnar Peterson, with whom she has been working out five days a week for the past year. At 44, she is obviously in extraordinary shape, toned and tan and tiny as ever—the most fit she has ever been in her life. She is wearing gray tights, a hot-pink tank top, and those funny-looking split-toe sneakers. Aside from the career requirements (Bond girl, superhero), Berry works out so much because she has diabetes, and she weaned herself off insulin a while back. "I do not love to work out," she says, "but if I stick to exercising every day and put the right things in my mouth, then my diabetes just stays in check." She probably sees Peterson more than most anyone else these days; they live on the same street in Beverly Hills, and they are also in the process of developing a unisex sports drink for GNC, something "sustainable and light and not a gimmick," she says.The workout is brutal. Gunnar has Berry lie on her back and attaches her ankles to a weighted pulley. Then he has her pull her knees to her chest, over and over again while she curses a blue streak. This, she says, is how she lost her post-baby "pouch." But this is also the exercise that caused her uppermost abdominal muscle to spasm a few times. "I went down," says Halle. "It was excruciating." Gunnar thought she was kidding the first time it happened. "I was laughing, but she kept going, and I thought, Wow, she is really committed to this little moment, staying in character." He chuckles and then says, "Another Oscar!"An hour and a half later, we are back in the car. Sitting between us is a green stuffed frog that clearly belongs to Nahla. "Best thing that ever happened to me." She smiles. "I'll tell you a story: I took her shopping, and I had that moment that every parent has," she says as she zips through the side streets of Beverly Hills. "You look away for a second and they're gone, and your body just gets all hot. And so I had a little breakdown. Shut the doors! I've lost my daughter! I look around and, sure enough, 30 seconds later, she pokes her head out: 'Hi, Mommy.' But it made me think: What if she really did get lost? Would she be able to say who she is? So that night, I said, 'What's your mommy's name?' And she looked at me like, You idiot. Why are you asking me what your name is? I asked her again: 'Nahla? What is Mommy's name?' She thought about it for a second, and finally she said, 'Halle Blueberries!' Blueberries are her favorite fruit." Berry laughs, still tickled. "I'm just glad she didn't say 'Halle Blackberry.'"That evening, I head to Malibu to Berry's weekend place, which is on a quiet gated lane that runs between the Pacific Coast Highway and the ocean. The house sits out over the surf—one of those big, white, modern boxes. When you walk in, all you see is an endless expanse of blue water.I am here for a dinner Berry is giving for a handful of friends and colleagues. There is something unusually intimate and yet oddly stilted about the scene. The dinner has been staged on my behalf (the chef, G. Garvin, is cooking up a storm in the kitchen), but everyone here is clearly close to Berry. Among the guests are the photographer Cliff Watts, one of Berry's best friends, who has shot her many times for magazine covers and Revlon ads; Patrick Delanty, the interior designer who decorated this house with Berry when she bought it seven years ago; and Karen Earl and Avis Frazier-Thomas, the executive director and the president of the board of directors of the Jenesse Center, the domestic violence-intervention organization with which Berry is very involved.Our hostess is wearing a long brown-and-white striped cotton tank dress. She is barefoot and wandering around with a glass of red wine in her hand, looking serene. The skin is a marvel: She does not look a day over 30. As hors d'oeuvres are being passed, I join Watts and Berry on the terrace. The two met when Watts photographed her for Interview magazine eleven years ago; they have been pals ever since. Indeed, her affectionate nickname for him is "Daddy." He asks her, "Why are you so tan? I've never seen you this dark." She explains, "I was at Disneyland with Nahla for twelve hours." Before she goes back to the kitchen to get more wine, she shoots me a look and then says sweetly, "You are the first writer I have ever let into my house."During dinner, at a long wooden table covered with candles, Halle makes a toast and then more formal introductions. She seems especially proud of Frazier-Thomas. The Jenesse Center provides, among other things, transitional housing—safe houses—for women and their children when they finally leave their abusive husbands or boyfriends. How did you get involved? I ask. It turns out that after her infamous car accident of 2000, in which she inexplicably left the scene, her sentence was, she says, "a $15,000 fine, three years' probation, and 250 hours" of community service. "They gave me a list of charities that I could choose from. I searched my heart for what would be meaningful to me. Domestic violence is important to me because I grew up with it; my mother was a victim of domestic violence. And I saw the Jenesse Center, the oldest domestic-violence center in South L.A., and I thought, That's where I want to go." What she didn't know was that she would wind up staying for nearly ten years. "Outside of being the mother of Nahla," she says, "it's the most meaningful thing that I do."After dinner, Berry takes me on a tour of the house, which is clearly an extension of her life, her personality. There are pictures of Nahla; her cats; her fifth-grade teacher, Yvonne Sims, "a mother figure" in Berry's life who remains one of her dearest friends. There is also surprising art: mostly modern painting and sculpture, a lot of it of a sexual nature. In her living room there is a very tall statue by Curt Brill of a naked woman looking out to sea. "I love the naked female form," she says. "I just feel like that's the most empowered position you can be in. She is standing tall in all her nakedness, and she is just commanding the room. Everything revolves around her in the house. I love it."We head down to the bedroom level, where there is more sculpture. One, in a hallway, is meant to be cheeky; it depicts the twelve astrological signs—but with couples in comic sexual positions. Berry looks for her sign, Leo. "I'm on top, baby!" she says, and laughs. Berry seems entirely comfortable with her sexuality. "That comes with age," she says. "I've been slowly getting there. If the world wouldn't persecute me, I'd take nude pictures every day of the week." Next thing you know, she picks up a small framed picture and hands it to me. It is a photograph of her, naked and eight months pregnant on the beach in Mexico. She is leaping through the air. "I was in Cabo San Lucas with Cliff, and there was a beach full of people. And I was like, 'I'm going to take my clothes off,' and he was like, 'No, HB, don't!' And I'm like, 'Fuck it! Take the picture!' And I took my clothes off and I just ran down the beach." She laughs at the thought. "I could not have been happier in my life."The next morning, Berry picks me up and we drive to the Jenesse Center. When I ask where we are, she says, "We in the 'hood," and then adds, "This is the good part of the 'hood. There are much scarier 'hoods." We drive past the Debbie Allen dance studios; a few blocks later, on Crenshaw Boulevard, Berry points out a big modern building and says, "Everybody in town goes to that church," by which she means Denzel Washington, Magic Johnson, and the rest of churchgoing black Hollywood. When I mention a gay black nightclub not far from here, Berry lights up. "I go there with Cliff on Halloween." (Berry dresses up every year in a way that I am not allowed to describe except to say that her costume completely obscures her face. "It's one of the funniest things we do," she says. "Total anonymity. I just let it all go, get wild, lose my mind. It's great.") It is clear, in other words, that while Berry may live in Beverly Hills and Malibu, she is entirely at home in this part of town.We arrive at the center, where a dozen photographers follow her as she makes her way across the parking lot. Inside, she is greeted so warmly by the women—who call her Miss Halle—that you sense immediately that she is part of this big family. As Karen Earl says, "This is not someone who is just showing up with a journalist. She is here all the time; she has relationships with the staff, who all have her E-mail address. She gives the clients her E-mail address. I couldn't speak from my heart about her if it was not the real deal."Berry is in the midst of renovating two apartments as safe houses for abused women. They are in a dicey neighborhood, and driving to them while losing the paparazzi (if their location was discovered, the women's lives would be in jeopardy) feels like some sort of caper in a bank-heist film.When we walk into the building, there are more hugs and good vibes from staffers and women and children as Berry shows me her pride and joy: a small one-bedroom apartment that she has, with the help of some friends, renovated into a playroom, a place where children can get new clothes, make art, and have therapy—as she did when she was a ten-year-old coping with an abusive, alcoholic father. The space is beautiful. It is called Nahla's World. On a wall near the door there are two tiny handprints in colored paint—her daughter's signature. "The last day we were here when we were finishing up this room," Berry says, "Nahla came and spent the whole day playing outside with all these kids for hours. She cried when I had to take her home." Berry and her team have pledged to renovate fifteen apartments by next April. "Because of my mother's and my experience, I understand fundamentally what these women and kids are going through. And I think that's why my heart is so in it."Berry is ready to put herself back out in the world in more familiar ways, too. "I'm so looking forward to getting back to work," she says. "It's been good being a mom, and I love it, but Nahla's gotten to a point where it's OK for me to get back to what I love, to have that creative outlet."She's about to shoot her first big film in years in South Africa—Dark Tide, a thriller she refers to as "the shark movie," which involves great whites, a bad husband, and all manner of undersea scuba action. Immediately afterward, she will begin shooting another film, Shoe Addicts Anonymous, that she describes as like The First Wives Club—but about shoes. "Shoes are sort of a metaphor for these women all coming together and dealing with who they are—in their 30s and 40s." She has her third perfume launch in February, and has an independent film coming out in October that she produced herself. Nine years in the making, it is called Frankie and Alice and is based on a true story set in the 1970s, about a stripper (from the 'hood) who suffers from multiple-personality disorder. "I am really proud of it," she says. "It's a small art movie about this woman and her journey dealing with MPD at a time when people didn't really believe it existed."The film costars Stellan Skarsgård as the shrink who helps her come to grips with her disorder—a character based on the real Dr. Oscar Janiger, famous for his association with the Beats; he wrote the story before he died in 2001. Berry, who had been trying to figure out how to get it made for years, saw Tipping the Velvet, a three-hour Victorian-lesbian drama directed by Geoffrey Sax, on the BBC, and hired him. "Pretty much as soon as I started working with her," says Sax, "I thought to myself: There is a reason why she won an Oscar. This could have either been schmaltzy or very kind of gothic, but what she brings to the role is absolute truth."Perhaps the most tantalizing prospect on the horizon for Berry is her appearance for the first time on Broadway sometime next year in Katori Hall's two-person play The Mountaintop, with Samuel L. Jackson, to be directed by Kenny Leon, who directed Denzel Washington and Viola Davis to Tony Awards in Fences. The play is about the last night of Martin Luther King, Jr.'s, life, with Berry playing a kind of imaginary chambermaid/angel. Not having been onstage since her days with Second City in Chicago more than 20 years ago, she is just a tad anxious. "Terrified is putting it lightly," she says, laughing a little too loud.For most of the last decade Berry has had a problem that many actresses would kill for: She is considered only for serious dramatic roles, which has partly to do with Monster's Ball. She has rarely been in a romantic comedy, or any kind of comedy, for that matter. Anything not dark or devastating she has had to fight for. As Benicio Del Toro, who worked with her on Things We Lost in the Fire, says, "A lot of her roles have been pretty intense, and that's because she's got the chops; she can carry those parts."But now? Ever since she put herself back on the market, her phone is ringing with offers: The shoe movie, the shark movie, the Broadway play. "Everybody talks about the Oscar curse," she says. "People win Oscars, and then it seems like they fall off the planet. And that's partly because a huge expectation walks in the room and sits right down on top of your head. The moment I won the Oscar, I felt the teardown the very next day. I thought, If I'm going down, I'm going down taking chances and daring to risk." She starts to laugh. "Hence...Catwoman."How big a disappointment was that?"I had such high hopes for that movie," she says with a sigh. "It seemed like a good idea. Men have done it. But our story just wasn't good enough. But I will tell you one thing that has helped me deal with the failure of that: Critics bashed it, but people come up to me now and either they say, 'I loved you in the movie B.A.P.S,' which is a comedy that I did, or they say, 'I don't care what anybody says, I liked Catwoman.' Nobody ever says, 'I really loved Monster's Ball.' Nobody. No. Body. Nobody!"It's sort of ironic that just as Berry was getting ready to make her comeback, the news of her breakup with Gabriel Aubry upstaged everything. "Just my luck!" she says. "By the time it hit the papers—full of rumors and lies, with people having to make up problems between us—Gabriel and I had long dealt with it. We were done. And we were on a good foot, and we had decided what we were going to do for Nahla, and we were able to say, 'This will pass.'"And did it pass?"In two weeks!" she says. "Because there was no truth to any of it. There is no discord, there is no fighting. So it came and went. Now we are back to how it was before: living apart, raising our daughter."Would it be fair to say that relationship simply ran its course?"It's just that you realize you are not meant to go the distance with everybody," she says. "We were meant to bring this amazing little person into the world. And I think that's why we came together. And because of that, we are going to be together forever, all three of us. We are a family until we are not here anymore."Are you two friendly at this point?"Yes. Very." She pauses for a moment, collects her thoughts. "We have always been friends, we're still friends, we love each other very much, and we both share the love of our lives. And we are both 100 percent committed to being the best parents we can be. And while it was not a love connection for us, he was absolutely the right person to have this child with because she is going to have an amazing father. And that was really important to me. We'll make sure we always do what is right for her and put her first. And she will see as she grows that we have a lot of love for each other."After Berry's breakup with Eric Benét, she famously vowed that she would never get married again. Does that still stand? "Yes," she says. "I'm not done with love, but I refuse to settle. I am a hopeless romantic. And I won't stop till I get it right."She goes on, "I don't think I'm unlike a lot of people. I am just someone who is trying to find that mate, and I think it's a really hard thing to do. And I'm not willing to stay somewhere where I am really not happy. And I am not willing to pretend I am for the kid's sake or so that I don't have to go through another public humiliation."Berry seems to have gained some hard-won wisdom: "It's about accepting who we really are, not who we want to be. As much as I have always wanted to be in this committed relationship and have the picket fence and grow old with the same person, I'm coming to terms with: Maybe that's just not who I am." What is clear is that she has found "the love of her life" with her daughter. "If anything was missing, it was that."What's your biggest worry these days? I ask. "I worry that this whole insatiable appetite for celebrity children will somehow adversely affect Nahla. I don't think it's fair, and I don't think it's safe. How will she grow up, having been objectified like this for most of her whole young life? Already they write things about her: Oh, she looks like this; oh, she looks like that. But nobody knows her. They just pick her apart on a very superficial level. How will I be able to help her keep that in perspective in this town?" To that end, she recently rented a house in San Francisco to spend time alone with Nahla away from the glare of celebrity. She's considering moving there full time, "to have her grow up in a place that is less of a fishbowl."For Berry, being a mother seems to have brought a clearer understanding of her own childhood. "I have a new focus that's outside myself," she says, "and that feels really good, in your 40s, to have arrived at that place. I'm actually lucky and grateful that I waited until an age when I can really be present. I saw my mother in her early 20s having two little kids, and I don't think she enjoyed me at two the way that I enjoy my daughter. She didn't have that luxury." She gets a funny, thoughtful look on her face. "Nature has got it all wrong: When you are younger, it should be harder to get pregnant, and as you get older it should be easier. When you are so ready, you can't do it to save your life. And when you are 21, you are so not ready, but you are ripe as could be. The eggs should become more developed the older you get, not die slowly from the day you're born. That's one thing God got wrong.""Halle's Hollywood" has been edited for Vogue.com; the complete story appears in the September 2010 issue of Vogue. ||||| Halle Berry Talks Breakup for First Time: 'We're Still Friends'
Email This In the September issue of
"It's just that you realize you are not meant to go the distance with everybody. We were meant to bring this amazing little person into the world. And I think that's why we came together. And because of that, we are going to be together, forever, all three of us. We are a family until we are not here anymore," she tells the magazine.
Berry and Aubry,
"We have always been friends, we're still friends, we love each other very much, and we both share the love of our lives. And we are both 100 percent committed to being the best parents we can be. And while it was not a love connection for us, he was absolutely the right person to have this child with because she is going to have an amazing father. And that was really important to me. We'll make sure we always do what is right for her and put her first. And she will see as she grows that we have a lot of love for each other," she adds in the interview.
Berry refused to remain committed to her ex romantically just for her daughter's sake. "I don't think I'm unlike a lot of people. I am just someone who is trying to find that mate, and I think it's a really hard thing to do. And I am not willing to stay somewhere where I am not really happy. And I am not willing to pretend I am for the kid's sake or so that I don't have to go through another public humiliation." In the September issue of Vogue Halle Berry opens up about her breakup with Gabriel Aubry for the first time."It's just that you realize you are not meant to go the distance with everybody. We were meant to bring this amazing little person into the world. And I think that's why we came together. And because of that, we are going to be together, forever, all three of us. We are a family until we are not here anymore," she tells the magazine.Berry and Aubry, who split this past April , have a 2-year-old daughter, Nahla, together. They'd been together four years when they ended their relationship."We have always been friends, we're still friends, we love each other very much, and we both share the love of our lives. And we are both 100 percent committed to being the best parents we can be. And while it was not a love connection for us, he was absolutely the right person to have this child with because she is going to have an amazing father. And that was really important to me. We'll make sure we always do what is right for her and put her first. And she will see as she grows that we have a lot of love for each other," she adds in the interview.Berry refused to remain committed to her ex romantically just for her daughter's sake. "I don't think I'm unlike a lot of people. I am just someone who is trying to find that mate, and I think it's a really hard thing to do. And I am not willing to stay somewhere where I am not really happy. And I am not willing to pretend I am for the kid's sake or so that I don't have to go through another public humiliation."
She is, and will forever be, one of the most special and beautiful people that I have ever known, and I am certain that we will continue to have only love and respect for one another. We have been blessed with the most amazing daughter in the world, and her happiness and well-being are the most important thing for both of us," he concluded.
http://xml.channel.aol.com/xmlpublisher/fetch.v2.xml?option=expand_relative_urls&dataUrlNodes=uiConfig,feedConfig,entry&id=922000&pid=921999&uts=1281701026 http://www.popeater.com/mm_track/popeater/music/?s_channel=us.musicpop&s_account=aolnews,aolsvc&omni=1&ke=1 http://cdn.channel.aol.com/cs_feed_v1_6/csfeedwrapper.swf Stars in Love Alicia Keys and Swizz Beatz
Married
The R&B superstar wed her longtime boyfriend, a music producer, in a ceremony in Corsica in July Jerritt Clark, Getty Images Jerritt Clark, Getty Images Happy in Hollywood
But the actress believes that the breakup is a positive thing. "It's about accepting who we really are, not who we want to be. As much as I have always wanted to be in this committed relationship and have the picket fence and grow old with the same person, I'm coming to terms with: Maybe that's just not who I am."Back when they first split, reports suggested that it was the 9-year age difference that caused the friction. (Berry is 43, Aubry is 34.)"Gabriel just felt it wasn't working anymore. When they were first together, the 9-year age difference between them didn't phase him, she was the most beautiful woman he had ever dated and he was totally in love. But as time went on he started feeling it more and more. Also, Gabriel started noticing other women and being attracted to others, and he felt it just wasn't right to stay with Halle in those circumstances," a source told Radar Online A friend close to the Oscar winner also believed Aubry to be jealous, PEOPLE reported. "I got the sense that he was jealous of her, that this is another example of a man not being able to deal with a successful and beautiful woman."Another friend confided in PEOPLE that he liked to spend time with other female models. "He is around them all the time for work. He wants to be free for a while."Aubry hit back at his critics following the breakup. "While I will not comment on all of the wild inaccuracies being speculated about in the media, I am sad to say that Halle and I have decided together to separate at this time," he told Access Hollywood The two have been true to their word when it comes to raising their daughter, and have been spotted together occasionally since the breakup. | Though she hasn't done an interview in three years, Halle Berry graces the cover, and pages, of Vogue's September issue because "what that means for a woman of color and what that means in the fashion world, what that means to pop culture, there was no way I could say, 'No I'm not going to be on the biggest issue of the year.'" More from the interview: She loves being naked: "If the world wouldn’t persecute me, I’d take nude pictures every day of the week." She also loves daughter Nahla: "Best thing that ever happened to me." Why she's been so silent: "I was burned-out with having other people tell the story about me that they wanted to tell. I told my publicist, 'I'm not going to talk anymore. I'm just going to live my life and be who I am.'" On her breakup with Gabriel Aubry: "There is no discord, there is no fighting. It's just that you realize you are not meant to go the distance with everybody. We were meant to bring this amazing little person into the world. And I think that's why we came together. And because of that, we are going to be together forever, all three of us. We are a family until we are not here anymore." For more from the interview, and to see her cover photo, click here. |
Mufid A. Elfgeeh (Photo: Provided) Story Highlights The FBI Joint Terrorism Task Force Saturday arrested Elfgeeh Saturday
Elfgeeh appeared before a federal magistrate judge Monday
On his Twitter account, Elfgeeh expressed support for various terrorist organizations
Records show that Elfgeeh operates a convenience store, MoJoe's Famous Pizza and Chicken
Through the 140 characters allowed on Twitter, Mufid Elfgeeh spelled out again and again his ideological hatred toward the United States, federal authorities allege.
In one Tweet, he announced his allegiance with al-Qaida, writing, "al-Qaida said it loud and clear; we are fighting the American invasion and their hegemony over the earth and the people," authorities say.
Other Tweets encouraged the donation of money for jihadists, and, while advocating martyrdom, Elfgeeh claimed al-Qaida and jihadists are the world's true Muslims.
On Saturday afternoon, FBI agents and members of the agency's Joint Terrorism Task Force arrested Elfgeeh in the parking lot of the Walmart at 1490 Hudson Ave. They allege that he'd planned to buy firearms and he wanted to use them to kill returning American troops as well as Shi'a Muslims living in the region.
Elfgeeh is a naturalized U.S. citizen from Yemen who managed a convenience store on North Clinton Avenue.
At the Walmart, Elfgeeh, 30, met with an FBI informant who provided him firearms and silencers, according to an affidavit from FBI Special Agent Albert Zenner.
A swarm of law enforcement officials arrested Elfgeeh around 3 p.m. as shoppers wandered in and out of the store. The weapons the informant gave Elfgeeh immediately before the arrest had been rendered inoperable beforehand, according to Assistant U.S. Attorney Brett Harvey, a prosecutor in the case.
"At no time was there a risk to the public this weekend," FBI Special Agent Brian Boetig, who heads the agency's western New York region, said about the large show of force for the arrest.
Elfgeeh is charged with two counts of illegally receiving and possessing unregistered firearm silencers, but the investigation is continuing, U.S. Attorney William Hochul Jr. said at a news conference Monday.
At a court appearance Monday before U.S. Magistrate Judge Jonathan Feldman, Elfgeeh was appointed lawyers from the Federal Public Defender's Office. A bail hearing is scheduled for June 16.
Federal prosecutors have requested that Elfgeeh stay jailed pending trial.
Using confidential informants, the FBI has been investigating Elfgeeh since early 2013, according to the affidavit from Zenner.
In early 2013, an individual who has occasionally worked as an informant for the FBI "first reported information about Elfgeeh."
The informant, records show, has helped the FBI since around 2000. He has been paid about $21,700 by the agency, and the FBI assisted him in receiving visas for family members.
CLOSE A press conference Monday outlined some of the details surrounding the arrest of Mufid A. Elfgeeh. Video by Tina Yee
A second informant, who also has been paid by the FBI, began a series of conversations with Elfgeeh in late 2013. Those broad talks about terrorism in the Middle East and American politics morphed into Elfgeeh's stated intent to do harm to Americans, authorities allege.
In the aftermath of the December terrorist attack on a mall in Kenya, Elfgeeh told the second informant that, "I'm thinking about just go buy a big automatic gun from off the street ... and just put on a vest or whatever and just go around and start shooting," the affidavit states.
Elfgeeh indicated he already had a bulletproof vest.
Elfgeeh discussed buying weapons from that informant, saying "I don't have ... no plan whatsoever," the affidavit alleges. He said he wanted weapons "for personal use."
He also allegedly said he would "try to do as much as we could before we get, get captured," and that he wanted to do video messages after the attacks.
In March, Elfgeeh apparently narrowed his plans to killing returning soldiers, authorities allege. He noted how a French-Algerian man had killed three French military members.
Elfgeeh told the informant, who'd indicated he could buy him firearms, that he could figure out who returning military members were from online searches.
Negotiations over possible weapons purchases continued into April and May. The conversations were recorded. Elfgeeh also inquired about prices for hand grenades, "the type that one would throw at someone as you are driving a car."
On Saturday, the FBI gave the informant a "Walther PPK .32-caliber handgun with a functional silencer affixed to the barrel, a Glock 26, 9-millimeter handgun with a functional silencer affixed to the barrel, two boxes of .32-caliber ammunition, and two boxes of 9-millimeter ammunition," the affidavit states.
The informant gave Elfgeeh the box carrying the weapons in the Walmart lot, moments before the arrest.
After the arrest, police and FBI agents executed a search warrant at Elfgeeh's home and a convenience store, MoJoe's, that he runs at 1193 N. Clinton Ave. The store, decorated in candy stripe red and white, advertises pizza, chicken and groceries, and fronts the residence where Elfgeeh lived.
Neighbors said agents searched the store and house for two hours or more Saturday evening.
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Read or Share this story: http://on.rocne.ws/1h0FsD5 ||||| ROCHESTER, N.Y. (CBSNewYork/AP) — A Rochester man was indicted Tuesday on charges that he tried to help three people go to Syria and fight for Islamic State.
As CBS 2’s Jessica Schneider reported, Mufid A. Elfgeeh, 30, was indicted on three counts of attempting to provide material support and resources to the group known as ISIS or ISIL. He was also charged with one count of attempted murder of current and former U.S. military members, and possessing firearms with silencers.
The indictment was announced Tuesday by U.S. Attorney General Eric Holder, Assistant Attorney General for National Security John Carlin, and U.S. Attorney William J. Hochul Jr. for the Western District of New York.
“We will remain aggressive in identifying and disrupting those who seek to provide support to ISIL and other terrorist groups that are bent on inflicting harm upon Americans,” Holder said in the release. “As this case shows, our agents and prosecutors are using all the investigative tools at our disposal to break up these plots before individuals can put their plans into action. We are focused on breaking up these activities on the front end, before supporters of ISIL can make good on plans to travel to the region or recruit sympathizers to this cause.”
Prosecutors claimed Elfgeeh tried to help three people go to Syria to join and fight on behalf of ISIS. Those three people have all decided to cooperate with the FBI, the release said.
In 2013 and into early 2014, Elfgeeh allegedly encouraged two confidential sources to go to Syria to fight for ISIS, and took several steps to prepare them for the plan, prosecutors said. He also allegedly sent $600 to a third person in Yemen, so that person could also go to Syria and fight for ISIS, prosecutors said.
Court documents also claimed that Elfgeeh in December 2013 first talked about shooting current and former military members who had come back from Iraq, and told one of the informants he was planning to send to Yemen that he was considering getting a gun and ammunition, donning a bulletproof vest, and “just go(ing) around and start shooting,” prosecutors said.
Elfgeeh allegedly gave the informant $1,050 in cash to buy two handguns with silencers and ammunition. The guns were made inoperable by the FBI before Elfgeeh got them, and he was arrested by the Rochester Joint Terrorism Task Force soon afterward, the release said.
CBS affiliate WROC-TV in Rochester reported that Elfgeeh was born in Yemen, but is a U.S. citizen. He was the owner of MoJoe’s Store and Food Mart on North Clinton Avenue in Rochester, which was hit by an overnight fire in July, the station reported.
When Elfgeeh was first arrested in June, a former employee, Victor Montalvo, told WROC that Elfgeeh was unpredictable and full of anger and rage.
“He’s a crazy guy, should be in prison,” Montalvo told the station in June.
Montalvo said he began working for Elfgeeh at MoJoe’s in March 2011, and told WROC that Elfgeeh would fire shotguns into the air in the middle of the street without warning.
“There was a fight in the middle, so he came with a shotgun outside and started to shoot to the air like crazy,” Montalvo said.
The announcement of Elfgeeh’s indictment upstate came the same day authorities warned of a threat to Times Square from ISIS militants. A post on an online message board for ISIS sympathizers encourages would-be terrorists to attack tourist hot spots in the United States, — and Times Square is the top target.
The post is titled “To the Lone Wolves in America: How to Make a Bomb in Your Kitchen, to Create Scenes of Horror in Tourist Spots and Other Targets.” It includes bomb-making instructions and a list of ingredients, even how to pack it with shrapnel, WCBS 880’s Rich Lamb reported.
Other American tourist spots are also on the threat list, including the Las Vegas Strip.
“This is a new world, if you will, or the evolving world of terrorism, and we’re staying ahead of it,” NYPD Commissioner Bill Bratton said Tuesday. “We’ve been focused on it, and I believe that we are as prepared as any entity could be to deal with the threats.”
As CBS 2 Political Reporter Marcia Kramer reported, the threat now has the NYPD more worried than they ever were about al Qaeda.
“We are quite concerned, as you would expect, with the capabilities of ISIS much more so than al Qaeda,” Bratton said.
Meanwhile, the nation’s top military officials testified Tuesday about President Barack Obama’s plan to stamp out ISIS fighters in Iraq and Syria.
Chairman of the Joint Chiefs Martin Dempsey told lawmakers that U.S. troops could be called to the battlefield if air strikes fail.
“If we reach the point where I believe our advisers should accompany Iraq troops on attacks against specific ISIL targets, I’ll recommend that to the president,” Martin said.
Elfgeeh remained in custody in Rochester Tuesday night.
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(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.) ||||| Attorney General Eric Holder, Assistant Attorney General for National Security John Carlin and U.S. Attorney William J. Hochul Jr. for the Western District of New York announced today that a federal grand jury in Rochester has returned a seven-count indictment charging Mufid A. Elfgeeh, 30, of Rochester, with three counts of attempting to provide material support and resources to the Islamic State of Iraq and the Levant (ISIL), aka the Islamic State of Iraq and Syria (ISIS), a designated foreign terrorist organization. In addition, Elfgeeh is also charged with one count of attempted murder of current and former members of the United States military, one count of possessing firearms equipped with silencers in furtherance of a crime of violence, and two counts of receipt and possession of unregistered firearm silencers.
“We will remain aggressive in identifying and disrupting those who seek to provide support to ISIL and other terrorist groups that are bent on inflicting harm upon Americans,” said Attorney General Holder. “As this case shows, our agents and prosecutors are using all the investigative tools at our disposal to break up these plots before individuals can put their plans into action. We are focused on breaking up these activities on the front end, before supporters of ISIL can make good on plans to travel to the region or recruit sympathizers to this cause.”
“Disrupting and holding accountable those who seek to provide material support to foreign terrorist organizations is and shall remain a critical national security priority,” said Assistant Attorney General Carlin. “I want to thank the agents, analysts and prosecutors who are responsible for the arrest and charges in this case.”
“With today's indictment of Mufid Elfgeehr, the government demonstrates that it will use all available tools to disrupt and defeat ISIS,” said U.S. Attorney Hochul. “The case also demonstrates that by working with the community, law enforcement is able to identify those who would harm our country or our returning soldiers.”
The material support charges each carry a maximum sentence of 15 years in prison, the attempted murder charge carries a maximum sentence of 20 years in prison, the firearms possession charge carries a mandatory minimum sentence of 30 years and a maximum of life in prison, and the firearm silencer charges each carry a maximum sentence of 10 years in prison.
According to court records, Elfgeeh attempted to provide material support to ISIS in the form of personnel, namely three individuals, two of whom were cooperating with the FBI. Elfgeeh attempted to assist all three individuals in traveling to Syria to join and fight on behalf of ISIS. Elfgeeh also plotted to shoot and kill members of the United States military who had returned from Iraq. As part of the plan to kill soldiers, Elfgeeh purchased two handguns equipped with firearm silencers and ammunition from a confidential source. The handguns were made inoperable by the FBI before the confidential source gave them to Elfgeeh.
According to court documents, in 2013 and into early 2014, Elfgeeh encouraged the two confidential sources (CS-1 and CS-2) to travel overseas to engage in violent jihad. After CS-1 and CS-2 agreed to travel to Syria to join ISIS, Elfgeeh took several steps to prepare them for the trip. Elfgeeh also sent $600 to an individual in Yemen for the purpose of assisting that individual in traveling from Yemen to Syria for the purpose of joining and fighting on behalf of ISIS.
Court documents also indicate that Elfgeeh first discussed the idea of shooting United States military members in December 2013 when he told CS-2 that he was thinking about getting a gun and ammunition, putting on a bulletproof vest, and “just go[ing] around and start shooting.” In February 2014, Elfgeeh told CS-2 that he needed a handgun and silencer. Elfgeeh later gave CS-2 $1,050 in cash to purchase two handguns equipped with silencers and ammunition. On May 31, 2014, CS-2 delivered the two handguns equipped with silencers and ammunition to Elfgeeh. After Elfgeeh took possession of the items, he was arrested by members of the Rochester Joint Terrorism Task Force. Elfgeeh is currently being held in custody.
The indictment is the result of an investigation on the part of the Rochester Joint Terrorism Task Force of the Federal Bureau of Investigation.
The defendant is being prosecuted by Assistant United States Attorneys Brett A. Harvey and Frank H. Sherman, with the assistance of Trial Attorney Steven P. Ward of the National Security Division’s Counterterrorism Section.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent unless and until proven guilty. ||||| Rochester Man Indicted For Attempting to Provide Support to ISIS Video
- A Rochester man is the face of America's fight against terrorism. Mufid A. Elfgeeh, age 30, owns a corner store in the city. The U.S. Attorney General says he recruited Americans to fight for the Islamic State in Syria. Elfgeeh is one of the first Americans to be charged in the U.S. battle against ISIS.
Elfgeeh was first taken into custody in May. In the parking lot outside Walmart on Hudson Avenue, he allegedly bought handguns and ammunition from an FBI informant. Prosecutors said he was planning to kill members of
the U.S. military returning from Iraq. Now, they say, he was trying to help three people go to Syria, to join and fight on behalf of ISIS. They say he first discussed engaging in jihad late last year, then took several steps to prepare those people for the trip. They say he sent money to Yemen, to help them travel to Syria. The plot was foiled when those people decided to cooperate with the FBI.
As News 8 first reported in June, Elfgeeh was born in Yemen, but is a U.S. citizen. He owned Mojoe's store on North Clinton and lived above the store. A man who once worked for him, said he was full of anger and rage.
In a statement Tuesday, U.S. Attorney General Eric Holder said, "As this case shows, our agents and prosecutors are using all the investigative tools at our disposal, to break up these plots before individuals can put their plans into action."
Elfgeeh was indicted on federal charges of providing material support to ISIS, attempted murder of U.S. military members, and possessing firearms with silencers.
Elfgeeh is currently in custody. If he's convicted, he could face up to life in prison.
||||| His plan began in late 2013 and continued into 2014, authorities said. The three people were under instruction from Elfgeeh to travel to Syria to join Islamic State, where they would aid in conducting jihad, the news release said. A person in Yemen was also allegedly sent money by Elfgeeh in order to aid Islamic State, authorities said. | A man from Rochester, NY, was indicted yesterday on charges of attempting to help three people (two of them FBI informants) travel to Syria to take up arms with ISIS, reports the LA Times. The Justice Department statement further alleges that Mufid Elfgeeh sent $600 to a potential recruit in Yemen, with the funds designed to enable the individual to head to Syria and join ISIS. Elfgeeh was also charged with scheming to kill US troops who had returned from Iraq, going so far as to buy two silenced (but inoperable) pistols from a source working with the FBI. The naturalized US citizen was born in Yemen, WROC reports. Before his arrest in May, Elfgeeh was already known for his volatile behavior and incendiary Twitter updates, once tweeting that al-Qaeda "said it loud and clear; we are fighting the American invasion and their hegemony over the earth and the people," the Democrat and Chronicle reports. A man who used to work for Elfgeeh at his convenience store called him "a crazy guy [who] should be in prison." He said Elfgeeh would sometimes suddenly start shooting off his guns in the street, CBS New York reports. "We will remain aggressive in identifying and disrupting those who seek to provide support to ISIL and other terrorist groups that are bent on inflicting harm upon Americans," Attorney General Eric Holder says in the statement. (ISIS recruiters are now targeting American women.) |
The White House has put special operations strike forces on standby and moved drones into the skies above Africa, ready to strike militant targets from Libya to Mali _ if investigators can find the al-Qaida-linked group responsible for the death of the U.S. ambassador and three other Americans in Libya.
FILE - In this Sept. 14, 2012 file photo, Libyan military guards check one of the burnt out buildings at the U.S. Consulate in Benghazi, Libya, during a visit by Libyan President Mohammed el-Megarif to... (Associated Press)
FILE - In this April 11, 2011 file photo, U.S. envoy Chris Stevens attends meetings at the Tibesty Hotel in Benghazi, Libya, where an African Union delegation was meeting with opposition leaders. Stevens,... (Associated Press)
FILE - In this Aug. 31, 2012 file photo, fighters from Islamist group Ansar Dine stand guard in Timbuktu, Mali, as they prepare to publicly lash a member of the Islamic Police found guilty of adultery.... (Associated Press)
But officials say the administration, with weeks until the presidential election, is weighing whether the short-term payoff of exacting retribution on al-Qaida is worth the risk that such strikes could elevate the group's profile in the region, alienate governments the U.S. needs to fight it in the future and do little to slow the growing terror threat in North Africa.
Details on the administration's position and on its search for a possible target were provided by three current and one former administration official, as well as an analyst who was approached by the White House for help. All four spoke on condition of anonymity because they were not authorized to discuss the high-level debates publicly.
The dilemma shows the tension of the White House's need to demonstrate it is responding forcefully to al-Qaida, balanced against its long-term plans to develop relationships and trust with local governments and build a permanent U.S. counterterrorist network in the region.
Vice President Joe Biden pledged in his debate last week with Republican vice presidential nominee Paul Ryan to find those responsible for the Sept. 11 attack on the U.S. Consulate in Benghazi that killed Ambassador Chris Stevens and three others.
"We will find and bring to justice the men who did this," Biden said in response to a question about whether intelligence failures led to lax security around Stevens and the consulate. Referring back to the raid that killed Osama bin Laden last year, Biden said American counterterror policy should be, "if you do harm to America, we will track you to the gates of hell if need be."
The White House declined to comment on the debate over how best to respond to the Benghazi attack.
The attack has become an issue in the U.S. election season, with Republicans accusing the Obama administration of being slow to label the assault an act of terrorism early on, and slow to strike back at those responsible.
"They are aiming for a small pop, a flash in the pan, so as to be able to say, `Hey, we're doing something about it,'" said retired Air Force Lt. Col. Rudy Attalah, the former Africa counterterrorism director for the Department of Defense under President George W. Bush.
Attalah noted that in 1998, after the embassy bombing in Nairobi, the Clinton administration fired cruise missiles to take out a pharmaceutical factory in Sudan that may have been producing chemical weapons for al-Qaida.
"It was a way to say, `Look, we did something,'" he said.
On the subject of developing a special operations unit, U.S. officials received approval from Congress well before the Benghazi attack to reprogram some funding in the budget that could be used for the commando program in Libya. But the details are still being discussed with the Libyans and also must get final approval from Congress, according to the defense official, who spoke on condition of anonymity because he was not authorized to discuss the matter publicly.
The initial cost is estimated at about $6.2 million.
The defense official said U.S. leaders have recognized the need to train Libyan commando forces, but details such as the size, mission and the composition of the forces are still being finalized.
A Washington-based analyst with extensive experience in Africa said that administration officials have approached him asking for help in connecting the dots to Mali, whose northern half fell to al-Qaida-linked rebels this spring. They wanted to know if he could suggest potential targets, which he says he was not able to do.
"The civilian side is looking into doing something, and is running into a lot of pushback from the military side," the analyst said. "The resistance that is coming from the military side is because the military has both worked in the region and trained in the region. So they are more realistic."
Islamists in the region are preparing for a reaction from the U.S.
"If America hits us, I promise you that we will multiply the Sept. 11 attack by 10," said Oumar Ould Hamaha, a spokesman for the Islamists in northern Mali, while denying that his group or al-Qaida fighters based in Mali played a role in the Benghazi attack.
Finding the militants who overwhelmed a small security force at the consulate isn't going to be easy.
The key suspects are members of the Libyan militia group Ansar al-Shariah. The group has denied responsibility, but eyewitnesses saw Ansar fighters at the consulate, and U.S. intelligence intercepted phone calls after the attack from Ansar fighters to leaders of al-Qaida in the Islamic Maghreb, or AQIM, bragging about it. The affiliate's leaders are known to be mostly in northern Mali, where they have seized a territory as large as Texas following a coup in the country's capital.
But U.S. investigators have only loosely linked "one or two names" to the attack, and they lack proof that it was planned ahead of time, or that the local fighters had any help from the larger al-Qaida affiliate, officials say.
If that proof is found, the White House must decide whether to ask Libyan security forces to arrest the suspects with an eye to extraditing them to the U.S. for trial, or to simply target the suspects with U.S. covert action.
U.S. officials say covert action is more likely. The FBI couldn't gain access to the consulate until weeks after the attack, so it is unlikely it will be able to build a strong criminal case. The U.S. is also leery of trusting the arrest and questioning of the suspects to the fledgling Libyan security forces and legal system still building after the overthrow of Moammar Gadhafi in 2011.
The burden of proof for U.S. covert action is far lower, but action by the CIA or special operations forces still requires a body of evidence that shows the suspect either took part in the violence or presents a "continuing and persistent, imminent threat" to U.S. targets, current and former officials said.
"If the people who were targeted were themselves directly complicit in this attack or directly affiliated with a group strongly implicated in the attack, then you can make an argument of imminence of threat," said Robert Grenier, former director of the CIA's Counterterrorism Center.
But if the U.S. acts alone to target them in Africa, " it raises all kinds of sovereignty issues ... and makes people very uncomfortable," said Grenier, who has criticized the CIA's heavy use of drones in Pakistan without that government's support.
Even a strike that happens with permission could prove problematic, especially in Libya or Mali where al-Qaida supporters are currently based. Both countries have fragile, interim governments that could lose popular support if they are seen allowing the U.S. unfettered access to hunt al-Qaida.
The Libyan government is so wary of the U.S. investigation expanding into unilateral action that it refused requests to arm the drones now being flown over Libya. Libyan officials have complained publicly that they were unaware of how large the U.S. intelligence presence was in Benghazi until a couple of dozen U.S. officials showed up at the airport after the attack, waiting to be evacuated _ roughly twice the number of U.S. staff the Libyans thought were there. A number of those waiting to be evacuated worked for U.S. intelligence, according to two American officials.
In Mali, U.S. officials have urged the government to allow special operations trainers to return, to work with Mali's forces to push al-Qaida out of that country's northern area. AQIM is among the groups that filled the power vacuum after a coup by rebellious Malian forces in March. U.S. special operations forces trainers left Mali just days after the coup. While such trainers have not been invited to return, the U.S. has expanded its intelligence effort on Mali, focusing satellite and spy flights over the contested northern region to track and map the militant groups vying for control of the territory, officials say.
In northern Mali, residents in the three largest cities say they hear the sound of airplanes overhead but can't spot them. That's standard for drones, which are often invisible to the naked eye, flying several thousand feet above ground.
Residents say the plane sounds have increased sharply in recent weeks, following both the attack in Benghazi and the growing calls for a military intervention in Mali.
Chabane Arby, a 23-year-old student from Timbuktu, said the planes make a growling sound overhead. "When they hear them, the Islamists come out and start shooting into the sky," he said.
Aboubacrine Aidarra, another resident of Timbuktu, said the planes circle overhead both day and night. "I have a friend who said he recently saw six at one time, circling overhead. ... They are planes that fly at high altitudes. But they make a big sound. "
___
Callimachi reported from Bamako, Mali.
Dozier can be followed on Twitter (at)kimberlydozier. ||||| “The proposal reflects the security environment and the uncertainty coming out of the government transition in Libya,” said a senior Pentagon official who spoke on condition of anonymity because the program has not been officially announced. “The multimilitia fabric that’s providing security there needs to be brought into a more integrated national security system.”
A spokesman for Libya’s new president, Mohamed Magariaf, did not respond to detailed inquiries by e-mail, and other Libyan military officials did not return phone calls. Its transitional government continues to be in a state of flux as a newly chosen prime minister prepares to appoint defense and interior ministers.
Libyan commentators have expressed hope that a Western power would help train the country’s fledgling national army, so the proposal might be well received. But it still faces many challenges, including how to get the powerful militias to buy into it while taming their influence, and vetting a force to weed out Islamic extremists.
“Over all, it’s a sound strategy, but my concern is that in the vetting they make sure this doesn’t become a Trojan horse for the militias to come in,” said Frederic Wehrey, a senior policy analyst with the Carnegie Endowment for International Peace who visited Libya recently and wrote a paper last month on security in the country, “The Struggle for Security in Eastern Libya.”
Mr. Wehrey cautioned that many Libyan officers and soldiers would also need training in English to help them understand various manuals. Other officials warned that any program must be transparent to the Libyan people to avoid starting rumors of ulterior American motives for wanting to train the new commandos. Also, trainers would have to build the professionalism in the officer corps that was lacking under the government of Col. Muammar el-Qaddafi, Mr. Wehrey said.
The internal State Department budget document to Congress states that the program will also be “encouraging increased professionalism and respect for human rights.” It also proposes using some of the money to buy unspecified equipment for the commandos.
The document also describes an additional $4 million to help Libya improve control of its borders. After the revolution, vast arsenals of the Qaddafi-era army were looted, and Western officials are particularly worried that thousands of shoulder-fired antiaircraft missiles were spirited out of the country, possibly into the hands of extremist groups.
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The proposed Libyan commando force springs from an unusual partnership between the State Department and the Pentagon. Just last year, Secretary of State Hillary Rodham Clinton and the defense secretary at the time, Robert M. Gates, agreed to pool resources from their departments in a fund approved by Congress to respond more quickly to emerging threats from Al Qaeda and other militants in places like Libya, Nigeria and Bangladesh.
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The program, the Global Security Contingency Fund, is small as government projects go with a budget of up to $250 million a year, mostly from the Pentagon, but it is meant to address many of the government’s counterterrorism and broader security challenges over several years.
American officials have had an eye on helping Libya since the NATO-led operation toppled Colonel Qaddafi’s government last year, and new civilian leaders began trying to bring order to the country.
In the first visit by an American defense secretary to Libya, Leon E. Panetta pledged last December that the United States “stands ready to offer security assistance cooperation once the government identifies its needs.” Mr. Panetta did not discuss the commando force during the visit, a Pentagon spokesman said.
Under Colonel Qaddafi, the Libyan Army had special forces units, but they were not particularly well trained or trusted by the government, American officials said. Members of the special forces in the east were among the first to defect, and American officials now envision a new, properly trained commando force as the core around which to rebuild the Libyan military.
The $8 million is considered seed money to begin building and equipping the commando force. One American official who formerly served in Libya said the initial vetting would probably be conducted by American and Libyan officials, and would include screening for physical skills, mental aptitude and ties to extremist groups that were hostile to the Libyan government.
American trainers would likely focus on basic skills, like marksmanship and small-arms tactics, and then move on to more advanced counterterrorism, reconnaissance and hostage-rescue skills.
“It’s basically a quick-reaction force at first,” said the official, who was not authorized to comment publicly on the planning.
Officials in Washington said they were expecting a final decision on the plan by the end of the year, with trainers fielding the initial units within 12 months.
The fluid, shifting security landscape is driving both American and Libyan officials to speed up the planning.
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“The bad guys are making plans and organizing,” said the American official who formerly served in Libya. “It’s a footrace between the extremist groups and the Libyan government that’s trying to get organized.” | Hoping to prevent a repeat of last month's attack on the US consulate in Benghazi, the Obama administration is ratcheting up efforts to help build a new Libyan commando force. Work was under way on the force before the attack, but the US is looking to speed the process. Congress last month approved the movement of $8 million from defense work in Pakistan to the Libyan project, the New York Times reports, which officials say will "counter and defeat terrorist and violent extremist organizations." "The multimilitia fabric that’s providing security there needs to be brought into a more integrated national security system," notes a top Pentagon official. Meanwhile, US forces are preparing for a potential strike against those responsible for the Benghazi attack—though they'll have to find the al-Qaeda linked group first. Special ops are on standby and drones are poised over Africa, the AP reports. The administration, however, is facing a dilemma: While such an attack could offer political gain ahead of the US election, it could also bolster al-Qaeda's standing locally and damage relationships with nearby governments. |
Move over salt. Step aside, saturated fat. There’s a new public enemy in the pantry, and it’s … sugar.In a provocative commentary coming out in Thursday’s edition of the journal Nature, Dr. Robert Lustig and two colleagues from UC San Francisco argue that the added sugars in processed foods and drinks are responsible for so many cases of chronic disease and premature deaths that their use ought to be regulated, just like alcohol and tobacco.To those who view sugar as more of a treat than a poison – and especially to libertarian-minded people who oppose government regulation in general – Lustig’s proposal is certainly a nonstarter. Public health advocates have spent years trying to enact a soda tax to discourage consumption of added sugar, and none of their efforts is close to succeeding.But if you set aside both political reality and your sweet tooth, you have to admit that Lustig makes some good points.For starters, he and coauthors Laura Schmidt and Claire Brindis of the Philip R. Lee Institute for Health Policy Studies at UCSF aren’t claiming that sugar should be illegal or removed from the diet completely. They are focused on added sugars, which they define as “any sweetener containing the molecule fructose that is added to food in processing.”In this country, the average American consumes 222 calories worth of sugar from sugar cane and sugar beets each day, along with 165 calories with of sugar from high fructose corn syrup, or HFCS, according to data from the U.S. Department of Agriculture . But the proposed regulations wouldn't make any distinction between these sweeteners -- any caloric sweetener that contains fructose would be subject to scrutiny.Why? Because even the United Nations recognizes that the greatest threat to public health now comes from non- communicable diseases , including diabetes heart disease and cancer . Together, these play a role in more than 35 million deaths each year. And they get a big boost from the choices people make about tobacco, alcohol and diet.Of these three “risk factors,” only tobacco and alcohol are currently subject to regulation, the authors write. Of course, these differ from food in that they are not necessary for survival. But added sugars – and the items made with them – aren’t necessary either.When it comes to alcohol, there are four criteria that justify government regulation, according to the 2003 book “Alcohol: No Ordinary Commodity”:* It’s unavoidable in society.* It’s toxic.* It can be abused.* It’s bad for society.“Sugar meets the same criteria,” Lustig and colleagues write, “and we believe that it similarly warrants some form of societal intervention.”The U.N.’s Food and Agriculture Organization says that in 2007, Americans consumed more than 600 calories' worth of added sugar each day. And the damage it does goes beyond supplying empty calories. In fact, it may not be excess fat that causes diabetes, heart disease, high blood pressure non-alcoholic fatty liver disease and other manifestations of metabolic syndrome – there’s scientific evidence that suggests sugar itself is to blame. After all, 20% of obese people don’t have these diseases, but 40% of normal-weight people do.“For both alcohol and tobacco, there is robust evidence that gentle ‘supply side’ control strategies which stop far short of all-out prohibition – taxation, distrbution controls, age limits – lower both consumption of the product and the accompanying health harms,” the UCSF trio writes. “Consequently, we propose adding taxes to processed foods that contain any form of added sugars.”Though this is a pipe dream in the U.S. (despite the authors’ attempt to call their proposal “the possible dream”), they do note that Canada and some countries in Europe already impose small taxes on some artificially sweetened foods. Denmark, the country that imposed a “fat tax” last year, is now eyeing a sugar tax as well.Short of taxes, there are other things regulators can do to discourage consumption of added sugar. “States could apply zoning ordinances to control the number of fast-food outlets and convenience stores in low-income communities, and especially around schools,” the authors argue.States could also impose a “drinking age” for buying soda, sports drinks and other sugar-sweetened beverages. (The authors suggest age 17.)And how about “a limit – or, ideally, ban – on television commercials for products with added sugars”?At a minimum, the U.S. Food and Drug Administrationcould remove fructose from its list of items Generally Recognized as Safe . That would force food makers to seek an FDA review of products with added sugars.“The food industry knows that it has a problem,” the authors write. “With enough clamour for change, tectonic shifts in policy become powerful.”A link to the commentary (which is behind a paywall) is online here An earlier version of this post said that most added sugar consumed in the U.S. is in the form of high fructose corn syrup, or HFCS. It should have said that Americans consume more HFCS than people in other countries. In 2010, the average American consumed 34.8 pounds of HFCS and 47 pounds of cane and beet sugar, according to data from the U.S. Department of Agriculture.Return to the Booster Shots blog ||||| SUMMARY
Sugar consumption is linked to a rise in non-communicable disease
Sugar's effects on the body can be similar to those of alcohol
Regulation could include tax, limiting sales during school hours and placing age limits on purchase
Last September, the United Nations declared that, for the first time in human history, chronic non-communicable diseases such as heart disease, cancer and diabetes pose a greater health burden worldwide than do infectious diseases, contributing to 35 million deaths annually.
This is not just a problem of the developed world. Every country that has adopted the Western diet — one dominated by low-cost, highly processed food — has witnessed rising rates of obesity and related diseases. There are now 30% more people who are obese than who are undernourished. Economic development means that the populations of low- and middle-income countries are living longer, and therefore are more susceptible to non-communicable diseases; 80% of deaths attributable to them occur in these countries.
ILLUSTRATION BY MARK SMITH
Many people think that obesity is the root cause of these diseases. But 20% of obese people have normal metabolism and will have a normal lifespan. Conversely, up to 40% of normal-weight people develop the diseases that constitute the metabolic syndrome: diabetes, hypertension, lipid problems, cardiovascular disease andnon-alcoholic fatty liver disease. Obesity is not the cause; rather, it is a marker for metabolic dysfunction, which is even more prevalent.
The UN announcement targets tobacco, alcohol and diet as the central risk factors in non-communicable disease. Two of these three — tobacco and alcohol — are regulated by governments to protect public health, leaving one of the primary culprits behind this worldwide health crisis unchecked. Of course, regulating food is more complicated — food is required, whereas tobacco and alcohol are non-essential consumables. The key question is: what aspects of the Western diet should be the focus of intervention?
In October 2011, Denmark chose to tax foods high in saturated fat, despite the fact that most medical professionals no longer believe that fat is the primary culprit. But now, the country is considering taxing sugar as well — a more plausible and defensible step. Indeed, rather than focusing on fat and salt — the current dietary 'bogeymen' of the US Department of Agriculture (USDA) and the European Food Safety Authority — we believe that attention should be turned to 'added sugar', defined as any sweetener containing the molecule fructose that is added to food in processing.
Over the past 50 years, consumption of sugar has tripled worldwide. In the United States, there is fierce controversy over the pervasive use of one particular added sugar — high-fructose corn syrup (HFCS). It is manufactured from corn syrup (glucose), processed to yield a roughly equal mixture of glucose and fructose. Most other developed countries eschew HFCS, relying on naturally occurring sucrose as an added sugar, which also consists of equal parts glucose and fructose.
Authorities consider sugar as 'empty calories' — but there is nothing empty about these calories. A growing body of scientific evidence is showing that fructose can trigger processes that lead to liver toxicity and a host of other chronic diseases1. A little is not a problem, but a lot kills — slowly (see 'Deadly effect'). If international bodies are truly concerned about public health, they must consider limiting fructose — and its main delivery vehicles, the added sugars HFCS and sucrose — which pose dangers to individuals and to society as a whole.
Table 1: Deadly effect
Excessive consumption of fructose can cause many of the same health problems as alcohol. Full table
No ordinary commodity
In 2003, social psychologist Thomas Babor and his colleagues published a landmark book called Alcohol: No Ordinary Commodity, in which they established four criteria, now largely accepted by the public-health community, that justify the regulation of alcohol — unavoidability (or pervasiveness throughout society), toxicity, potential for abuse and negative impact on society2. Sugar meets the same criteria, and we believe that it similarly warrants some form of societal intervention.
First, consider unavoidability. Evolutionarily, sugar was available to our ancestors as fruit for only a few months a year (at harvest time), or as honey, which was guarded by bees. But in recent years, sugar has been added to nearly all processed foods, limiting consumer choice3. Nature made sugar hard to get; man made it easy. In many parts of the world, people are consuming an average of more than 500 calories per day from added sugar alone (see 'The global sugar glut').
SOURCE: FAO
Now, let's consider toxicity. A growing body of epidemiological and mechanistic evidence argues that excessive sugar consumption affects human health beyond simply adding calories4. Importantly, sugar induces all of the diseases associated with metabolic syndrome1, 5. This includes: hypertension (fructose increases uric acid, which raises blood pressure); high triglycerides and insulin resistance through synthesis of fat in the liver; diabetes from increased liver glucose production combined with insulin resistance; and the ageing process, caused by damage to lipids, proteins and DNA through non-enzymatic binding of fructose to these molecules. It can also be argued that fructose exerts toxic effects on the liver that are similar to those of alcohol1. This is no surprise, because alcohol is derived from the fermentation of sugar. Some early studies have also linked sugar consumption to human cancer and cognitive decline.
Sugar also has clear potential for abuse. Like tobacco and alcohol, it acts on the brain to encourage subsequent intake. There are now numerous studies examining the dependence-producing properties of sugar in humans6. Specifically, sugar dampens the suppression of the hormone ghrelin, which signals hunger to the brain. It also interferes with the normal transport and signalling of the hormone leptin, which helps to produce the feeling of satiety. And it reduces dopamine signalling in the brain's reward centre, thereby decreasing the pleasure derived from food and compelling the individual to consume more1, 6.
Finally, consider the negative effects of sugar on society. Passive smoking and drink-driving fatalities provided strong arguments for tobacco and alcohol control, respectively. The long-term economic, health-care and human costs of metabolic syndrome place sugar overconsumption in the same category7. The United States spends $65 billion in lost productivity and $150 billion on health-care resources annually for morbidities associated with metabolic syndrome. Seventy-five per cent of all US health-care dollars are now spent on treating these diseases and their resultant disabilities. Because about 25% of military applicants are now rejected for obesity-related reasons, the past three US surgeons general and the chairman of the US Joint Chiefs of Staff have declared obesity a “threat to national security”.
How to intervene
How can we reduce sugar consumption? After all, sugar is natural. Sugar is a nutrient. Sugar is pleasure. So too is alcohol, but in both cases, too much of a good thing is toxic. It may be helpful to look to the many generations of international experience with alcohol and tobacco to find models that work8, 9. So far, evidence shows that individually focused approaches, such as school-based interventions that teach children about diet and exercise, demonstrate little efficacy. Conversely, for both alcohol and tobacco, there is robust evidence that gentle 'supply side' control strategies which stop far short of all-out prohibition — taxation, distribution controls, age limits — lower both consumption of the product and the accompanying health harms. Successful interventions share a common end-point: curbing availability2, 8, 9.
Taxing alcohol and tobacco products — in the form of special excise duties, value-added taxes and sales taxes — are the most popular and effective ways to reduce smoking and drinking, and in turn, substance abuse and related harms2. Consequently, we propose adding taxes to processed foods that contain any form of added sugars. This would include sweetened fizzy drinks (soda), other sugar-sweetened beverages (for example, juice, sports drinks and chocolate milk) and sugared cereal. Already, Canada and some European countries impose small additional taxes on some sweetened foods. The United States is currently considering a penny-per-ounce soda tax (about 34 cents per litre), which would raise the price of a can by 10–12 cents. Currently, a US citizen consumes an average of 216 litres of soda per year, of which 58% contains sugar. Taxing at a penny an ounce could provide annual revenue in excess of $45 per capita (roughly $14 billion per year); however, this would be unlikely to reduce total consumption. Statistical modelling suggests that the price would have to double to significantly reduce soda consumption — so a $1 can should cost $2 (ref. 10).
Other successful tobacco- and alcohol-control strategies limit availability, such as reducing the hours that retailers are open, controlling the location and density of retail markets and limiting who can legally purchase the products2, 9. A reasonable parallel for sugar would tighten licensing requirements on vending machines and snack bars that sell sugary products in schools and workplaces. Many schools have removed unhealthy fizzy drinks and candy from vending machines, but often replaced them with juice and sports drinks, which also contain added sugar. States could apply zoning ordinances to control the number of fast-food outlets and convenience stores in low-income communities, and especially around schools, while providing incentives for the establishment of grocery stores and farmer's markets.
Another option would be to limit sales during school operation, or to designate an age limit (such as 17) for the purchase of drinks with added sugar, particularly soda. Indeed, parents in South Philadelphia, Pennsylvania, recently took this upon themselves by lining up outside convenience stores and blocking children from entering them after school. Why couldn't a public-health directive do the same?
The possible dream
Government-imposed regulations on the marketing of alcohol to young people have been quite effective, but there is no such approach to sugar-laden products. Even so, the city of San Francisco, California, recently banned the inclusion of toys with unhealthy meals such as some types of fast food. A limit — or, ideally, ban — on television commercials for products with added sugars could further protect children's health.
Reduced fructose consumption could also be fostered through changes in subsidization. Promotion of healthy foods in US low-income programmes, such as the Special Supplemental Nutrition Program for Women, Infants and Children and the Supplemental Nutrition Assistance Program (also known as the food-stamps programme) is an obvious place to start. Unfortunately, the petition by New York City to remove soft drinks from the food-stamp programme was denied by the USDA.
“Sugar is cheap, sugar tastes good and sugar sells, so companies have little incentive to change.”
Ultimately, food producers and distributors must reduce the amount of sugar added to foods. But sugar is cheap, sugar tastes good and sugar sells, so companies have little incentive to change. Although one institution alone can't turn this juggernaut around, the US Food and Drug Administration could “set the table” for change8. To start, it should consider removing fructose from the Generally Regarded as Safe (GRAS) list, which allows food manufacturers to add unlimited amounts to any food. Opponents will argue that other nutrients on the GRAS list, such as iron and vitamins A and D, can also be toxic when over-consumed. However, unlike sugar, these substances have no abuse potential. Removal from the GRAS list would send a powerful signal to the European Food Safety Authority and the rest of the world.
Regulating sugar will not be easy — particularly in the 'emerging markets' of developing countries where soft drinks are often cheaper than potable water or milk. We recognize that societal intervention to reduce the supply and demand for sugar faces an uphill political battle against a powerful sugar lobby, and will require active engagement from all stakeholders. Still, the food industry knows that it has a problem — even vigorous lobbying by fast-food companies couldn't defeat the toy ban in San Francisco. With enough clamour for change, tectonic shifts in policy become possible. Take, for instance, bans on smoking in public places and the use of designated drivers, not to mention airbags in cars and condom dispensers in public bathrooms. These simple measures — which have all been on the battleground of American politics — are now taken for granted as essential tools for our public health and well-being. It's time to turn our attention to sugar. ||||| Contains Nonbinding Recommendations
December 2004
Additional copies are available from:
Office of Food Additive Safety, HFS-200
Center for Food Safety and Applied Nutrition
Food and Drug Administration
5100 Paint Branch Parkway
College Park, MD 20740
(Tel) 301-436-1200 (Updated phone: 240-402-1200)
http://www.cfsan.fda.gov/guidance.html
U.S. Department of Health and Human Services
Food and Drug Administration
Center for Food Safety and Applied Nutrition (CFSAN)
December 2004
Contains Nonbinding Recommendations
This guidance represents the Food and Drug Administration's (FDA's) current thinking on this topic. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach can be used if such approach satisfies the requirements of the applicable statutes and regulations. If you want to discuss an alternative approach, please contact the FDA staff responsible for implementing this guidance. If you cannot identify the appropriate FDA staff, contact the appropriate number listed on the title page of this document.
This list of frequently asked questions (FAQ) is intended to be a convenient place to find answers to common questions about the food ingredient classification known as "generally recognized as safe" or "GRAS." This FAQ addresses common questions about the regulatory process and regulatory considerations regarding whether the use of a food substance is GRAS. For more information about the GRAS program, please contact Dr. Paulette Gaynor (301-436-1192)(Updated phone: 240-402-1192) in the Office of Food Additive Safety, or email questions to [email protected]. See additional contact information at the bottom of this page.
What does "GRAS" mean? "GRAS" is an acronym for the phrase Generally Recognized As Safe. Under sections 201(s) and 409 of the Federal Food, Drug, and Cosmetic Act (the Act), any substance that is intentionally added to food is a food additive, that is subject to premarket review and approval by FDA, unless the substance is generally recognized, among qualified experts, as having been adequately shown to be safe under the conditions of its intended use, or unless the use of the substance is otherwise excluded from the definition of a food additive. For example, substances whose use meets the definition of a pesticide, a dietary ingredient of a dietary supplement, a color additive, a new animal drug, or a substance approved for such use prior to September 6, 1958, are excluded from the definition of food additive. Sections 201(s) and 409 were enacted in 1958 as part of the Food Additives Amendment to the Act. While it is impracticable to list all ingredients whose use is generally recognized as safe, FDA published a partial list of food ingredients whose use is generally recognized as safe to aid the industry's understanding of what did not require approval.
What are the criteria for GRAS status? Under sections 201(s) and 409 of the Act, and FDA's implementing regulations in 21 CFR 170.3 and 21 CFR 170.30, the use of a food substance may be GRAS either through scientific procedures or, for a substance used in food before 1958, through experience based on common use in food. Under 21 CFR 170.30(b), general recognition of safety through scientific procedures requires the same quantity and quality of scientific evidence as is required to obtain approval of the substance as a food additive and ordinarily is based upon published studies, which may be corroborated by unpublished studies and other data and information.
Under 21 CFR 170.30(c) and 170.3(f), general recognition of safety through experience based on common use in foods requires a substantial history of consumption for food use by a significant number of consumers.
In what way are the criteria for the use of a substance to be GRAS similar to that for the approved use of a food additive? Regardless of whether the use of a substance is a food additive use or is GRAS, there must be evidence that the substance is safe under the conditions of its intended use. FDA has defined "safe" (21 CFR 170.3(i)) as a reasonable certainty in the minds of competent scientists that the substance is not harmful under its intended conditions of use. The specific data and information that demonstrate safety depend on the characteristics of the substance, the estimated dietary intake, and the population that will consume the substance.
In what way are the criteria for the use of a substance to be GRAS different from that for the approved use of a food additive? A GRAS substance is distinguished from a food additive on the basis of the common knowledge about the safety of the substance for its intended use. As FDA discussed in a proposed rule to establish a voluntary notification program for GRAS substances (62 Fed. Reg. 18938; April 17, 1997), the data and information relied on to establish the safety of the use of a GRAS substance must be generally available (e.g., through publication in the scientific literature) and there must be a basis to conclude that there is consensus among qualified experts about the safety of the substance for its intended use. Thus, the difference between use of a food additive and use of a GRAS substance relates to the widespread awareness of the data and information about the substance, i.e., who has access to the data and information and who has reviewed those data and information. For a food additive, privately held data and information about the use of the substance are sent by the sponsor to FDA and FDA evaluates those data and information to determine whether they establish that the substance is safe under the conditions of its intended use (21 CFR 171.1).
For a GRAS substance, generally available data and information about the use of the substance are known and accepted widely by qualified experts, and there is a basis to conclude that there is consensus among qualified experts that those data and information establish that the substance is safe under the conditions of its intended use. (proposed 170.36 (c)(4)(i)(C))
If an ingredient is GRAS for one use, is it GRAS for all uses? Not necessarily. Under section 201(s) of the Act, it is the use of a substance, rather than the substance itself, that is eligible for the GRAS exemption (62 Fed. Reg. 18939; April 17, 1997). A determination of the safety of the use of an ingredient includes information about the characteristics of the substance, the estimated dietary intake under the intended conditions of use, and the population that will consume the substance (proposed 21 CFR 170.36 (c)(1)(iii)). Dietary intake of a substance depends on the food categories in which it will be used and the level of use in each of those food categories. For information about how FDA estimates dietary intake of a food substance, see FDA's document entitled "Estimating Exposure to Direct Food Additives And Chemical Contaminants in the Diet" Some uses of a food substance are intended for a narrowly defined population, such as newborn infants who consume infant formula as the sole item of the diet; in such a circumstance, there may be special considerations associated with that population but not with general use of the food substance.
Is a substance that is used to impart color eligible for classification as GRAS? The short answer is "No." Under section 201(s) of the Act, the GRAS provision applies to the definition of a food additive. There is no corresponding provision in the definition (in section 201(t) of the Act) of a color additive. However, under section 201(t)(1) and 21 CFR 70.3(f), the term color additive means a material that is a dye, pigment, or other substance made by a process of synthesis or similar artifice, or extracted, isolated, or otherwise derived from a vegetable, animal, mineral, or other source, and that is capable (alone or through reaction with another substance) of imparting color when added or applied to a food; except that such term does not include any material which FDA, by regulation, determines is used (or intended to be used) solely for a purpose or purposes other than coloring. Under 21 CFR 70.3(g), a material that otherwise meets the definition of color additive can be exempt from that definition on the basis that it is used or intended to be used solely for a purpose or purposes other than coloring, as long as the material is used in a way that any color imparted is clearly unimportant insofar as the appearance, value, marketability, or consumer acceptability is concerned. Given the construct of section 201(t)(1) of the Act and 21 CFR 70.3(f) and (g), the use of a substance that is capable of imparting color may constitute use as both a color additive and as a food additive or GRAS substance. For example, beta-carotene is both approved for use as a color additive (21 CFR 73.95) and affirmed as GRAS for use as a nutrient (21 CFR 184.1245); in some food products, beta-carotene may be used for both purposes.
Is a substance that is used as a dietary ingredient of a dietary supplement eligible for classification as GRAS? Under section 201(s) of the Act, the ingredients whose use is GRAS are excluded from the definition of a food additive. That definition of food additive also specifies that the term "food additive" does not include a dietary ingredient of a dietary supplement described in section 201(ff) of the Act or intended for use in a dietary supplement. Thus, it is meaningless to refer to a GRAS exclusion from the food additive definition for dietary ingredients that are already excluded from that definition. However, some dietary ingredients that may be used in a dietary supplement may also be GRAS for use in a conventional food (e.g., vitamin C; calcium carbonate).
Must FDA approve GRAS substances? No. If the use of a food substance is GRAS, it is not subject to the premarket review and approval requirement by FDA.
What is GRAS affirmation? GRAS affirmation is a process that FDA developed in the 1970s. In response to concerns raised by new information on cyclamate salts, then-President Nixon directed FDA to re-examine the safety of substances considered to be GRAS. FDA announced that the agency would evaluate, by contemporary standards of the time, the available safety information regarding substances considered to be GRAS. If the revaluation of current data confirmed that use was GRAS, FDA would promulgate a new GRAS regulation, affirming that finding. FDA also established procedures whereby an individual could petition FDA to review the GRAS status of substances that would not have been considered as part of the agency's GRAS review.
Does FDA currently have a program to affirm that one or more uses of a food substance are GRAS? In a proposed rule that FDA published in 1997 (62 Fed. Reg. 18938; April 17, 1997), FDA explained why the agency could no longer devote resources to the voluntary GRAS affirmation petition process that is described in 21 CFR 170.35(c) and proposed to abolish that process and replace it with a notification procedure. The agency has not yet issued a final rule however, and the petition procedure remains in the agency's regulations. However, at this time FDA is not committing resources to the review of GRAS affirmation petitions.
What is the GRAS notification program? The GRAS notification program is a voluntary procedure that is operating under a proposed rule issued in 1997 (62 Fed. Reg. 18938; April 17, 1997). The notification program is intended to replace the GRAS affirmation process by providing a mechanism whereby a person may inform FDA of a determination that the use of a substance is GRAS, rather than petition FDA to affirm that the use of a substance is GRAS. The submitted notice includes a "GRAS exemption claim" that includes a succinct description of the substance, the applicable conditions of use, and the statutory basis for the GRAS determination (i.e., through scientific procedures or through experience based on common use in food). A GRAS notice also includes information about the identity and properties of the notified substance and a discussion of the notifier's reasons for concluding that the substance is GRAS for its intended use.
If I choose to notify FDA of my GRAS determination, how do I do so? FDA described the procedure for submitting a GRAS notice in the proposed rule to establish the notification procedure (62 Fed. Reg. 18938; April 17, 1997). Because the proposed rule is a lengthy document, our Internet site has a specific link to the part of the proposed rule that describes the procedure. You can find both the complete proposed rule and the link to the procedure on the main page of the GRAS notification program.
Where do I send my GRAS notice? You should send your GRAS notice to the Office of Food Additive Safety (HFS-255), Center for Food Safety and Applied Nutrition, Food and Drug Administration, 5100 Paint Branch Parkway, College Park, MD 20740. [Note that our office moved since we issued the proposed rule to establish a GRAS notification procedure and, thus, the address where you should send your GRAS notice is different from the address that we published in the proposed rule that describes the procedure].
If I submit a GRAS notice, how long will it take for me to receive a response from FDA? Our goal is to respond to most GRAS notices within 180 days.
If I submit a GRAS notice about a food substance, must I wait until I receive a response from FDA before I market that substance? No. If one is correct in determining that the intended use of an ingredient is GRAS, use of the ingredient is not subject to any legal requirement for FDA review and approval. Your decision to submit a GRAS notice is voluntary, and FDA's response to a GRAS notice is not an approval. You may market a substance that you determine to be GRAS for a particular use without informing FDA or, if FDA is so informed, while FDA is reviewing that information (62 Fed. Reg. 18951; April 17, 1997). We recognize, however, that some firms prefer to know that FDA has reviewed its notice of a GRAS determination, without raising safety or legal issues, before marketing.
Does FDA have a list of substances that are used in food on the basis of the GRAS provision? FDA has several lists of GRAS substances. Importantly, these lists are not all-inclusive. Because the use of a GRAS substance is not subject to premarket review and approval by FDA, it is impracticable to list all substances that are used in food on the basis of the GRAS provision. 21 CFR Part 182 contains the remnants of a list, which FDA established in its regulations shortly after passage of the 1958 Food Additives Amendment. The list is organized according to the intended use of these substances. As part of the agency's comprehensive review of GRAS substances in the 1970s, FDA affirmed that the use of some of the ingredients on this original GRAS list is GRAS, and moved the affirmed uses of the substance to 21 CFR Part 184.
21 CFR Part 184 contains a list of substances that FDA affirmed as GRAS as direct food ingredients for general or specific uses. This list derives from the agency's 1970s comprehensive review of GRAS substances and from petitions that FDA received to affirm the GRAS status of particular uses of some food ingredients.
21 CFR Part 186 contains a list of substances that FDA affirmed as GRAS for certain indirect food uses.
FDA's Internet site also contains a list of substances that have been the subject of a notice to FDA - i.e., when a firm has notified FDA about its view that a particular use of a substance is GRAS. You can access this summary of GRAS notices, along with FDA's response, from the GRAS Notification Program page. | Tobacco, alcohol, and ... sugar? Yes, according to professors at UC San Francisco, sugar should be regulated like tobacco and alcohol in order to cut down on ailments like heart disease, high blood pressure, and fatty liver disease, the Los Angeles Times reports. “For both alcohol and tobacco, there is robust evidence that gentle ‘supply side’ control strategies" such as "taxation, distribution controls, [and] age limits" are beneficial to society, they write in the journal Nature. Sugar also "meets the same criteria" as alcohol for government regulation, they say: It's unavoidable, it's toxic, it can be abused, and it's bad for you. Canada and a few European countries are already taxing certain artificially sweetened foods, and Denmark is considering a sugar tax. So the USDA should at least stop listing fructose on its "Generally Recognized as Safe" list, they argue: “The food industry knows that it has a problem. With enough clamour for change, tectonic shifts in policy become powerful.” |
Product May Be Contaminated with Listeria monocytogenes
Mann Packing of Salinas, California is voluntarily recalling minimally processed vegetable products listed below because they may be contaminated with Listeria monocytogenes. Mann Packing is issuing this recall in response to a single positive result found on one of our products during random sampling by the Canadian Food Inspection Agency. Mann Packing is issuing this recall out of an abundance of caution. To date, public health officials have not reported any illnesses associated with these products.
The recalled product has the potential to be contaminated with Listeria monocytogenes, an organism which can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Although healthy individuals may suffer only short-term symptoms such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, Listeria infection can cause miscarriages and stillbirths among pregnant women.
The recalled products were distributed throughout the United States and Canada with “best if used by” dates from October 11 to October 20 listed on the front of the packaging. For recalled products distributed at retail and foodservice, product names, UPC codes and “best if used by” dates are listed below.
Mann Packing is fully cooperating with U.S. and Canadian health officials on this recall. Mann Packing is contacting all affected customers to confirm that the recalled product is removed from store shelves. Consumers who have purchased any recalled products listed below are urged not to consume them, discard them or return them to the place of purchase for a full refund. Consumers with further questions may contact Mann Packing on our 24-hour consumer line at 888-470-2681 or visit veggiesmadeeasy.com/products.
“As an owner of this company and a mom, providing safe and healthy foods to our consumers and their families is always our top priority,” said Gina Nucci, Director of Corporate Marketing. “This voluntary recall is a reflection of our commitment to ensuring the safety of our consumers.”
MANN PACKING BRAND ITEMS AFFECTED BY
PRODUCT RECALL BEST BY DATES 10/11/17-10/20/2017
Country Distributed To Brand Product Description UPC Code Best If Used By Date Canada Compliments Cauliettes Chop, 14oz bags '068820132547 10/14/2017 10/16/2017 Vegetable Platter, 24oz trays '055742534900 10/16/2017 Mann Mann's Broccoli Cole Slaw, 12 oz bags '716519013072 10/15/2017 10/16/2017 10/17/2017 Mann's Culinary Cuts Shaved Brussels Sprout, 9 oz bags '716519036859 10/14/2017 Mann's Family Favorites Broccoli Cauliflower Florets, 12 oz bags '716519013034 10/14/2017 10/15/2017 10/16/2017 Mann's Family Favorites Brussels Sprouts, 12 oz bags '716519010354 10/14/2017 10/15/2017 Mann's Family Favorites California Stir Fry, 12 oz bags '716519013065 10/14/2017 10/15/2017 10/16/2017 Mann's Family Favorites California Stir Fry, 2 lb bags '716519020186 10/14/2017 10/15/2017 10/16/2017 Mann's Family Favorites Vegetable Medley, 12 oz bags '716519013041 10/14/2017 10/16/2017 Mann's Family Favorites Vegetable Medley, 2 lb bags '716519020155 10/14/2017 10/15/2017 10/16/2017 Mann's Fiesta Vegetable Tray, 35.5 oz tray '716519020490 10/15/2017 Mann's Kale Beet Blend, 8 oz Bags '716519000270 10/14/2017 10/16/2017 Mann's Nourish Bowl Cauli Rice Curry, 11 oz Tray '716519036897 10/15/2017 Mann's Nourish Bowl Monterey Risotto, 8.75 oz Tray '716519036798 10/14/2017 Mann's Nourish Bowls Bacon Maple Delight, 7.15 oz trays '716519036934 10/12/2017 10/14/2017 10/15/2017 10/16/2017 10/18/2017 10/19/2017 Mann's Nourish Bowls Butternut Kale Risotto, 8.75 oz tray '716519036910 10/11/2017 10/12/2017 10/14/2017 10/15/2017 10/16/2017 10/18/2017 10/19/2017 Mann's Nourish Bowls Cauli Rice Curry, 11 oz trays '716519036903 10/11/2017 10/12/2017 10/14/2017 10/15/2017 10/16/2017 10/18/2017 Mann's Nourish Bowls Sesame Sriracha, 12 oz Tray '716519036811 10/13/2017 10/16/2017 Mann's Nourish Bowls Sesame Sriracha, 12 oz trays '716519036828 10/12/2017 10/13/2017 10/15/2017 10/16/2017 10/17/2017 10/19/2017 Mann's Nourish Bowls Southwest Chipotle, 10.5 oz trays '716519036866 10/12/2017 10/13/2017 10/14/2017 10/15/2017 10/16/2017 10/18/2017 10/19/2017 Mann's Power Blend, 10 oz bags '716519013119 10/14/2017 10/16/2017 10/17/2017 Mann's Rainbow Salad, 12 oz bags '716519013089 10/15/2017 10/16/2017 10/17/2017 Mann's Vegetable Tray, 2.5 lb tray '716519014079 10/14/2017 10/15/2017 10/16/2017 Mann's Vegetable Tray, 54 oz tray '716519014055 10/15/2017 Mann's Culinary Cuts Mann's Culinary Cuts Cauliettes Chopped Cauliflower, 14 oz bags '716519069017 10/14/2017 10/15/2017 10/16/2017 Mann's Culinary Cuts Shaved Brussels Sprout, 9 oz bags '716519036859 10/14/2017 10/15/2017 Mann's Family Favorites Mann's Family Favorites Cauliflower Florets, 10 oz bags '716519014031 10/15/2017 10/16/2017 Mann's Snacking Favorites Mann's Snacking Favorites Veggie Hummus Tray, 16.5 oz tray '716519020582 10/14/2017 10/15/2017 10/16/2017 Mann's Snacking Favorites Veggie Ranch Tray, 16.5 oz tray '716519020605 10/14/2017 10/15/2017 10/16/2017 Western Family Spicy Southwester Kale Kit, 22.8 OZ bags '062639352301 10/13/2017 Vegetable Medley, 2 LB bags 062639324810 10/14/2017 10/16/2017 West Coast Stir Fry Mix, 2 lb bags 062639324858 10/15/2017 Kale Salad Kit, 24 oz bags 062639345938 10/14/2017 10/16/2017 Kale Caesar Kit, 14.8 OZ bags '062639352295 10/14/2017 Broccoli Slaw, 12 oz bags 062639324841 10/17/2017 USA Archer Farms Broccoli Slaw 12 OZ bags '085239343142 10/16/2017 Broccoli Cauliflower Florets, 12oz bags '085239341148 10/14/2017 10/15/2017 Broccoli Florets 12oz bags '085239319147 10/14/2017 10/15/2017 10/16/2017 Broccoli Medley 12oz Bags '085239339145 10/14/2017 10/15/2017 Brussels Sprouts, 12oz bags '085239301142 10/14/2017 Shaved Brussels Sprouts, 9oz bags '085239193143 10/15/2017 Cauliflower Florets, 10oz bags '085239030141 10/14/2017 10/15/2017 10/16/2017 HEB Broccoli Carrots, 12 OZ bags 4122097508 10/15/2017 10/16/2017 Broccoli Cauliflower, 12 OZ bags 4122097503 10/14/2017 10/15/2017 10/16/2017 Broccoli Florets, 12 OZ bags 4122097505 10/15/2017 10/16/2017 Broccoli Slaw, 12 OZ bags 4122097512 10/16/2017 10/17/2017 Shaved Brussels Sprouts Salad, 10OZ bags 4122065112 10/14/2017 10/15/2017 Veggie Toss Kit Caulibit Mushroom Sauce, 11oz bags 4122017706 10/15/2017 10/16/2017 Caulibits Chopped Cauliflower, 14oz bags 4122009327 10/15/2017 10/16/2017 Cauliflower Florets, 10 OZ bags 4122032278 10/15/2017 10/16/2017 Fiesta Salad, 12 OZ bags 4122097501 10/14/2017 10/16/2017 10/17/2017 Power Slaw, 10 OZ bags 4122083223 10/14/2017 10/17/2017 Stir Fry Medley, 12 OZ bags 4122097504 10/14/2017 10/16/2017 Vegetable Medley, 12 OZ bags 4122097506 10/14/2017 10/15/2017 10/16/2017 Little Salad Bar Broccoli Florets, 12 OZ bags '041498216030 10/15/2017 Broccoli Slaw, 12 OZ bags '041498216047 10/16/2017 Mann Mann's Brussels Sprouts, 2LB bags '716519020308 10/12/2017 10/14/2017 Mann's Broccoli Cole Slaw, 1 lb bags '716519011009 10/15/2017 10/17/2017 Mann's Broccoli Cole Slaw, 12 oz bags '716519013072 10/14/2017 10/15/2017 10/16/2017 10/17/2017 Mann's Culinary Cuts Shaved Brussels Sprout, 9 oz bags '716519036859 10/12/2017 10/13/2017 10/14/2017 10/15/2017 10/16/2017 10/18/2017 10/19/2017 Mann's Family Favorites Broccoli Carrots, 12 oz bags '716519013058 10/14/2017 10/15/2017 10/16/2017 Mann's Family Favorites Broccoli Cauliflower Florets, 12 oz bags '716519013034 10/14/2017 10/15/2017 10/16/2017 Mann's Family Favorites Broccoli Cauliflower Florets, 16 oz bags '716519012174 10/14/2017 10/16/2017 Mann's Family Favorites Broccoli Wokly, 1 lb bags '716519010163 10/14/2017 10/16/2017 Mann's Family Favorites Broccoli Wokly, 12 oz bags '716519013010 10/14/2017 10/15/2017 10/16/2017 Mann's Family Favorites Brussels Sprouts, 12 oz bags '716519010354 10/12/2017 10/14/2017 10/15/2017 Mann's Family Favorites California Stir Fry, 1 lb bags '716519012181 10/14/2017 10/16/2017 Mann's Family Favorites California Stir Fry, 12 oz bags '716519013065 10/14/2017 10/15/2017 10/16/2017 Mann's Family Favorites California Stir Fry, 2 lb bags '716519020186 10/14/2017 10/15/2017 10/16/2017 Mann's Family Favorites Vegetable Medley, 1 lb bags '716519012150 10/14/2017 10/15/2017 10/16/2017 Mann's Family Favorites Vegetable Medley, 12 oz bags '716519013041 10/14/2017 10/16/2017 Mann's Family Favorites Vegetable Medley, 2 lb bags '716519020155 10/14/2017 10/15/2017 10/16/2017 Mann's Fiest Vegetable Tray, 35.5 oz tray '716519088728 10/14/2017 10/15/2017 10/16/2017 Mann's Fiesta Vegetable Tray, 35.5 oz tray '716519020490 10/14/2017 10/15/2017 Mann's Kale Beet Blend, 8 oz Bags '716519000270 10/16/2017 '716519000287 10/14/2017 10/15/2017 10/16/2017 Mann's Nourish Bowl Cauli Rice Curry, 11 oz Tray '716519036897 10/11/2017 10/12/2017 10/13/2017 10/14/2017 10/15/2017 10/16/2017 10/18/2017 10/19/2017 Mann's Nourish Bowl Monterey Risotto, 8.75 oz Tray '716519036798 10/11/2017 10/12/2017 10/13/2017 10/14/2017 10/15/2017 10/16/2017 10/18/2017 10/19/2017 Mann's Nourish Bowls Bacon Maple Brussels, 7.15 oz Tray '716519036941 10/12/2017 10/13/2017 10/14/2017 10/15/2017 10/16/2017 10/17/2017 10/18/2017 10/19/2017 10/20/2017 Mann's Nourish Bowls Bacon Maple Delight, 7.15 oz trays '716519036934 10/12/2017 10/14/2017 10/18/2017 10/19/2017 Mann's Nourish Bowls Butternut Kale Risotto, 8.75 oz tray '716519036910 10/11/2017 10/12/2017 10/14/2017 10/15/2017 10/18/2017 10/19/2017 Mann's Nourish Bowls Cauli Rice Curry, 11 oz trays '716519036903 10/11/2017 10/12/2017 10/16/2017 10/18/2017 Mann's Nourish Bowls Sesame Sriracha, 12 oz Tray '716519036811 10/12/2017 10/13/2017 10/15/2017 10/16/2017 10/17/2017 10/19/2017 10/20/2017 Mann's Nourish Bowls Sesame Sriracha, 12 oz trays '716519036828 10/12/2017 10/13/2017 10/15/2017 10/16/2017 10/19/2017 Mann's Nourish Bowls Southwest Chipotle, 10.5 oz trays '716519036866 10/12/2017 10/13/2017 10/14/2017 10/15/2017 10/18/2017 10/19/2017 '716519036958 10/18/2017 10/19/2017 Mann's Power Blend, 10 oz bags '716519013119 10/14/2017 10/16/2017 10/17/2017 Mann's Power Blend, 20 oz bags '716519000416 10/17/2017 Mann's Rainbow Salad, 12 oz bags '716519013089 10/14/2017 10/15/2017 10/16/2017 10/17/2017 Mann's Vegetable Tray, 2.5 lb tray '716519014079 10/14/2017 10/15/2017 10/16/2017 Mann's Broccoli Florets, 3 lb bags '716519030113 10/18/2017 10/20/2017 Mann Culinary Cuts Mann's Culinary Cuts Cauliettes Chopped Cauliflower, 14 oz bags '716519069017 10/14/2017 10/15/2017 10/16/2017 Mann's Culinary Cuts Shaved Brussels Sprout, 9 oz bags '716519036859 10/14/2017 10/15/2017 Mann's Family Favorites Mann's Family Favorites Cauliflower Florets, 10 oz bags '716519014031 10/14/2017 10/15/2017 10/16/2017 Mann's Snacking Favorites Mann's Snacking Favorites Cheddar Pretzel Veggie Tray, 19.6 oz tray '716519020445 10/15/2017 10/16/2017 Mann's Snacking Favorites Honey Turkey Cheddar, 20.3 oz Tray '716519020483 10/14/2017 10/15/2017 10/16/2017 Mann's Snacking Favorites Hummus Tray, 16.5 oz trays '716519014758 10/14/2017 10/15/2017 10/16/2017 Mann's Snacking Favorites Veggie Hummus Tray, 16.5 oz tray '716519020582 10/15/2017 Mann's Snacking Favorites Veggie Ranch Tray, 16.5 oz bags '716519020575 10/14/2017 10/15/2017 10/16/2017 Signature Farms Meat & Cheese Tray, 36 OZ trays '021130110964 10/14/2017 10/16/2017 Broccoli Cauliflower Florets 4/28 OZ bags '021130984497 10/14/2017 10/15/2017 10/16/2017 Broccoli Cauliflower Florets 6/12 OZ bags 021130983407 10/14/2017 10/15/2017 10/16/2017 Broccoli Slaw 12 OZ bags 021130983391 10/15/2017 10/17/2017 Broccoli Stir Fry 28 OZ bags '021130984459 10/14/2017 10/15/2017 10/16/2017 Broccoli Florets 12 OZ bags '021130983407 10/14/2017 10/15/2017 Broccoli Stir Fry, 12 OZ bags 021130983322 10/14/2017 10/15/2017 10/16/2017 Veggie Tray with Ranch Dip, 24 OZ. trays '021130299553 10/14/2017 10/15/2017 10/16/2017 Veggie Tray with Ranch Dip, 24OZ (NS) trays '021130299553 10/14/2017 10/15/2017 Veggie Tray with Ranch Dip, 54 OZ. trays 21130299560 10/16/2017 Vegetable Medley, 28 OZ bags '021130984466 10/14/2017 10/15/2017 10/16/2017 Vegetable Medley, 12 OZ bags 021130983322 10/14/2017 10/15/2017 10/16/2017 Veggie & Hummus Tray (NS), 16.5OZ trays '021130984282 10/14/2017 Veggie & Hummus Tray, 16.5 OZ trays '021130984282 10/14/2017 10/15/2017 10/16/2017 Trader Joe's Kohlrabi Salad Blend, 10 OZ Bags '0058 6146 10/14/2017 10/15/2017 10/16/2017 Walmart Broccoli Cauliflower Florets, 12 OZ bags '681131328852 10/14/2017 10/15/2017 10/16/2017 Broccoli Florets, 32 oz bags '681131122344 10/14/2017 10/16/2017 Broccoli Florets, 12 OZ bags '681131328845 10/14/2017 10/15/2017 10/16/2017 Broccoli Slaw, 16 OZ bags '681131148207 10/14/2017 10/15/2017 Stir Fry Medley, 12 OZ bags '681131457460 10/13/2017 10/14/2017 10/15/2017 10/16/2017 Cauliflower Florets, 10 OZ bags '681131091381 10/14/2017 10/15/2017 10/16/2017 Cauliflower 6/16 oz WM '681131122320 10/14/2017 10/15/2017 10/16/2017 Super Blend, 10oz bags '681131148368 10/13/2017 10/15/2017 10/16/2017 Vegetable Medley, 2LB bags '681131457378 10/14/2017 10/15/2017 10/16/2017 Vegetable Medley 9/12 OZ WM '681131328791 10/14/2017 10/15/2017 10/16/2017 USA (Foodservice) Cross Valley Farms Shaved Brussles Sprouts, 2 lb bags 10/14/2017 10/15/2017 Cauliflover Florets, 3 LB bags ' 10/12/2017 10/14/2017 Spiral Cut Kohlrabi, 2 LB bags ' 10/14/2017 10/17/2017 Superfood Slaw, 2 LB bags ' 10/13/2017 10/15/2017 10/16/2017 Mann Mann's Broccoli Florets, 3 lb bags ' 10/16/2017 273 Julian Code 10/18/2017 275 Julian Code 10/19/2017 276 Julian Code Mann's Broccoli Florets, 6/3 lb bags ' 10/16/2017 273 Julian Code 10/18/2017 275 Julian Code 10/19/2017 276 Julian Code Broccoli Cole Slaw, 4x3 lb bags ' 10/14/2017 271 Julian Code 10/16/2017 273 Julian Code Shaved Brussels Sprouts, 5/2 lb bags ' 10/14/2017 271 Julian Code 10/15/2017 272 Julian Code Cauliflower Florets, 2/3 LB PIZZA CUT, bags ' 10/19/2017 276 Julian Code Mann's Broccoli Florets, 3 lb bags '716519030113 10/14/2017 271 Julian Code 10/16/2017 273 Julian Code 10/18/2017 275 Julian Code 10/19/2017 276 Julian Code Mann's Family Favorites Cauliflower Florets, 3 lb bags '716519020292 10/14/2017 271 Julian Code 10/16/2017 273 Julian Code Veggie Power Blend 4/2 LB SS ' 10/13/2017 270 Julian Code 10/14/2017 271 Julian Code 10/15/2017 272 Julian Code 10/17/2017 274 Julian Code Sysco Natural Cauliflower Florets 2/3 LB MIN bags ' 10/19/2017 276 Julian Code Canada Mann Broccoli Cole Slaw 4x3 lb bags ' 10/14/2017 271 Julian Code (Foodservice) Mann's Broccoli Florets, 3 lb bags '716519030113 10/16/2017 273 Julian Code 10/18/2017 275 Julian Code Veggie Power Blend 4/2 LB SS ' 10/14/2017 271 Julian Code 10/17/2017 274 Julian Code
### ||||| This morning, we shared a recall notice from grocery chain Trader Joe’s that its kohlrabi salad mix had been recalled after a supplier let the company know about potential listeria contamination. It turns out that recall was much bigger, involving other retailers including Albertsons, H-E-B, and Walmart, and vegetables that are less fun to say than “kohlrabi.”
Updated 10/25/17 with information about recalls from King Soopers, City Market, Pacific Coast Fruit, and New Seasons.
Updated 10/23/17 with information about additional recalls for more brands: Albertsons, Alaska Carrot, H-E-B, Meijer, Ready. Chef. Go!, Safeway, Whole Foods, and Vons.
What happened
The company behind the recalled products, Mann Packing, exports some products to Canada, and routine testing of those exports turned up Listeria. While there have been no reported or confirmed illnesses from these products, note that the incubation period for Listeria ranges from three to 70 days, so people could get sick more than two months from now.
What to look for
There are a lot of products included in this recall. They were sold under Mann’s own brand name, and also under the store brands of Albertsons, Archer Farms (Target), Alaska Carroy, H-E-B, Little Salad Bar, Meijer, Ready. Chef. Go!, Safeway, Signature Farms (Albertsons), Trader Joe’s, Walmart, Western Family, Whole Foods, and Vons. You can find a table with all of the items listed at the bottom of this post, and images of the Mann’s packaging for each product is available on the company’s website.
What to do
Mann’s asks that you throw affected products away or return them to the store where they were purchased for a refund. If you have any questions about the recall or the products, contact the company at 888-470-2681 or use its email form. ||||| Story highlights Possible listeria contamination prompted a major produce supplier to recall products
Certain people are at increased risk of serious infection, including pregnant women and newborns
(CNN) A leading vegetable supplier in California, Mann Packing, voluntarily recalled products that might have been contaminated with a harmful bacteria called listeria, the company announced last week.
The recall affects packaged produce at multiple supermarkets across the United States and Canada including Walmart, Whole Foods , Trader Joe's, Meijer, Albertson's and Safeway.
"Mann Packing is issuing this recall out of an abundance of caution," the company said in a statement, adding that it is cooperating with US and Canadian health officials to recall the products.
No illnesses have been linked to the products, the company said. The contamination risk was picked up by the Canadian Food Inspection Agency through random sampling.
The affected items were listed as "best if used by" October 11 to October 20. Customers should not consume these items but should discard them or return them to the place of purchase. ||||| A nationwide vegetable recall has not only hit Meijer stores in Michigan, but also Walmart, Trader Joe's and Target, according to the Food and Drug Administration.
Mann Packing announced the recall of several of its products due to the Canadian Food Inspection Agency found one of the company's products to be contaminated with Listeria monocytogenes. The inspection was said to be from a random sample.
The FDA reports there have been no known instances of illnesses related to the recall.
The recall includes more than 30 veggie products sold between Sept. 27 and Oct. 20 at Meijer stores in Michigan, Ohio, Indiana, Illinois, Kentucky and Wisconsin. It also affects products at Walmart, Target, Trader Joe's, among others.
Those recalled under the Archer Farms brand are the ones sold through Target.
The recalled products were distributed in the U.S. and Canada had used by dates between Oct. 11 and Oct. 20. For a full list of the recalled products in the U.S. and Canada, click here.
Target : 12-oz. bags of broccoli slaw, broccoli cauliflower florets, broccoli medley, brussels sprouts, 9-oz. bags of shaved brussels sprouts and 10-oz. bags of cauliflower florets.
: 12-oz. bags of broccoli slaw, broccoli cauliflower florets, broccoli medley, brussels sprouts, 9-oz. bags of shaved brussels sprouts and 10-oz. bags of cauliflower florets. Trader Joe's: 10-oz. bags of kohlrabi salad blend.
10-oz. bags of kohlrabi salad blend. Walmart: 12-oz. bags of broccoli cauliflower florets, broccoli florets and stir-fry medley, 32-oz. bags of broccoli florets, 16-oz. bags of broccoli slaw, 10-oz. bags of cauliflower florets, and super blend 16-oz. bags of cauliflower and two-pounds veggie medley bags.
Check out a gallery of the recalled products and UPC codes at the top of this page. Those who bought any of the affected products are advised not to eat them, return them at the place of purchase and to get a refund.
Listeria monocytogenes can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems.
Although healthy people may suffer short-term symptoms like high fever, severe headache, stiffness, nausea, abdominal pain, and diarrhea, an infection can cause miscarriages and stillbirths among pregnant women.
"As an owner of this company and a mom, providing safe and healthy foods to our consumers and their families is always our top priority," Gina Nucci, Director of Corporate Marketing for Mann Packing, said through an FDA release.
"This voluntary recall is a reflection of our commitment to ensuring the safety of our consumers." | Salad mixes and other "minimally processed" vegetable products from a California supplier have been recalled at outlets across the US out of what Mann Packing says is an "abundance of caution." The supplier voluntarily recalled the products, which have "best if used by" dates of Oct. 11 to Oct. 20, after food inspectors in Canada detected the listeria bacteria in a randomly chosen sample, CNN reports. The Food and Drug Administration's list of affected products sold in the US and Canada is here. The list has expanded to include products sold at Walmart, Target, and Trader Joe's, among other outlets, reports MLive.com. The affected products include store brands as well as the Mann brand. Consumers have been advised to either throw the products away or return them for a refund. There have been no confirmed illnesses linked to the possibly contaminated products, though the incubation period for listeria is up to 70 days, meaning cases could surface more than two months from now, Consumerist reports. Listeria kills hundreds of people in the US every year, with pregnant women particularly at risk. Sandy Eskin, leader of the Safe Food Project at Pew Charitable Trusts, tells Quartz that the massive recall is actually good news, since it shows the food-safety system is working to stop potential outbreaks before people get sick. |
RS21539 -- Vacancies and Special Elections: 108th Congress Updated January 12, 2005 Vacancies in Congress occur when a Senator or Representative dies, resigns, declines to serve, or is expelled orexcluded by either house. The Constitution requires that vacancies in both houses be filled by special election; butinthe case of the Senate, it empowers the state legislatures to provide for temporary appointments to the Senate by thegovernor until special elections can be scheduled. (1) Senate. Prevailing practice for Senate vacancies is for state governors to fill them by appointment, with the appointee serving until a special election can be held. The winnerofthe special election then serves for the balance of the term. In the event that the seat becomes vacant between thetimeof a statewide election and the expiration of the term, the appointee usually serves the remainder of the term. Oregonand Wisconsin are the only states that do not provide for gubernatorial appointments; their Senate vacancies canonlybe filled by election. House of Representatives. All House vacancies are filled by special election. Scheduling for special elections is largely dependent upon the amount of time remaining beforethenext regular elections for the House. When a vacancy occurs during the first session of Congress, a special electionisalways scheduled for the earliest possible time, preferably to coincide with elections regularly scheduled for otherpurposes in the district. If, however, a seat becomes vacant within six months of the end of a Congress, some states hold a special election forthe balance of the congressional term on the same day as the regular election. Winners of special elections in thesecases are sometimes not sworn in immediately as Members of the House, Congress having often adjourned sine die before election day. They are, however, accorded the status of incumbent Representatives for the purposes ofseniority, office selection, and staffing. Other states do not provide for a special election in these circumstances,andthe seat remains vacant for the balance of that particular Congress. For additional information, see CRS Report 97-1009(pdf) , House and Senate Vacancies: How Are They Filled? by Sula P.Richardson and [author name scrubbed]. Table 1. Special Elections in the U.S. House of Representatives: 108th Congress(2003-2004) a In California, Rep. Robert T. Matsui died on Jan. 1, 2005, three days before the convening of the 109th Congress, towhich he had been reelected. A special primary election to fill the vacancy will be held on Mar. 8, 2005. The namesof all candidates, regardless of party affiliation, will appear on the March ballot. If no candidate receives a majorityofvotes, the top vote-getters from each party will advance to a special runoff election on May 3, 2005. b Three days before the 108th Congress convened on January 7, 2003, a special election was held to fill the vacancycaused during the 107th Congress by the death of Rep. Patsy Mink, who had been re-elected posthumously to the 108thCongress. (Rep. Patsy Mink died two days after the deadline for replacing her name on the ballot for re-electionto the108th Congress.) On January 4, 2003, Ed Case defeated 43 other candidates in a special election tofill that vacancy. The other candidates in the open special election were: Kabba Anand (N), Whitney T. Anderson, Paul Britos (D),John S. (Mahina) Carroll (R), Brian G. Cole (D), Charles (Lucky) Collins (D), Doug Fairhurst (R), Frank F. Fasi(R),Michael Gagne (D), Alan Gano (N), Carolyn Martinez Golojuch (R), G. Goodwin (G), Richard H. Haake (R), ChrisHalford (R), Colleen Hanabusa (D), S. J. Harlan (N), Herbert Jensen (D), Kekoa D. Kaapu (D), MoanaKeaulana-Dyball (N), Kimo Kaloi (R), Jeff Mallan (L), Barbara C. Marumoto (R), Sophie Mataafa (N), MattMatsunaga (D), Bob McDermott (R), Mark McNett (N), Nick Nikhilananda (G), Richard (Rich)Payne (R), John(Jack) Randall (N), Jim Rath (R), Mike Rethman (N), Art P. Reyes (D), Pat Rocco (D), Bartle Lee Rowland (N),BillRussell (N), John L. Sabey (R), Nelson J. Secretario (R), Steve Sparks (N), Steve Tataii (D), Marshall (Koo Koo)Turner (N), Dan Vierra (N), Clarence H. Weatherwax (R), and Solomon (Kolomona) Wong (N). Prior to winningtheJanuary 4, 2003 special election, Mr. Case had also won the special election that had been held on November 30,2002, to fill the remainder of Rep. Mink's term for the 107th Congress. He was not sworn in,however, as the 107thCongress was not in session. (For further information on the 107th Congress vacancy and specialelection see CRS Report RS20814(pdf) , Vacancies and Special Elections: 107th Congress .) c In Kentucky, Rep. Ernie Fletcher resigned from the House on December 9, 2003, and was sworn in as Governor ofKentucky. A special election to fill the vacancy caused by Rep. Fletcher's resignation was held on February 17,2004,at which time the House was in recess until Feb. 24, 2004. Representative Albert Benjamin "Ben" Chandler wassworn in on Feb. 24, 2004. d In Nebraska, no special election was held to fill the seat vacated by Rep. Doug Bereuter, who resigned from theHouse on Aug. 31, 2004. The vacancy continued throughout the remainder of the 108th Congress. e In North Carolina, a special election to fill the vacancy in the 1st congressional district was held on July 20, 2004, tocoincide with the state's primary elections. f In South Dakota, a special election to fill the vacancy in the at-large district was held on June 1, 2004, to coincidewith the state's primary elections. g In Texas for the special election, which was held on May 3, 2003, the names of 17 candidates (regardless of party)appeared on a single ballot and the voters could choose any of these candidates: Richard Bartlett (R), John D. Bell(R), Jamie Berryhill (R) William M. (Bill) Christian (R), Mike Conaway (R), Thomas Flournoy (C), Kaye Gaddy(D),E.L. "Ed" Hicks (I), Carl H. Isett (R), David R. Langston (D), Donald May (R), Randy Neugebauer (R), JuliaPenelope (G), Richard (Chip) Peterson (L), Jerri Simmons-Asmussen (D), Vickie Sutton (R), and Stace Williams(R). A candidate who received a majority of the votes would have been elected to the office. Because no candidatereceived a majority of the votes, a special runoff election was held on June 3, 2003, and the names of the two topvotegetters were on that ballot. Key to Abbreviations for Party Affiliation C Constitution D Democratic G Green I Independent L Libertarian N Nonpartisan R Republican | There were seven vacancies in the 108th Congress, all in the House. One,in the 2nd District of Hawaii, was caused by the death of the incumbent, who had been re-electedposthumously to the108th Congress. Five other vacancies were caused by the resignation of the incumbent in the19th District of Texas, the6th District of Kentucky, the at-large district of South Dakota, the 1st District of NorthCarolina, and the 1st District ofNebraska. The seventh vacancy, in the 5th District of California, was caused by the death of theincumbent three daysbefore the 109th Congress, to which he had been reelected, convened. The first vacancy was filled byspecial electionon January 4, 2003, three days before the 108th Congress convened. For further information, see CRS Report RS20814(pdf), Vacancies and Special Elections: 107th Congress. The second vacancy wasfilled by special election onJune 3, 2003. The third vacancy was filled by special election on February 17, 2004. The fourth vacancy was filledby special election on June 1, 2004. The fifth vacancy was filled by special election on July 20, 2004. The vacancyin the 1st District of Nebraska continued throughout the remainder of the 108th Congress. A special primary election tofill the vacancy in the 5th District of California for the 109th Congress will be held onMarch 8, 2005. If no candidatereceives a majority of votes, a special runoff election will be held on May 3, 2005. This report records vacanciesinthe offices of U.S. Representative and Senator that occurred during the 108th Congress. It providesinformation on theformer incumbents, the process by which these vacancies are filled, and the names of Members who filled the vacantseats. This report will not be updated. For additional information, see CRS Report 97-1009(pdf), House andSenateVacancies: How Are They Filled? |
The Constitution gives Congress the power of the purse, that is, the power to spend, collect revenue, and borrow. It does not, however, establish procedures by which Congress must consider budget-related legislation. Instead, it states that each chamber may "determine the Rules of its Proceedings." Over time, Congress has therefore developed various rules and practices to govern consideration of budgetary legislation. The basic framework that is used today for congressional consideration of budget policy was established in the Congressional Budget and Impoundment Control Act of 1974 (the Budget Act). This act provides for the annual adoption of a concurrent resolution on the budget as a mechanism for setting forth aggregate levels of spending, revenue, the surplus or deficit, and public debt. The Budget Act also established standing committees in both chambers of Congress with jurisdiction over, among other things, the concurrent resolution on the budget. This report describes the structure and responsibilities of the Committee on the Budget in the House of Representatives. The rules of the House require that the Budget Committee's membership be composed of five members from the Committee on Ways and Means, five members from the Committee on Appropriations, and one member from the Committee on Rules. In addition, House rules require that the committee include one member designated by the majority party leadership and one member designated by the minority party leadership. The Committee on Ways and Means exercises sole jurisdiction over revenue-raising matters, and the Appropriations Committee exercises sole jurisdiction over discretionary spending. Granting these committees guaranteed representation on the Budget Committee provides them with an avenue for continuing involvement with decisions affecting their committee's jurisdiction. The Congressional Budget Act originally provided for 23 members to serve on the Budget Committee. Over time, the number of Budget Committee members has varied, and is currently 39. Under House rules, members of the House Budget Committee may not serve more than four in any six successive Congresses. Originally, the Budget Act limited service on the Budget Committee to two in any five successive Congresses. The rotating and representational membership on the Budget Committee affords Members of the House an increased level of participation in the activities of the Budget Committee. The House Democratic Caucus outlines additional term limits for its members serving on the House Budget Committee. Its rules state that no Member, other than the Member designated by leadership, shall serve more than three Congresses in any period of five successive congresses. The House Republican Conference has no comparable rule. Both Democrats and Republicans designate the Budget Committee as a nonexclusive committee. In general, this means that besides the House rule restricting any Member from serving on more than two standing committees, few restrictions apply to Budget Committee members regarding their other committee assignments. Although the Budget Act does not prohibit the creation of subcommittees, the Budget Committee has never had them. The committee, however, sometimes establishes ad hoc task forces to study specific issues. For example, there have been task forces on such subjects as entitlements, tax policy, economic policy, and budget reform. The jurisdiction of the House Budget Committee is derived from the Budget Act as well as House Rule X. This jurisdiction is protected under the Budget Act, which states that no bill, resolution, amendment, motion, or conference report dealing with any matter within the jurisdiction of the Budget Committee shall be considered in the House unless it is a bill or resolution that has been reported by the Budget Committee or unless it is an amendment to a bill or resolution reported by the Budget Committee. House Rule X, clause 1(d) states that the Budget Committee will have jurisdiction over the concurrent resolution on the budget; other matters required to be referred to it pursuant to the Budget Act; establishment, extension, and enforcement of special controls over the federal budget; and the budget process generally. Over the years, the duties and responsibilities of the Budget Committee have been established in statute, as well as House Rules. This report discusses the Budget Committee's responsibilities under the following categories: the budget resolution, reconciliation, budget process reform, oversight of the Congressional Budget Office, revisions of allocations and adjustments, and scorekeeping. The Budget Committee is responsible for developing the annual budget resolution. The budget resolution is a mechanism for setting forth aggregate levels of spending, revenue, the deficit or surplus, and public debt. Its purpose is to create enforceable parameters within which Congress can consider legislation dealing with spending and revenue. The budget resolution also often includes other matters such as reconciliation directives or procedures necessary to carry out the Budget Act. The Budget Committee can use the budget resolution as a means for initiating changes in tax and spending policy, but the other House committees having jurisdiction over those issues would be responsible for any legislation that would implement those changes. So rather than drafting program- or agency-oriented legislation as most other committees do, the Budget Committee, similar to the House Rules Committee, devotes most of its time to developing the parameters within which the House may consider legislation. In developing the budget resolution, the Budget Committee examines a budget outlook report that includes baseline budget projections presented to Congress by the Congressional Budget Office (CBO). The Budget Committee also receives and examines the budget request submitted by the President, and then holds hearings at which they hear testimony from officials who justify and explain the President's budget recommendations. These include the Director of the Office of Management and Budget (OMB), the Chair of the Federal Reserve Board, and secretaries of each department, as well as other presidential advisors. In addition, CBO issues a report that analyzes the President's budget and compares it to CBO's own economic and technical assumptions. The Budget Committee also gathers information from the other committees of the House. The Budget Committee holds hearings at which individual Members testify. In addition, Committees each submit their "views and estimates" to the Budget Committee, providing information on the preferences and legislative plans of that committee regarding budget matters within its jurisdiction. These "views and estimates" must include an estimate of the total amount of new budget authority and budget outlays for federal programs that are anticipated for all bills and resolutions within the committee's jurisdiction that will be effective during that fiscal year. House rules require that committees submit "views and estimates" to the Budget Committee within six weeks of the President's budget submission or at such time as the Budget Committee may request. During deliberation on the budget resolution, it has been the policy of the Budget Committee to use as a starting point the baseline data prepared by CBO. The Budget Committee then develops and marks up the budget resolution before reporting it to the full House. In marking up the budget resolution, the Budget Committee first considers budget aggregates, functional categories, and other appropriate matter, allowing the offering of amendments. During mark-up, the Budget Committee allows subsequent amendments to be offered to aggregates, functional categories, or other appropriate matters, even if they have already been amended in their entirety. Following adoption of the aggregates, functional categories, and other appropriate matter, the text of the budget resolution is considered for amendment. At the completion of this, a final vote on reporting the budget resolution occurs. Because the budget resolution is a concurrent resolution, once the House and Senate each adopt their own version of the budget resolution, they typically agree to go to conference to reconcile the differences between the two versions. Members of the Budget Committee represent the House in these inter-chamber negotiations. Upon agreement on a conference report, a joint explanatory statement is written to accompany the report. Within this joint explanatory statement are allocations required under Section 302(a) of the Budget Act that establish spending limits for each committee. The text of the budget resolution establishes congressional priorities by dividing spending among the 20 major functional categories of the federal budget. These 20 functional categories do not correspond to the committee jurisdictions under which the House or Senate operate. As a result, the spending levels in the 20 functional categories must subsequently be allocated to the committees having jurisdiction over spending. These totals are referred to as 302(a) allocations and hold committees accountable for staying within the spending limits established by the budget resolution. Members of the conference committee and their staff work to determine appropriate 302(a) allocations to be included in the joint explanatory statement accompanying the conference report on the budget resolution. Budget resolutions sometimes include reconciliation instructions that instruct committees to develop legislation that will change current revenue or direct spending laws to conform with policies established in the budget resolution. The Budget Committee can choose to include this in the budget resolution that they report to the full chamber. If the adopted budget resolution does include reconciliation instructions, committees respond by drafting legislative language to meet their specified targets. The Budget Committee is responsible for packaging "without any substantive revision" the legislative language recommended by committees into one or more reconciliation bills. If only a single committee is instructed to recommend reconciliation changes, then those changes are reported directly to the chamber without packaging by the Budget Committee. The Budget Committee is not permitted to revise substantively the reconciliation legislation as recommended by the instructed committees, even if a committee's recommendations do not reach the dollar levels in the reconciliation instructions included in the budget resolution. The Budget Committee, however, may sometimes collaborate with House leadership to develop alternatives that may be offered as floor amendments to the reconciliation bill. Since 1995, House Rules have provided that the Budget Committee shall have jurisdiction over the budget process generally. This includes studying on a continuing basis proposals to improve or reform the budget process, including both singular and comprehensive changes to the budget process. These rule changes can be proposed as a provision in the budget resolution, or as a separate measure. When considering budget reform, the Budget Committee may create a task force (the Budget Committee does not have subcommittees, but sometimes creates ad hoc task forces to address specific issues) to research potential reform issues. The task force may hold hearings where they listen to testimony from current and past Members of Congress, as well as representatives from the Administration, to help determine the need for reform. For example, during the 105 th Congress the Budget Committee created a Task Force on Budget Process, also known as the Nussle-Cardin Task Force, that examined budget reform issues. This task force held hearings and eventually released several recommendations, including making the budget resolution a joint resolution. Although budget process reform measures or budget resolutions may include provisions that have an impact on House rules, jurisdiction over the rules of the House is under the Rules Committee. The Budget Act specifically provides that a budget resolution reported from the Budget Committee that includes any matter or procedure that would change any rule of the House would trigger a referral to the House Rules Committee. In addition to creating the House and Senate Budget Committees, the Budget Act also established the Congressional Budget Office. House rules state that the Budget Committee shall be responsible for oversight of the CBO. Specifically, the rules state that the Committee shall review on a continuing basis the conduct by the CBO of its functions and duties. This oversight can include hearings at which CBO's practices are examined. For example, during the 107 th Congress the House Budget Committee held a hearing titled, "CBO Role and Performance: Enhancing Accuracy, Reliability, and Responsiveness in Budget and Economic Estimates." The Budget Committee also plays a role in the selection of the Director of CBO. The Budget Act states that the Speaker of the House and the President pro tempore of the Senate shall appoint the Director of the CBO after receiving recommendations from the House and Senate Budget Committees. Provisions in individual budget resolutions, as well as the Budget Act, grant the Budget Chair (not the entire Budget Committee) the authority to revise or adjust budget levels and other matters included in the annual budget resolution in certain circumstances. For instance, Congress frequently includes provisions referred to as "reserve funds" in the annual budget resolution, which provide the chairs of the House and Senate Budget Committees the authority to adjust committee spending allocations if certain conditions are met. Typically these conditions consist of a committee reporting legislation dealing with a particular policy or an amendment dealing with that policy being offered on the floor. Once this action has taken place, the Budget Committee Chair submits the adjustment to his respective chamber. Reserve funds frequently require that the net budgetary impact of the specified legislation be deficit neutral. Deficit-neutral reserve funds provide that a committee may report legislation with spending in excess of its allocations, but require the excess amounts be offset by equivalent reductions elsewhere. The Budget Committee Chair may then increase the committee spending allocations by the appropriate amounts to prevent a point of order under Section 302 of the Budget Act. The Budget Committee Chair is also authorized to make adjustments to the budget resolution levels under the "fungibility rule." The "fungibility rule" applies when a committee has been instructed through reconciliation directions to develop legislation that will change both revenue and direct spending laws to conform with policies established in the budget resolution. Under this rule, the Budget Committee Chair is then authorized to submit for printing in the Congressional Record appropriate changes in budget resolution levels, and committee spending allocations. The Budget Act also allows for further revisions to the budget resolution. For more information on revisions and adjustments related to the budget process, see CRS Report RL33122, Congressional Budget Resolutions: Revisions and Adjustments , by [author name scrubbed]. The Budget Committee is responsible for making summary budget scorekeeping reports available to the Members of the House on at least a monthly basis. Scorekeeping is the process of measuring the budgetary effects of pending and enacted legislation against the levels recommended in the budget resolution, in general to determine if proposed legislation would violate the levels set forth in the budget resolution. If a Member raises a point of order that legislation or an amendment being considered on the floor violates fiscal limits, the Parliamentarian relies on the estimates provided by the Budget Committee in the form of scorekeeping reports to advise the presiding officer regarding whether the legislative matter is out of order. Similarly, if a member raises a point of order that legislation or an amendment violates Rule XXI, clause 10, known as the PAYGO rule, the Parliamentarian relies on estimates provided by the Budget Committee. The Budget Committee played a similar role under certain expired budget enforcement statutes such as the Balanced Budget and Emergency Deficit Control Act of 1985 (also known as the Gramm-Rudman-Hollings Act) and the Budget Enforcement Act of 1990. To assist the Budget Committee in scorekeeping, the Director of CBO is required to issue an up-to-date tabulation of congressional budget action to the Budget Committees on at least a monthly basis. Specifically, this report details and tabulates the progress of congressional action on bills and joint resolutions providing new budget authority or providing an increase or decrease in revenues or tax expenditures for each fiscal year covered by the budget resolution. It has been the policy of the Budget Committee that its scorekeeping reports be prepared by the Budget Committee staff, transmitted to the Speaker in the form of a Parliamentarian's Status Report, and printed in the Congressional Record . | The basic framework that is used today for congressional consideration of budget policy was established in the Congressional Budget and Impoundment Control Act of 1974. This act provides for the annual adoption of a concurrent resolution on the budget as a mechanism for setting forth aggregate levels of spending, revenue, and public debt. The act also established standing committees in both chambers of Congress with jurisdiction over, among other things, the concurrent resolution on the budget. This report describes the structure and responsibilities of the Committee on the Budget in the House of Representatives. House and party rules specify the composition of the committee's membership and also stipulate that most members of the House Budget Committee may not serve more than four in any six successive Congresses. Unlike most other committees, the Budget Committee does not have subcommittees. Instead, the committee sometimes establishes ad hoc task forces to study specific issues. In addition to committee structure, this report covers the House Budget Committee's responsibilities divided into categories related to the annual budget resolution, reconciliation, budget process reform, oversight of the Congressional Budget Office, revisions and adjustments of allocations, and scorekeeping. This report will be updated as needed. |
Only in France. Carla Bruni-Sarkozy, the superstar model-turned-songstress with a freewheeling lifestyle, now hands the job of first lady to a twice-divorced journalist who's the first presidential partner to enter the Elysee Palace without a ring on her finger.
This combination of three file photos shows, on the left, Carla Bruni-Sarkozy, the superstar fashion model-turned songstress with a freewheeling lifestyle, who is handing the job of France's first lady... (Associated Press)
FILE - In this May 6, 2012 file photo, French president-elect Francois Hollande kisses his companion Valerie Trierweiler after greeting crowds gathered to celebrate his election victory in Bastille Square... (Associated Press)
FILE - In this May 6, 2012 file photo, French President and UMP candidate Nicolas Sarkozy kisses his wife Carla Bruni-Sarkozy as they are greeted by supporters after casting their votes in the second... (Associated Press)
French president-elect Francois Hollande wave to supporters with his companion Valerie Trierweiler after greeting crowds gathered to celebrate his election victory in Bastille Square in Paris, France,... (Associated Press)
And as Valerie Trierweiler prepares for her new role alongside President-elect Francois Hollande, in the wings is the woman whose man she stole _ Segolene Royal, the mother of Hollande's four children and a former presidential candidate now seeking her own seat of political power.
So what's happening in the land of French officialdom, where protocol and social niceties still count? Will Trierweiler's name be listed on formal invitations to presidential events, even though she's not his spouse?
It's the head of state who decides, so where's the problem?
Intrigue, love lost, love found and power struggles accompanied the new first couple on their journey to the presidency, which Hollande takes over from Nicolas Sarkozy on May 15. The Hollande-Trierweiler couple gave each other a big kiss on the mouth at the victory fete watched by cheering thousands at the Bastille.
FOLLOWING CARLA'S FOOTSTEPS
Bruni-Sarkozy, who married the outgoing president after he divorced his second wife while in office, adapted to the job of first lady like slipping into a silver slipper.
Past romantic adventures with Mick Jagger and Eric Clapton faded into distant memory and she cultivated a low profile as France's "premiere dame," charming and disarming other heads of state.
Some think Trierweiler may do even better.
"Valerie is perfect. She's so French," Paris-based fashion writer Rebecca Voight insisted. "It's what French women see in themselves. ... She kept a respectful distance from Hollande during the campaign and also had her career, which people respect."
Privilege describes the life, past and present, of Sarkozy's Italian-born wife, who comes from a wealthy Turin family. Trierweiler's roots are more humble. One of six children, she grew up in a modest neighborhood in Angers, in western France, then studied political science at the Sorbonne.
"I didn't choose to have a public life. I chose Francois," she said in an interview with Paris-Match in October. "But I will adapt."
THE VALERIE-FRANCOIS STORY
Elegant and intelligent, Trierweiler, who has three teenage sons from her previous marriage to a colleague at the magazine Paris Match, is 10 years younger than the 57-year-old Hollande. She met Hollande years ago while covering the Socialist Party, which he headed for 11 years until 2008.
Their relationship flowered starting in 2005 as Hollande's then-partner Royal was beginning to prepare her own presidential candidacy.
Hollande and Royal maintained a pact of silence about their crumbling relationship _ broken only after she lost to Sarkozy in 2007. Royal then announced that she had asked Hollande to leave their family home.
Royal, who soldiered through Hollande's presidential campaign with occasional appearances, now wants a piece of the political pie _ as speaker of the lower house of parliament should the Socialists win June legislative elections.
As for Trierweiler, she cheered Hollande on at rallies but also kept an office at the Socialists' campaign headquarters, assuring she was never far from earshot.
And on Tuesday, she let journalists waiting outside the couple's Paris apartment know who's in charge with a Tweet: "I thank my colleagues for respecting our private life and that of our neighbors. Please don't camp in front of our home."
Some political enemies of Hollande threw darts, with a lawmaker in Sarkozy's conservative UMP party comparing Trierweiler to a Rottweiler.
"All these attacks, one is lower than the next," the incoming first lady lamented on Radio Hollande, a station set up as part of his presidential campaign.
UNWED AT THE ELYSEE
Some mundane problems will need to be resolved, namely where the first couple will reside. Eschewing tradition _ and the Elysee Palace _ they want to remain in their own apartment, located in a busy Paris neighborhood and said to be a security nightmare.
And how will their unwed status play to the crowd of official visitors or when traveling abroad, particularly to countries sensitive about male-female ties outside wedlock?
Will they simply break down and get married?
"This isn't something you do under the pretext that you're going to be president," Hollande said in an interview with the magazine Elle. "The decision is ours."
Trierweiler wants to keep working even though she has been booted from her job as a political reporter to avoid conflict of interest.
"Even if my press card is withdrawn, I will die a journalist. It's in my soul," she told Radio Hollande.
In her new role, she is walking through the other side of the looking glass, and she knows it.
"This role makes me a little uncomfortable, but I will manage very well if it is not limited just to that. I want to represent the image of France, do the necessary smiling, be well-dressed, but it shouldn't stop there. I will not be a trophy wife," she told The Times of London.
CARLA'S LEGACY
Carla Bruni-Sarkozy suffered legions of tasteless jokes about why she hooked up with Sarkozy _ and more tasteless Tweets this week about whether she'll leave him now that he's out of power.
And she too struggled against the image of the trophy wife, according to Robb Young, author of "Power Dressing: First Ladies, Women Politicians and Fashion."
"On the world stage, of course, Carla outshone many of her first lady peers at the time, but this was more to do with the star power she accumulated during her years in the fashion industry and the natural charisma that no doubt helped to elevate her to supermodel status in the first place," he wrote in an email.
"What she spent most of her time as first lady trying to do _ in terms of her style at least _ was to downplay her inherent glamour quotient, detract from her beauty and whitewash some of her past by choosing rather demure and sometimes downright prim yet stately outfits," he said.
He noted that Bruni-Sarkozy had a career and world-famous name before ever marrying Sarkozy, and she has a foundation working to fight AIDS and other diseases.
"She will always be remembered for many more things than her comparatively brief career at the Elysee Palace," Young said.
___
Thomas Adamson and Cecile Brisson in Paris and Jocelyn Noveck in New York contributed to this report. ||||| Filling Carla Bruni’s Louboutin shoes would be a daunting prospect for anyone, but will certainly be executed with ease by the next woman charged with such a task.
Valérie Trierweiler, 47, the partner — or “companion” as she prefers to be called — of new French President-elect François Hollande, is already relatively familiar to the French public, as a feisty journalist for Paris Match magazine and from work as a political talk-show presenter.
Hollande insists that, unlike his predecessor, he will not have a speedy marriage to his partner, who is to be the first unmarried Première Dame in France’s history. She therefore cannot officially hold the First Lady title, but her dedication to pursuing her own career after her partner takes control on May 15 as the first French Socialist Prime Minister in nearly two decades suggests that she’s not the kind to mind.
(MORE: After Winning the French Presidency, What Will François Hollande Do Next)
A twice-divorced mother of three, Trierweiler reportedly began her relationship with Hollande in 2005, despite claims that Hollande and former Socialist presidential candidate Ségolène Royal, who had been together for 30 years, were still a couple during the 2007 French election campaign. Hollande and his new partner only went public in 2010.
Ever hungry to dissect female public figures, media commentators have already begun branding Trierweiler as “chic” and “classic” and remarking upon her sartorial choices. Even Reuters has fallen for her appearance, fawning over her “look reminiscent of late Hollywood actress Katharine Hepburn.” In fact, rather than focusing on her own image, it is claimed that Trierweiler played a key role in transforming her erstwhile bland boyfriend into a serious contender for the French presidential position, supposedly helping him lose 10 kg and instructing him to wear glasses with thinner frames.
(MORE: Who Is François Hollande? What You Need to Know About France’s Next President)
She also played her part at the political side of the Socialist’s presidential bid, stationing herself at his campaign headquarters, ready to be consulted on major decisions, according to the Sunday Times. Hollande’s campaign staff members apparently were careful never to disturb him if the words mon amour flashed up on his phone, knowing that it meant Trierweiler was calling and that he would be listening attentively.
It seems that despite conveying a public persona almost diametrically opposed to the glamorous, camera-friendly Bruni, the engagingly independent Trierweiler will capture just as much attention from the press and public. Yet as Hollande told the world before being elected: “I will present myself alone before the French. Alone. This is not a couple presenting itself but one person who must convince with his ideas, his approach.” We’ll soon see.
MORE: François Hollande: France Needs a Return to Fairness ||||| Image copyright AP Image caption Valerie Trierweiler, a journalist, was no stranger to the world of politics
She came to the Elysee on the arm of President Francois Hollande, flushed with triumph over the woman who had been her rival.
But two years later, the wheel has turned.
Now it is Valerie Trierweiler who suffers the pangs of the scorned.
There will be unkind tongues that say it is as much as she deserved.
Certainly, she never built much of a rapport with the French public, and if - after her hospitalisation - she ends up quitting her functions as first lady, it is doubtful that she will be missed.
Personal rivalry
In May 2012, following Francois Hollande's election victory, she became France's first unmarried presidential partner.
The protocol took some time to work out - the American press called her "First Girlfriend" - but even more troublesome was the task of defining a role.
Because Ms Trierweiler clearly felt she represented a new breed of presidential consort.
Not for her the decorative distractions of a Carla Bruni-Sarkozy, or the prudish mumsiness of a Bernadette Chirac.
Image copyright Getty Images Image caption Valerie Trierweiler has been a very different First Lady from Carla Bruni (C) and Bernadette Chirac (R)
A journalist for Paris-Match by profession, Valerie Trierweiler had played an important role in Mr Hollande's election campaign.
She answered his post and was constantly at his side. Aides said he often turned to her for advice - often to the exasperation of more seasoned staff.
For Ms Trierweiler, the election was not just a question of ensuring a Socialist triumph.
It was also a personal battle she was waging against the woman from whom she had taken the president-to-be, Segolene Royal.
Disastrous gambit
Back in 2007 it had been Ms Royal, Mr Hollande's long-term partner and mother of his four children, who came within an ace of being elected to the Elysee herself.
That was when she was the star of the Hollande-Royal couple - the one destined for greatness while Mr Hollande languished as party secretary.
But in the end Ms Royal was beaten by Nicolas Sarkozy. And in her parting shot, she revealed that for the last two years her relationship with Mr Hollande had been a fiction.
In fact he was with the woman from Paris-Match.
Image copyright AFP Image caption Valerie Trierweiler moved to Paris to study politics
Five years later, and a combination of flukes and clever strategy turned Mr Hollande into head of state. And so it was that Ms Trierweiler - not Ms Royal - walked up the steps of the Elysee.
But her critics say that the rivalry never left Ms Trierweiler. Ms Royal herself accused her of harbouring a "Rebecca" complex - after the Daphne du Maurier heroine who is obsessed by her husband's first wife.
Certainly Ms Trierweiler's first public foray from the Elysee was a disaster, clearly attributable to her loathing of Ms Royal.
During the parliamentary elections of June 2012, she sent out a tweet backing Ms Royal's opponent (also a Socialist but one disavowed by the party) for a seat in La Rochelle.
It caused major embarrassment, not least to President Hollande, who then persuaded her not to make further personal pronouncements.
Hopes quashed
According to an interview Ms Trierweiler gave last September to the Sunday Times, it was an awful time for her.
"There was a moment [after the tweet] when I didn't come back at all [to the Elysee]. I could almost have never come back. Then, well, I got over all that and came back bit by bit."
But her ambitions to be a new kind of first lady - independently expressing herself and keeping up a column in Paris-Match - were quashed.
She reverted to more conventional activities - accompanying the president on trips, and dedicating herself to charities and humanitarian causes.
In her interview with the Sunday Times, she admitted she had an image problem. "I'm not the nasty one people think," she said.
But the popular perception of her is that she is perhaps rather brusque and hard.
That may have something to do with her upbringing. Far from the privileged circles of previous first ladies, Valerie Trierweiler (nee Massonneau) grew up in a council flat in Angers.
She studied politics, then became a journalist. In 1995 she married another journalist, Denis Trierweiler, with whom she had three sons. They were divorced in 2010.
She has made her way in life by force of character, hard work and ambition. But perhaps she has never felt entirely secure about what she has achieved.
The revelations about Hollande's affair with Julie Gayet must therefore have come as a bitter blow.
To have fought so hard and won. And then to be brought low - and so publicly - by a beautiful younger rival.
That is indeed worth - in an Elysee spokesman's unofficial (under)statement - a "bad case of the blues". | France may losing Carla Bruni as first lady, but it sounds like her successor won't miss a step. Some odds and ends about 47-year-old Valerie Trierweiler, the unmarried "companion"—the term she prefers—of President-elect Francois Hollande, from Time, AP, and BBC: She is a well-known journalist for Paris Match magazine. (Time uses the descriptor "feisty.") She is twice-divorced and has three teenage children from one of those previous marriages. She and Hollande, 10 years her senior, do not plan to marry in the near future. AP says Trierweiler "stole" Hollande from Segolene Royal, who ran for president herself in 2007 but lost to Nicolas Sarkozy. Royal and Hollande have four kids together and announced their breakup after that election. "Valerie is perfect. She's so French," says Paris fashion writer Rebecca Voight. "It's what French women see in themselves. ... She kept a respectful distance from Hollande during the campaign and also had her career, which people respect." Trierweiler herself: "I didn't choose to have a public life. I chose Francois. But I will adapt." |
It’s a story that gets more tragic by the hour. The Sewol ferry, carrying 476 passengers, mostly youth from one high school in Ansan, South Korea, capsized last Wednesday while en route to Jeju Island. Shortly after the sinking, 174 passengers were rescued. More than a week later, at the time of this writing, 175 are confirmed dead; 127 are missing.
It’s also a story that’s downright mystifying. A captain that jumped ship. Untouched lifeboats. Orders to stay put as the vessel rolled. As bodies continue to be pulled from the sea, and as families desperately seek answers, the Sewol disaster has created a cultural flashpoint, forcing many to ask, “Who is to blame?”
It’s a question that is haunting a nation, baffling pundits, and challenging a highly militarized government hailed for its organization and efficiency. And while Sewol’s captain remains Public Enemy No. 1, media outlets are factoring in a more amorphous villain: South Korean culture. “Media coverage has portrayed the ferry disaster either as a terrible tragedy that any person can sympathize with,” says Ju Hui Judy Han, a professor of cultural geography of travel at the University of Toronto, “or as a bizarre accident that could have only happened somewhere else.”
According to several English-language media reports, the Asian country’s “culture of obedience” and youth deference to authority is the culprit. The Los Angeles Times reports that the disaster has “cast a harsh light on a Confucian culture in which young people are taught to respect the older generation,” while Reuters cites, “Many of the children did not question their elders, as is customary in hierarchical Korean society. They paid for their obedience with their lives.”
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Others echo the sentiment:
If that was a boatload of American students, you know they would have been finding any and every way to get off that ferry. But in Asian cultures…compliance is de rigueur. — Dallas Morning News While children from any culture might well obey orders in such an unfamiliar and terrifying situation, one expert says Korean teenagers are particularly conditioned to do so: “Korean teenagers are very accustomed to being told what to do and what to think.” — South China Morning Post “What this culture prizes in its children, in its students, is obedience. And so when they were told to stay put by an adult, of course they would stay put.” — CNN
It’s called “culture blaming,” and the media embraces it – especially the mainstream. “There’s two issues at play,” says Elizabeth Spayd, editor and publisher of Columbia Journalism Review. “First, there are many correspondents who parachute in to write about disasters who aren’t that familiar with the culture they drop into. (And it’s also true, in most American newsrooms, that the staff is not as diversified as the world.) But another reality is that, after a big disaster, when everyone’s looking for answers, people grab for whatever they can find.”
We saw culture blaming, too, when South Korean norms were incriminated for the Asiana Airlines crash in San Francisco last year, while Korean male anger and aggression served as an “explanation” for Seung-Hui Cho’s shooting spree on the Virginia Tech campus in 2007. Call it a journalistic hit: Sewol coverage transforms into a spectacle of groundless theories on how a culture is partially guilty for the wiping out of an entire sophomore class. On the surface, it appears like an innocuous and thoughtful attempt to offer insight, but at the root is the suggestion that these cultures are inferior, broken, or backwards. It paints a portrait of Asian youth without humanity and individual agency.
Should aspects of Korean society be scrutinized? Of course. Poor communication, disorganization, and complacency – compounded with fumbling bureaucracies and the lack of protocol and proper training – resulted in a botched rescue mission that has South Korea reeling. But to theorize that the high death toll is linked to a perceived cultural flaw or deficiency is a lazy journalistic shortcut. It fits a stereotype.
Meanwhile, what’s missed in all this culture blaming is the real cause. “Culture is not to blame for the Sewol disaster,” says Jaehwan Cho, a South Korean reporter covering the story in Seoul and Ansan. “It represents the problem of government structure.” The worst offense: It places blame on the victims and their families as a nation grieves.
If this happened to American teens, would we point to American culture as the source of the accident, or criticize our youth for not knowing what to do? Would we have blamed them for not surviving?
We wouldn’t.
Contact us at [email protected]. ||||| ANSAN, South Korea — For South Korea, a country that pulled itself out of abject poverty to become the world's 15th-largest economy, the most stinging accusation about last week's ferry sinking is that it looks like a Third-World disaster.
While the captain escaped and the crew dithered and bickered with emergency officials, hundreds of passengers, most of them high school students, obediently remained in their cabins as the ferry rolled and slipped beneath the surface of the cold, gray sea.
Mistake piled atop mistake turned a near-shore mishap into the nation's worst maritime disaster in decades. The calamity has shamed many South Koreans and left them with serious doubt about their political leaders at a moment when they were preparing for a high-profile visit from President Obama, who is slated to arrive Thursday night.
"We are supposed to be a prosperous middle power, but the fundamentals are still weak," said Choi Kang, vice president of the Asan Institute for Policy Studies in Seoul. "There was no control tower, nobody in charge."
The botched rescue also has cast a harsh light on a Confucian culture in which young people are taught to respect the older generation.
"I feel embarrassed as a Korean. We failed our children," said Kim Seun-tae, a 50-year-old minister whose son attends Danwon High School, which had 350 students and faculty members among the 476 people aboard the ship. Kim's son was not on the ferry.
The minister said he was struck by video from survivors' cellphones that showed the mostly 16- and 17-year-old students sitting dutifully in their seats.
"They were good, well-behaved kids. They followed instructions," Kim said. "Everybody is in a state of shock and depression. We can't look each other in the eye or speak."
Some events initially planned for the presidential visit have been toned down to avoid any appearance of festivities at a time when divers will probably still be plucking bodies from the sunken vessel, according to people involved in the planning. More than 160 passengers remained missing as of Tuesday, with 139 confirmed dead.
South Korean President Park Geun-hye, who made the protection of youths one of the themes of her administration, lashed out Monday at the crew members who abandoned the ship, saying the "behavior of the captain and some crew members is beyond understanding and no better than homicide."
But Park faces accusations that her newly restructured Ministry of Security and Public Administration failed at its first disaster response.
"They were civil servants with no experience or expertise. When it came to a time of crisis, people were paralyzed," said Jeong Chan-gwon of the Seoul-based Korea Institute for Crisis Management Analysis.
"When she called the captain a 'murderer,' it showed clearly how much political pressure she is under," said Scott Snyder, a Korea specialist with the Council on Foreign Relations, who was visiting Seoul last week.
A panicked and inexperienced crew failed to call the coast guard, instead notifying the vessel traffic service at their destination on Jeju Island, about 50 miles away.
It took 53 minutes for the Central Disaster and Safety Countermeasures Headquarters to mobilize. Meanwhile, the 69-year-old captain had already left the ship. Most of the crew members survived, while more than two-thirds of the passengers appear to have been lost.
Even before the official call for distress, students used their cellphones to call their parents and the South Korean emergency number.
"Help us. The boat is sinking," one boy reportedly told emergency dispatchers, according to a report Wednesday on Joongang Tongyang Broadcasting.
"The kids had never been on a ferry like that before. They didn't know what to do. They could have been saved," said Kim Seong-kyu, 19, a school student who was among the mourners leaving white chrysanthemums and handwritten messages at a makeshift shrine outside the school.
Among those being mourned was one of the surviving teachers from the doomed expedition who hanged himself from a tree last week in Jindo, the port city where families are staying.
Seven crew members have been arrested, including the captain, a semi-retired and part-time pilot who had been called at the last minute to command the 6,825-ton ship. He was in his cabin when the boat ran into trouble, with a 25-year-old third mate at the helm. Investigators believe that a sharp right turn by the novice might have caused the ferry's cargo to shift, putting it in an irreversible list. ||||| I’ve never been a big believer in the, “Because I’m the Daddy,” school of parenting. My view has always been that, if I, a thinking adult, could not impose a rule or condition on my child through logic and persuasion, perhaps the rule or condition wasn’t such a good idea.
On the flip side, if my kids can convince me – again, through logic and persuasion – of a particular cause or request, I’d consider acquiescing to it.
After all, my goal as a parent isn’t to always be right. It’s to get my kids to think.
I’m taken back to those core values as I read about the tragic sinking of the Sewol, the South Korean ferry in which 86 people are confirmed dead and another 220 are still missing — and increasingly presumed dead. Most of the victims are from a single high school.
The tragic tale was made even more heartbreaking amid reports that the high number of victims may have been linked to the captain instructing passengers to stay in their rooms. It’s believed that the youngsters complied, and may have been entombed in those rooms by the cold, rising water.
Here in the United States, it’s hard to imagine that, first of all, a bunch of high school kids would even listen, much less totally and faithfully comply with an adult’s instructions – even as a ship sinks.
That’s because we Americans – and certainly Texans – value the individual over the group. If that was a boatload of American students, you know they would have been finding any and every way to get off that ferry. But in Asian cultures, which place the needs of the group over the needs of the individual, compliance is de rigueur.
So, you end up with this horrendous death by obedience.
But there’s a second part to the group-first formula. If compliance and obedience are expected, then much responsibility is required of the people giving orders. Which is why South Korean President Park Geun-hye said Monday that the actions of the captain and some crew amounted to “unforgivable, murderous behavior.”
Yep. Some adults make bad decisions, shouldn’t be trusted. And that’s why I prefer to teach my kids to think rather than simply obey. ||||| Police officers are seen as a rescue and salvage team helicopter (top) flies over a port where family members of missing passengers from the capsized passenger ship Sewol gathered to wait for news from rescue and salvage teams, in Jindo April 22, 2014.
SEOUL (Reuters) - The first distress call from a sinking South Korean ferry was made by a boy with a shaking voice, three minutes after the vessel made its fateful last turn.
He called the emergency 119 number which put him through to the fire service, which in turn forwarded him to the coastguard two minutes later. That was followed by about 20 other calls from children on board the ship to the emergency number, a fire service officer told Reuters.
The Sewol ferry sank last Wednesday on a routine trip south from the port of Incheon to the traditional honeymoon island of Jeju.
Of the 476 passengers and crew on board, 339 were children and teachers on a high school outing. Only 174 people have been rescued and the remainder are all presumed to have drowned.
The boy who made the first call, with the family name of Choi, is among the missing. His voice was shaking and sounded urgent, a fire officer told MBC TV. It took a while to identify the ship as the Sewol.
"Save us! We're on a ship and I think it's sinking," Yonhap news agency quoted him as saying.
The fire service official asked him to switch the phone to the captain, and the boy replied: "Do you mean teacher?"
The pronunciation of the words for "captain" and "teacher" is similar in Korean.
The captain of the ship, Lee Joon-seok, 69, and other crew members have been arrested on negligence charges. Lee was also charged with undertaking an "excessive change of course without slowing down".
Authorities are also investigating the Yoo family, which controls the company that owns the ferry, Chonghaejin Marine Co Ltd, for possible financial wrongdoing amid growing public scrutiny. An official at the Financial Supervisory Service (FSS) told Reuters it was investigating whether Chonghaejin or the Yoo family engaged in any illegal foreign exchange transactions. The official did not elaborate.
Another person familiar with the matter told Reuters that prosecutors were looking into suspected tax evasion by the firm, its affiliates or the Yoo family with assistance from the National Tax Service. A spokesman at the tax agency declined to comment on the matter. "There are lots of reports in the media, so as the regulator we need to check if they are true," another FSS official said. Neither the Yoo family nor the company was immediately available for comment.
ONLY OBEYING ORDERS
Several crew members, including the captain, left the ferry as it was sinking, witnesses have said, after passengers were told to stay in their cabins. President Park Geun-hye said on Monday that instruction was tantamount to an "act of murder".
Many of the children did not question their elders, as is customary in hierarchical Korean society. They paid for their obedience with their lives.
Four crew members appeared in court on Tuesday and were briefly questioned by reporters before being taken back into custody. One unidentified second mate said they had tried to reach the lifeboats, but were unable to because of the tilt.
Only two of the vessel's 46 lifeboats were deployed.
Two first mates, one second mate and the chief engineer stood with their heads lowered and it was impossible to tell who was speaking.
One said there had been a mistake as the boat made a turn. Another said there was an eventual order to abandon ship. He said the crew gathered on the bridge and tried to restore balance, but could not.
"Maybe the steering gear was broken," one said.
Media said the ship lost power for 36 seconds, which could have been a factor.
Public broadcaster KBS, quoting transcripts of the conversation between the crew and sea traffic control, the Jindo Vessel Traffic Services Centre, said the passengers were told repeatedly to stay put.
For half an hour, the crew on the third deck kept asking the bridge by walkie-talkie whether or not they should make the order to abandon ship, KBS said.
No one answered.
"We kept trying to find out but ... since there was no instruction coming from the bridge, the crew on the third floor followed the instructions on the manual and kept making 'stay where you are' announcements," KBS quoted a crew member as saying. "At least three times."
Lee was not on the bridge when the ship turned. Navigation was in the hands of a 26-year old third mate who was in charge for the first time on that part of the journey, according to crew members.
In a confused exchange between the sinking Sewol and maritime traffic control released by the government, the crew said the ship was listing to port.
"Make passengers wear life jackets and get ready in case you need to abandon ship," traffic control said.
The Sewol answered: "It's difficult for the passengers to move now."
(Additional reporting by Jungmin Jang, Se Young Lee, Joyce Lee and Miyoung Kim; Writing by Nick Macfie; Editing by Robert Birsel) | The Sewol ferry disaster has left the world looking for answers, wondering who to blame. And an uncomfortable number of English-language media outlets have hit on an answer, Kai Ma at Time observes: South Korea's "culture of obedience." For example... LA Times: The disaster and failed rescue have "cast a harsh light on a Confucian culture in which young people are taught to respect the older generation." Reuters: "Many of the children did not question their elders, as is customary in hierarchical Korean society. They paid for their obedience with their lives." Dallas Morning News: "If that was a boatload of American students, you know they would have been finding any and every way to get off that ferry. But in Asian cultures … compliance is de rigueur." "It's called 'culture blaming,' and the media embraces it—especially the mainstream," Ma complains. "On the surface, it appears like an innocuous and thoughtful attempt to offer insight, but at the root is the suggestion that these cultures are inferior, broken, or backwards." Certainly aspects of Korean society failed here—like its "fumbling bureaucracies and the lack of protocol." But blaming it on some cultural flaw is lazy journalism, and, more heinously, "It places blame on the victims and their families as a nation grieves." Click for the full column. |
This report examines intelligence funding over the past several decades, with an emphasis on the period from 2007 to 2018, during which total national and military intelligence program spending dollars have been publicly disclosed on an annual basis. A table of topline budget figures (see Table 1 ) and accompanying graphs (see Figure 2 and Figure 3 ) illustrate that in comparison with national defense spending, intelligence-related spending has remained relatively constant over the past decade, representing approximately 11% of annual national defense spending over that time period. Various tables and graphs included in this report illustrate trends in intelligence spending. Figure 1 illustrates highs and lows in NIP spending between 1965 and 1994. Table 1 compares NIP and MIP spending to national def ense spending from FY2007 to FY2019 , reporting values in both nominal and constant dollars. Figure 2 and Figure 3 use the data in Table 1 to provide an overview of intelligence spending compared to tota l national defense spending. Additional tables in Appendix B and Appendix C provide an ove rview of the IC budget programs. Table B-1 identifies 4 defense NIP programs, 8 nondefense NIP programs, and 10 MIP programs. Table C-1 illustrates how those MIP and NIP intelligence programs are spread across different departments and agencies with an intelligence mission. Table C-1 lists the 17 components of the i ntelligence c ommunity (IC) as def ined by statute . This report is p ublished in conjunction with CRS Report R44681, Intelligence Community Programs, Management, and Enduring Issues , by [author name scrubbed] , which examines IC spending programs—to include specifics related to NIP and MIP subordinate programs such as the Consolidated Cryptologic Program (CCP) and National Reconnaissance Program (NRP). Intelligence spending is usually understood as the sum of two separate budget programs: (1) the NIP, which covers the programs, projects, and activities of the intelligence community oriented toward the strategic needs of decisionmakers, and (2) the MIP, which funds defense intelligence activities intended to support operational and tactical level intelligence priorities supporting defense operations. The combined NIP and MIP budgets do not encompass the total of U.S. intelligence-related spending. Many departments have intelligence-gathering entities that support a department-specific mission, use department funds, and do not fall within either the NIP or the MIP. For example, the Homeland Security Intelligence Program (HSIP) is sometimes referenced in intelligence-related legislation. It is a small program that exists within the Department of Homeland Security (DHS) to fund those intelligence activities of the DHS Office of Intelligence and Analysis that serve predominantly departmental missions. With the exception of U.S. Coast Guard Intelligence and the Office of Intelligence and Analysis, the NIP does not fund intelligence activities of the Department of Homeland Security, nor does the NIP fund intelligence activities of state, local, and tribal governments. In addition, the MIP does not fund certain military platforms that can have an intelligence mission, such as the E-3 Airborne Warning and Control System (AWACS) or the MQ-9 Reaper unmanned aerial vehicle (UAV) air-to-ground strike platform. The intelligence budget funds intelligence and intelligence-related activities —defined in this report to include the following: The collection, analysis, production, dissemination, or use of information that relates to a foreign country, or a government, political group, party, military force, movement, or other association in a foreign country, and that relates to the defense, foreign policy, national security, or related policies of the United States and other activity in support of the collection, analysis, production, dissemination, or use of such information; Activities taken to counter similar activities directed against the United States; Covert or clandestine activities affecting the relations of the United States with a foreign government, political group, party, military force, movement, or other association; Collection, analysis, production, dissemination, or use of information about activities of persons within the United States, its territories and possessions, or nationals of the United States abroad whose political and related activities pose, or may be considered by a department, agency, bureau, office, division, instrumentality, or employee of the United States to pose, a threat to the internal security of the United States; and Covert or clandestine activities directed against persons within the United States, its territories and possessions, or nationals of the United States abroad whose political and related activities pose, or may be considered by a department, agency, bureau, office, division, instrumentality, or employee of the United States to pose, a threat to the internal security of the United States. The intelligence budget, separate and distinct from the defense budget, dates to reforms initiated in the 1970s to improve oversight and accountability of the IC. Presidents Ford, Carter, and Reagan gradually centralized management and oversight over what was then known as the National Foreign Intelligence Program (NFIP), which consolidated the CIA budget with portions of the defense budget associated with national intelligence activities such as cryptologic and reconnaissance programs. Originally the Director of Central Intelligence (DCI) managed the NFIP, in consultation with the Secretary of Defense, and the National Security Council (NSC) provided oversight. The Intelligence Reform and Terrorism Prevention Act (IRTPA) of 2004 (see §1074 of P.L. 108-458 ) renamed and modified the NFIP as the NIP. The IRTPA also created the position of Director of National Intelligence (DNI). The DNI was given greater budgetary authority in conjunction with the NIP than the DCI had in conjunction with the NFIP. Intelligence Community Directive (ICD) 104 provides overall policy to include a description of the DNI's roles and responsibilities as program executive of the NIP. Military-specific t actical or operational intelligence activities were not included in the NFIP. They were referred to as Tactical Intelligence a nd Related Activities (TIARA) and were managed separately by the Secretary of Defense. TIARA referred to the intelligence activities "of a single service" that were considered organic (meaning "to belong to") military units. In 1994, a new category was created called the Joint Military In telligence Program (or JMIP) for defense-wide intelligence programs. A DOD memorandum signed by the Secretary of Defense in 2005 merged TIARA and JMIP to create the MIP. DOD Directive 5205.12, signed in November 2008, established policies and assigned responsibilities, to include the role of Under Secretary of Defense for Intelligence (USD(I)) as MIP program executive and "principal proponent for MIP policies and resources," acting on behalf of the Secretary of Defense. Thus, the DNI and USD(I), respectively, manage the NIP and MIP separately under different authorities. A program is primarily NIP if it funds an activity that supports more than one department or agency, or provides a service of common concern for the IC. The NIP funds the CIA and the strategic-level intelligence activities associated with the NSA, DIA, and NGA. It also funds Sensitive Compartmented Information (SCI) programs throughout the IC. A program is primarily MIP if it funds an activity that addresses a unique DOD requirement. The DNI and USD(I) work together in a number of ways to facilitate the integration of NIP and MIP intelligence efforts. Mutually beneficial programs may receive both NIP and MIP resources. The NIP may be perceived as more complicated than the MIP because it is an aggregation of programs that span the entire IC. In general, NIP programs are based on capabilities such as cryptology, reconnaissance, and signals collection that span several IC components. Each program within the NIP is headed by a program manager. Program managers exercise daily direct control over their NIP resources. The DNI acts as an intermediary in the budget process, between these managers, the President, and Congress. The DNI determines and controls defense and nondefense NIP funds from budget development through execution. In contrast, the MIP encompasses only those defense dollars associated with the operational and tactical-level intelligence activities of the military services. According to the MIP charter directive: The MIP consists of programs, projects, or activities that support the Secretary of Defense's intelligence, counterintelligence, and related intelligence responsibilities. This includes those intelligence and counterintelligence programs, projects, or activities that provide capabilities to meet warfighters' operational and tactical requirements more effectively. The term excludes capabilities associated with a weapons system whose primary mission is not intelligence. Some experts have described the MIP as follows: ... the "take it with you" intelligence organic to the deployable units in all services at all echelons of command, for example, the Navy's anti-submarine ships with the Surveillance Towed Array Sensor System (SURTASS), the Air Force's RC-135 Rivet Joint signals intelligence aircraft, the Army's and Marine Corps' tactical signals intelligence capabilities, and the Defense Intelligence Agency's analysts assigned to the theater joint intelligence operations centers. MIP dollars are managed within the budgets of DOD organizations by component managers—such as the senior leader for the intelligence element of the U.S. Air Force (USAF/A2) who manages Air Force MIP dollars and the senior leader for the intelligence element of the U.S. Navy (USN/N2) who manages MIP dollars for the Navy—in accordance with USD(I) guidance and policy. MIP components include the Office of the Secretary of Defense; the intelligence elements of the military departments; the intelligence element of U.S. Special Operations Command (USSOCOM/J2); and military intelligence activities associated with DIA, NGA, NRO, and NSA. Some DOD intelligence components make use of both NIP and MIP funds. The directors of DIA, NGA, NRO, and NSA serve simultaneously as program managers for their NIP funds and component managers for their MIP funds. Most intelligence dollars are embedded in the defense budget for security purposes. All but the topline budget numbers are classified. Disclosure of details associated with the intelligence budget has been debated for many years, with proponents arguing for more accountability and IC leadership arguing that disclosure of such figures could damage national security. In 1999, then-DCI George Tenet articulated the potential risk of disclosure as follows: Disclosure of the budget request reasonably could be expected to provide foreign governments with the United States' own assessment of its intelligence capabilities and weaknesses. The difference between the appropriation for one year and the Administration's budget request for the next provides a measure of the Administration's unique, critical assessment of its own intelligence programs. A requested budget decrease reflects a decision that existing intelligence programs are more than adequate to meet the national security needs of the United States. A requested budget increase reflects a decision that existing intelligence programs are insufficient to meet our national security needs. A budget request with no change in spending reflects a decision that existing programs are just adequate to meet our needs. The 9/11 Commission agreed with critics who argued for more transparency but also found that disclosure of numbers below the topline could cause damage to national security. It recommended that the amount of money spent on national intelligence be released to the public: [T]he top-line figure by itself provides little insight into U.S. intelligence sources and methods. The U.S. government readily provides copious information about spending on its military forces, including military intelligence. The intelligence community should not be subject to that much disclosure. But when even aggregate categorical numbers remain hidden, it is hard to judge priorities and foster accountability. In response to the 9/11 Commission recommendations, Section 601(a) of P.L. 110-53 (codified at 50 U.S.C. Section 3306(b)) directs the DNI to disclose the NIP topline number: Not later than 30 days after the end of each fiscal year beginning with fiscal year 2007, the Director of National Intelligence shall disclose to the public the aggregate amount of funds appropriated by Congress for the National Intelligence Program for such fiscal year. Section 601(b) (codified at 50 U.S.C. Section 3306(c)(1)(A)) allows the President to "waive or postpone the disclosure" if the disclosure "would damage national security." The first such disclosure was made on October 30, 2007. The Intelligence Authorization Act (IAA) of 2010 ( P.L. 111-259 ) further amended Section 601 to require the President to publicly disclose the amount requested for the NIP for the next fiscal year "at the time the President submits to Congress the budget." At the present time only the NIP topline figure must be disclosed based on a directive in statute. The DNI is not required to disclose any other information concerning the NIP budget, including whether the information concerns particular intelligence agencies or particular intelligence programs. In 2010, the Secretary of Defense began disclosing MIP appropriations figures on an annual basis and in 2011 disclosed those figures back to 2007. These actions have provided public access to previously classified budget numbers for national and military intelligence activities. Figure 1 illustrates highs and lows in NIP spending between 1965 and 1994. Due to the classified nature of the intelligence budget at that time, the graphic does not include dollar figures. Figure 1 suggests that NIP spending declined steadily from about 1971 to 1980, climbed back to 1968 levels by about 1983, and steadied to fairly constant levels between 1985 and 1994. The pattern of spending in Figure 1 generally reflects world events and associated defense spending. Analyses of defense spending over the past several decades usually attribute higher levels of defense spending in the 1960s to the Vietnam War; lower levels of defense spending in the 1970s to the period of détente between the United States and the Soviet Union and to the worldwide economic recession; and higher levels of defense spending in the 1980s to the Reagan defense build-up. A graph depicting defense outlays between 1950 and 2017 is provided in Figure A-1 . Table 1 compares NIP and MIP spending to national defense spending from FY2007 to FY2019, reporting values in both nominal and constant dollars. Budget numbers appropriated for FY2013 show adjustments made in accordance with automatic spending cuts required under the Budget Control Act of 2011 ( P.L. 112-25 ). Topline numbers associated with national defense spending are reported in Table 1 and illustrated graphically in Figures 1 and 2 . The nominal dollars in Table 1 suggest that the NIP topline steadily increased from FY2007 to FY2012. The MIP topline steadily increased from FY2007 to FY2010, then decreased from FY2011 to FY2015 before showing steady, yet small increases from FY2016 to the requested figures for FY2019. These NIP and MIP trends have changed the relative sizes of the NIP and MIP budgets. For example, of the $63.5 billion appropriated in FY2007, the NIP portion ($43.5 billion) was roughly twice the size of the MIP portion ($20 billion). In contrast, by FY2015 (and subsequently) the NIP was approximately three times larger than the MIP. The constant dollars in Table 1 suggest that the NIP dollars appropriated in FY2017 ($56.7 billion) were roughly equal to the NIP dollars appropriated in FY2008 ($56.8 billion). The highest level of NIP spending, in constant dollars, was in FY2011 ($61.7 billion). In contrast, the MIP dollars appropriated in FY2017 ($19.1 billion) were significantly less than the MIP dollars appropriated in FY2007 ($24.6 billion). The highest level of MIP spending, in constant dollars, was in FY2009-FY2010 ($31.1 billion). Figure 2 uses the data in Table 1 to provide an overview of total intelligence spending as a percentage of overall national defense spending. The almost flat percentage line suggests that annual intelligence spending has remained relatively constant over the past decade, consistently representing approximately 11% of annual national defense spending. Figure 3 adds four additional NIP topline values—numbers available for FYs 1997, 1998, 2005, and 2006. The topline number for the NIP was classified until 2007, with two exceptions. In October 1997, then-DCI George Tenet announced that the intelligence budget for FY1997 was $26.6 billion, and in March 1998, DCI Tenet announced that the budget for FY1998 was $26.7 billion. In addition, IC officials retroactively declassified NIP topline numbers for FY2005 ($39.8 billion) and FY2006 ($40.9 billion). Nevertheless, corresponding MIP topline dollars for 1997, 1998, 2005, and 2006 are not publicly available. Figure 3 provides a snapshot of NIP spending over the past two decades, and despite the lack of data between 1999 and 2004, the values that are present suggest relative constancy in NIP topline dollar appropriations. Congress's and the American public's ability to oversee and understand how intelligence dollars are spent is limited by the secrecy that surrounds the intelligence budget process. DNI Daniel Coats has stated his commitment to transparency "as a foundational element of securing public trust in our endeavors." Many believe the IC could exercise greater transparency with respect to budgetary matters, however, and that disclosure of intelligence-related spending other than the topline number would not be harmful to national security. In the 115 th Congress, legislation has again been introduced to address the issue of transparency and secrecy in the intelligence budgets, continuing efforts to require disclosure of the topline budget figure for each of the components of the intelligence community. H.R. 5406 , and a nearly identical bill, S. 2631 , both titled "Intelligence Budget Transparency Act of 2018," would require the President to disclose, in his annual budget request to Congress, [T]he total dollar amount proposed in the budget for intelligence or intelligence related activities of each element of the Government engaged in such activities in the fiscal year for which the budget is submitted and the estimated appropriation required for each of the ensuing four fiscal years. The bills were referred to the House and Senate Committees on the Budget, respectively. The 115 th Congress may consider reexamining the arguments, directives, and statute that currently guide disclosure of numbers associated with intelligence spending. Some have asserted that America's intelligence agencies may spend more money on gathering and disseminating intelligence than the rest of the world's intelligence services put together. Is it enough? And, to what extent is the IC providing value for the money? As Congress considers the FY2019 NIP and MIP budgets, and balances the need to protect both national security and taxpayer dollars, coming to agreement with the executive branch on how much spending is enough lies at the heart of much of its oversight responsibility and power of the purse. The following types of questions may be considered: Does the IC have the funding to develop or maintain collection capacity necessary to support national security policy? Does the IC have the funding necessary to develop the capacity for the timely processing and analysis of data? Is the IC organized or sufficiently integrated to realize efficiencies in the collection, processing, analysis and sharing of intelligence across its 17 components? Where can the IC accept risk relative to budget limitations? Is the IC postured to leverage international partners for coverage of emerging issues or areas where the IC has limited investment? Does the National Intelligence Priorities Framework (NIPF) process provide a useful means for prioritizing the allocation of resources? Does the Office of the Director of National Intelligence (ODNI) have the authority, funding, and organization to enable oversight of the impact of intelligence programs of IC components? Appendix A. Defense Spending: FY1950-2017 Appendix B. Intelligence Programs (NIP and MIP) Appendix C. Intelligence Community Entities Receiving NIP and MIP Funding Six U.S. intelligence entities—those organizations with an intelligence mission that include but are not limited to the IC components defined by statute—have both MIP and NIP funding sources. The directors of DIA, NGA, NRO, and NSA serve as both Program Managers for their NIP funds and Component Managers for their MIP funds. Appendix D. Intelligence Community Components In statute, the IC comprises 17 component organizations, spread across six separate departments of the federal government, and two independent agencies. NIP spending is spread across all 17, while MIP spending is confined to the DOD. | Total intelligence spending is usually understood as the combination of the National Intelligence Program (NIP), which supports strategic planning and policymaking, and the Military Intelligence Program (MIP), which supports military operational and tactical levels of planning and operations. There are 4 defense NIP programs, 8 nondefense NIP programs, and 10 MIP programs. Six U.S. intelligence community (IC) components have both MIP and NIP funding sources. Funding associated with the 17 components of the IC is significant. In fiscal year FY2017 alone, the aggregate amount (base and supplemental) of appropriated funds for national and military intelligence programs totaled $73.0 billion ($54.6 billion for the NIP, and $18.4 billion for the MIP). For FY2018, the aggregate amount of appropriations requested for national and military intelligence programs totaled $78.4 billion ($57.7 billion for the NIP and $20.7 billion for the MIP). In comparison with national defense spending, intelligence-related spending has remained relatively constant over the past decade, representing approximately 11% of the total defense budget. |
01:31 Lane Poses Increasing Threat to Hawaii Hurricane Lane Now a Strong Category 4 with an Increasing Chance of Affecting Hawaii
At a Glance A total of 14 named storms, seven hurricanes and three major hurricanes are expected this season.
This is slightly above the 30-year average of 12 named storms, six hurricanes and two major hurricanes.
The forecast was released Thursday by the Colorado State University Tropical Meteorology Project.
After last year's disastrous hurricane season that included storms like Harvey, Irma and Maria, the U.S. probably won't see much of a hurricane reprieve this year, according to forecasters from the Colorado State University Tropical Meteorology Project .
The 2018 Atlantic hurricane season forecast released Thursday from Colorado State University calls for the number of named storms and hurricanes to be slightly above historical averages, but less than last year.
(MORE: Hurricane Central )
The group led by Dr. Phil Klotzbach calls for another busy season with a total of 14 named storms, seven hurricanes and three major hurricanes.
This is just above the 30-year average of 12 named storms, six hurricanes and two major hurricanes. A major hurricane is one that is Category 3 or stronger on the Saffir-Simpson Hurricane Wind Scale .
<img class="styles__noscript__2rw2y" src="https://dsx.weather.com/util/image/w/2018_trop_atl_fcst.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0" srcset="https://dsx.weather.com/util/image/w/2018_trop_atl_fcst.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 400w, https://dsx.weather.com/util/image/w/2018_trop_atl_fcst.jpg?v=ap&w=980&h=551&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 800w" > Numbers of Atlantic Basin named storms, those that attain at least tropical storm strength, hurricanes, and hurricanes of Category 3 intensity forecast by Colorado State University compared to the 30-year average. (Forecast: Tropical Meteorology Project/Colorado State University) (Forecast: Tropical Meteorology Project/Colorado State University)
Though the official Atlantic hurricane season runs from June through November, occasionally we can see storms form outside those months, as happened last season with April's Tropical Storm Arlene .
(MORE: 17 Things We Remembered Most About the 2017 Season )
The CSU outlook is based more than 30 years of statistical predictors, combined with seasons exhibiting similar features of sea-level pressure and sea-surface temperatures in the Atlantic and eastern Pacific Oceans.
Here are three questions what this outlook means.
Q: What Does This Mean For the U.S.?
There is no strong correlation between the number of storms or hurricanes and U.S. landfalls in any given season. One or more of the 14 named storms forecast to develop this season could hit the U.S., or none at all. Therefore, residents of the coastal United States should prepare each year no matter the forecast.
A couple of classic examples of why you need to be prepared each year occurred in 1992 and 1983.
The 1992 season produced only six named storms and one subtropical storm. However, one of those named storms was Hurricane Andrew, which devastated South Florida as a Category 5 hurricane.
In 1983 there were only four named storms, but one of them was Alicia . The Category 3 hurricane hit the Houston-Galveston area and caused almost as many direct fatalities there as Andrew did in South Florida.
In contrast, the 2010 season was active. There were 19 named storms and 12 hurricanes that formed in the Atlantic Basin.
Despite the large number of storms that year, not a single hurricane and only one tropical storm made landfall in the United States.
In other words, a season can deliver many storms, but have little impact, or deliver few storms and have one or more hitting the U.S. coast with major impact.
<img class="styles__noscript__2rw2y" src="https://dsx.weather.com/util/image/w/usa2017tropicalimpacts.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0" srcset="https://dsx.weather.com/util/image/w/usa2017tropicalimpacts.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 400w, https://dsx.weather.com/util/image/w/usa2017tropicalimpacts.jpg?v=ap&w=980&h=551&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 800w" > The named storms that affected the U.S. in 2017 ranged from Harvey's hit on the Texas coast to the catastrophic hit on Puerto Rico by Maria.
The U.S. averages one to two hurricane landfalls each season, according to NOAA's Hurricane Research Division statistics .
In 2017, seven named storms impacted the U.S. coast, including Puerto Rico, most notably hurricanes Harvey , Irma and Maria , which battered Texas, Florida and Puerto Rico, respectively.
(MORE: Three Category 4 Hurricanes Made a U.S. Landfall in 2017 )
In 2016, five named storms impacted the Southeast U.S. coast, most notably the powerful scraping of the coast from Hurricane Matthew , and its subsequent inland rainfall flooding.
Before that, the number of U.S. landfalls had been well below average over the previous 10 years.
The 10-year running total of U.S. hurricane landfalls from 2006 through 2015 was seven, according to Alex Lamers, a meteorologist with The National Weather Service. This was a record low for any 10-year period dating to 1850, considerably lower than the average of 17 per 10-year period dating to 1850, Lamers added .
Bottom line: It's impossible to know for certain if a U.S. hurricane strike, or multiple strikes, will occur this season. Keep in mind, however, that even a weak tropical storm hitting the U.S. can cause major impacts, particularly if it moves slowly, resulting in flooding rainfall.
Q: Will El Niño or La Niña play a role?
The odds are increasingly in favor for the development of a neutral state of El Niño or a weak El Niño by the heart of the hurricane season. In other words, near average or slightly warmer than average water temperatures in the eastern Pacific are anticipated.
<img class="styles__noscript__2rw2y" src="https://dsx.weather.com/util/image/w/mellowing_ln_0.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0" srcset="https://dsx.weather.com/util/image/w/mellowing_ln_0.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 400w, https://dsx.weather.com/util/image/w/mellowing_ln_0.jpg?v=ap&w=980&h=551&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 800w" > Increasing water temperatures in the equatorial Pacific is a sign that La Niña is waning.
El Niño, or the periodic warming of the central and eastern equatorial waters of the Pacific Ocean, tends to produce areas of stronger wind shear (the change in wind speed with height) and sinking air in parts of the Atlantic Basin that is hostile to either the development or maintenance of tropical cyclones.
The chances of El Niño development climb toward the end of the season, according to the Climate Prediction Center , but neutral conditions are most likely during the peak of hurricane season, which occurs in September.
<img class="styles__noscript__2rw2y" src="https://dsx.weather.com//util/image/w/el_nino_explainer.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0" srcset="https://dsx.weather.com//util/image/w/el_nino_explainer.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 400w, https://dsx.weather.com//util/image/w/el_nino_explainer.jpg?v=ap&w=980&h=551&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 800w" > The effects of El Niño in the eastern Pacific, Caribbean and western Atlantic Ocean.
Klotzbach noted in the outlook that there is considerable uncertainty regarding the future state of El Niño. In fact, "the latest plume of ENSO (El Niño-Southern Oscillation) predictions from a large number of statistical and dynamical models shows a large spread by the peak of the Atlantic hurricane season in August-October."
However, based on the current information, Klotzbach says that the "best estimate is that we will likely have neutral ENSO conditions by the peak of the Atlantic hurricane season."
ENSO conditions will need to be closely monitored over the next few months.
Q: Any Other Factors in Play?
Water temperatures in the Atlantic have a much more direct role in tropical cyclone development on our side of the continent.
The current water temperatures across the North Atlantic basin show cooler-than-average water temperatures in the far North Atlantic and in the eastern tropical Atlantic and warmer-than-average water temperatures off the East Coast of the U.S., Klotzbach points out.
Since early March there has been some slight anomalous warming across the eastern and central tropical Atlantic, Klotzbach notes. It remains a big question of what water temperatures will be in the North Atlantic during the peak of hurricane season.
Remember, however, that it isn't the anomalies that allow hurricanes to intensify, but rather the actual heat of the oceans.
Water temperatures of 80 degrees or higher are generally supportive of tropical storm and hurricane formation and development.
<img class="styles__noscript__2rw2y" src="https://dsx.weather.com/util/image/w/atl_sst_eapr.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0" srcset="https://dsx.weather.com/util/image/w/atl_sst_eapr.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 400w, https://dsx.weather.com/util/image/w/atl_sst_eapr.jpg?v=ap&w=980&h=551&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 800w" >
Much of the tropics stay at or above this temperature for most of the year.
So why bring it up if favorable conditions are always around?
If temperatures in the MDR are warmer than average, we often get more than the average number of tropical storms and hurricanes from this region. Conversely, below average ocean temperatures can lead to less tropical storms than if waters were warmer.
Another aspect that we must keep in mind is that warmer waters in the MDR allows tropical waves, the formative engines that can become tropical storms, to get closer to the Caribbean and United States.
Another factor to consider is the end of the positive phase of the Atlantic Multidecadal Oscillation (AMO). This is a climate cycle that lasts roughly 50-80 years, with about half of that period seeing increased hurricane activity while the other half sees decreased activity.
The current upward swing began in 1995, and the index that measures AMO has been in the cold or decreased phase in recent years and is near its long-term average.
The AMO only has high-level effects on the tropics, and any effects from the cycle will need to be researched after the season is over.
<img class="styles__noscript__2rw2y" src="https://dsx.weather.com/util/image/w/2018_atl_tc_names.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0" srcset="https://dsx.weather.com/util/image/w/2018_atl_tc_names.jpg?v=at&w=485&h=273&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 400w, https://dsx.weather.com/util/image/w/2018_atl_tc_names.jpg?v=ap&w=980&h=551&api=7db9fe61-7414-47b5-9871-e17d87b8b6a0 800w" > 2018 Atlantic hurricane season names.
Other factors that can be detrimental to tropical storm or hurricane development include dry air and wind shear.
The 2013 and 2014 seasons featured prohibitive dry air and/or wind shear during a significant part of the season, but El Niño was nowhere to be found.
This was the second April outlook issued since the passing of Dr. William Gray, noted hurricane researcher and emeritus professor of atmospheric science at Colorado State University.
Gray, who died in April of 2016, was the creator of the yearly Atlantic hurricane season outlooks, which have been published every year since 1984. He developed the parameters for these outlooks in the late 1960s, which was considered ground-breaking research at that time. |||||
Hurricanes Katia, Irma and Jose on Sept. 8, 2017. (NASA)
Last year’s hurricane season was more than twice as active as a typical season, and an onslaught of storms left deep wounds across the Caribbean and southern United States that have not yet healed. But, ready or not, the 2018 Atlantic hurricane season begins on June 1.
[2017 review: The Atlantic hurricane season from hell is finally over]
As it has done every year since 1984, Colorado State University has released its initial predictions for the upcoming season. Its forecast is for a total of 14 named storms, seven hurricanes and three major hurricanes, which is slightly above the long-term average of 12 named storms, six hurricanes and two major hurricanes. Last year, we saw 17 named storms, 10 hurricanes and six major hurricanes.
These 2018 predictions will be updated on May 31, July 2 and Aug. 2.
Two primary factors critical for determining how active the upcoming Atlantic hurricane season will be whether El Niño develops and the configuration of North Atlantic sea surface temperatures.
El Niño
When El Niño conditions are present and ocean temperatures in the tropical Pacific are warm, the Atlantic hurricane season tends to be less active. The reverse is true when La Niña, the opposite phase, prevails and the tropical Pacific waters are cool. Right now, the verdict is still out about which conditions, if any, will take control by the time hurricane season is underway.
Similar to what occurred last winter, the tropical eastern and central Pacific cooled to weak La Niña conditions this past winter. These weak La Niña conditions have continued to persist, although there has been rising of sea surface temperatures in the eastern and central tropical Pacific in recent weeks.
Current SST anomalies across the Pacific basin. Generally SST anomalies are negative (cool) across most of the eastern and central tropical Pacific, indicative of weak La Niña conditions. (NOAA)
During the Northern Hemisphere spring, the future state of the El Niño and La Niña is notoriously difficult to predict — a phenomenon known as the springtime predictability barrier.
The low-level winds that force ocean circulation changes that drive El Niño and La Niña events are usually at their weakest during this time, and consequently, small changes in the atmosphere can have significant effects on whether El Niño develops. As a result, computer model forecasts are typically least reliable during the Northern Hemisphere spring. This lack of skill was clearly demonstrated last year, as most of the forecast models called for El Niño to develop by the peak of the Atlantic hurricane season. Instead, we ended up with neutral to weak La Niña conditions, which supported the very active season.
Predictions from a suite of ENSO models from March 2017 — the information that CSU had available at the time of its early April forecast last year. The black stars are the observed SST values.
The latest suite of computer model guidance indicates a chance for El Niño development by the peak of the Atlantic hurricane season, but the majority of the model guidance calls for neutral conditions, that is, neither El Niño or La Niña and sea surface temperatures near their long-term average.
At this point, CSU is anticipating that neutral conditions in the tropical Pacific are the most likely scenario for the summer/fall of 2018.
In summary, the Pacific Ocean may not give us many predictive clues about the Atlantic hurricane season.
Latest suite of ENSO forecast models from March 2018. The black oval highlights the peak of the Atlantic hurricane season (August-September-October). (International Research Institute for Climate and Society)
North Atlantic sea surface temperatures
Should the forecast for neither El Niño or La Niña hold true in the Pacific, the configuration of Atlantic sea surface temperatures becomes very important for predicting how active the hurricane season will be. Generally, the presence of warm water in the North Atlantic would tend to portend a busy season.
The western North Atlantic Ocean is currently somewhat warmer than normal, while the far North Atlantic and eastern tropical Atlantic are slightly cooler than normal.
Overall, sea surface temperatures dropped much faster than normal during this past winter, in large part because of a strong subtropical high pressure that dominated the North Atlantic during January and February, driving stronger winds that caused more mixing and churning up of the sea surface and, thereby, promoting cooling. Consequently, high sea surface temperatures, compared to normal, that dominated the North Atlantic last fall were replaced by cooler waters by late winter/early spring.
Current North Atlantic sea surface temperature anomalies. The far North Atlantic and portions of the eastern tropical Atlantic are colder than normal, while most of the remainder of the North Atlantic is warmer than normal. (NOAA)
The current sea surface temperature pattern is fairly similar to the pattern that prevailed in early April of last season. However, during last spring/summer, the waters warmed much faster than normal across most of the Atlantic, and by the peak of the Atlantic hurricane season, the sea surface temperatures were much warmer than normal across most of the tropical Atlantic, providing increased fuel for the hurricanes that formed last year (most notably, Irma, Jose, and Maria).
Several climate models including recent predictions from the National Weather Service Climate Forecast System model indicate that the tropical Atlantic will become warmer than normal by August-October. If this holds true, at least a somewhat active hurricane season would be likely.
Recent prediction of August-October global SSTs from NOAA’s Climate Forecast System model. The Climate Forecast System model is predicting a warmer-than-normal tropical Atlantic in August-October, with neutral ENSO conditions in the tropical Pacific. (NOAA)
Past preseason hurricane outlook accuracy
The skill of Colorado State’s seasonal forecasts improves as the season approaches. Looking at past predictions, the early April forecast has modest skill, while the skill increases considerably by June and especially by August.
The modest skill in early April is to be expected, given that much can change in the atmosphere/ocean system between early April and the peak of the Atlantic hurricane season. This was demonstrated clearly last season, where early seasonal forecasts issued by CSU and other agencies predicted a near- or even slightly below-normal season, given the anticipated El Niño conditions. However, by early August, most groups correctly predicted a well above-average Atlantic hurricane season, as El Niño chances diminished and the tropical Atlantic anomalously warmed.
Hindcasts from the early April statistical forecast model from 1982-2010, with real-time forecasts from 2011-2017. Accumulated Cyclone Energy is an integrated measure that takes into account tropical cyclone frequency, intensity and duration.
What could go wrong?
As is typically the case with early seasonal outlooks, the primary area of uncertainty lies in whether El Niño develops. Should a significant El Niño develop, Atlantic seasonal hurricane forecasts would likely be reduced. Alternatively, should the tropical Pacific have neutral conditions and the Atlantic were to markedly warm, seasonal forecasts would likely increase.
Many groups will issue seasonal hurricane forecasts over the next few weeks, and they will be displayed on a seasonal hurricane forecast compilation website jointly developed by the Barcelona Supercomputing Center, XL Catlin and CSU. A more detailed discussion of the 2018 outlook from CSU as well as archives of past outlooks are available here.
The 2018 list of storm names will be the same as 2012’s, with the exception of Sandy, which was retired and replaced with Sara. | It may seem like we just said goodbye to Harvey, Irma, and Maria, but the new hurricane season is near its official start of June 1. With that, Colorado State University is out with its annual Atlantic forecast, and the season looks to be a little busier than usual, reports the Weather Channel: 3 big ones: The forecast calls for 14 named storms, seven hurricanes, and three major hurricanes among those seven. All are above the 30-year average of 12 named storms, six hurricanes, and two major hurricanes. Last year: We ended up with 17 named storms, 10 hurricanes, and six major hurricanes. (The latter means category 3 and up.) 2 factors: The Washington Post notes that CSU will update its forecast on the eve of the season, and the story explains that the development of El Nino (or lack thereof) and surface temperatures in the North Atlantic could play big roles in determining how severe the new season is. |
The Centers for Disease Control and Prevention (CDC) is the federal agency primarily responsible for monitoring the incidence of foodborne illness in the United States. In collaboration with state and local health departments and other federal agencies, CDC investigates outbreaks of foodborne illnesses and supports disease surveillance, research, prevention efforts, and training related to foodborne illnesses. CDC coordinates its activities concerning the safety of the food supply with the Food and Drug Administration (FDA) in the Department of Health and Human Services and those concerning the safety of meat, poultry, and eggs with the Food Safety and Inspection Service (FSIS) in the U.S. Department of Agriculture (USDA). FDA and FSIS, which are the primary federal agencies responsible for overseeing the safety of the food supply, maintain liaison with CDC in Atlanta, Georgia. CDC monitors individual cases of illness from harmful bacteria, viruses, chemicals, and parasites (hereafter referred to collectively as pathogens) that are known to be transmitted by foods, as well as foodborne outbreaks, through reports from state and local health departments, FDA, and FSIS. CDC does not have the authority to require states to report data on foodborne illnesses. In practice, each state determines which diseases it will routinely report to CDC. In addition, state laboratories voluntarily report the number of positive test results for several diseases that CDC has chosen to monitor. However, these reports do not identify the source of infection and are not limited to cases of foodborne illness. CDC also investigates a limited number of more severe or unusual outbreaks when state authorities request assistance. (For a description of the data that CDC relies on to monitor foodborne illnesses, see app. I.) At least 30 pathogens are associated with foodborne illnesses. For reporting purposes, CDC categorizes the causes of outbreaks of foodborne illnesses as bacterial, chemical, viral, parasitic, or unknown pathogens. (See app. II. for information on these pathogens and the illnesses they cause.) Although many people associate foodborne illnesses primarily with meat, poultry, eggs, and seafood products, many other foods, including milk, cheese, ice cream, orange and apple juices, cantaloupes, and vegetables, have also been involved in outbreaks during the last decade. Bacterial pathogens are the most commonly identified cause of outbreaks of foodborne illnesses. Bacterial pathogens can be easily transmitted and can multiply rapidly in food, making them difficult to control. CDC has targeted four of them—E. coli O157:H7, Salmonella Enteritidis, Listeria monocytogenes, and Campylobacter jejuni—as those of greatest concern. (See app. III.) CDC is also concerned about other bacterial pathogens, such as Vibrio vulnificus and Yersinia enterocolitica, which can cause serious illnesses, and Clostridium perfringens and Staphylococcus aureus, which cause less serious illnesses but are very common. The chemical causes of foodborne illnesses are primarily natural toxins that occur in fish or other foods but also include heavy metals, such as copper and cadmium. Viral pathogens are often transmitted by infected food handlers or through contact with sewage. Only a few viral pathogens, such as the Hepatitis A and Norwalk viruses, have been proven to cause foodborne illnesses. Finally, parasitic pathogens, such as Trichinella—found in undercooked or raw pork—multiply only in host animals, not in food. CDC officials believe that viral and parasitic pathogens are less likely than bacterial pathogens to be identified as the source of an outbreak of foodborne illness because their presence is more difficult to detect. The existing data on the extent of foodborne illnesses have weaknesses and may not fully depict the extent of the problem. Public health experts believe that the majority of cases of foodborne illness are not reported because the initial symptoms of most foodborne illnesses are not severe enough to warrant medical attention, the medical facility or state does not report such cases, or the illness is not recognized as foodborne. However, according to the best available estimates, based largely on CDC’s data, millions of people become sick from contaminated food each year, and several thousand die. In addition, public health and food safety officials believe that the risk of foodborne illnesses is increasing for several reasons. For example, as a result of large-scale food production and broad distribution of products, those products that may be contaminated can reach a great number of people in many locations. Furthermore, new and more virulent strains of previously identified harmful bacteria have been identified in the past several decades. Also, mishandling or improper preparation can further increase the risk. Between 6.5 million and 81 million cases of foodborne illness and as many as 9,100 related deaths occur each year, according to the estimates provided by several studies conducted over the past 10 years. Table 1 shows the range of estimates from four studies cited by food safety experts as among the best available estimates on the subject. The table also identifies the data on which these estimates are based. While various foods have been implicated as vehicles for pathogens in foodborne illnesses and related deaths, the available data do not allow a precise breakdown by specific foods. In general, animal foods—beef, pork, poultry, seafood, milk, and eggs—are more frequently identified as the source of outbreaks in the United States than non-animal foods. USDA, which regulates meat and poultry products, has estimated that over half of all foodborne illnesses and deaths are caused by contaminated meat and poultry products. The wide range in the estimated number of foodborne illnesses and related deaths is due primarily to the considerable uncertainty about the number of cases that are never reported to CDC and the methodology used to make the estimate. Public health and food safety officials believe that many of these illnesses are not reported because the episodes are mild and do not require medical treatment. For example, CDC officials believe that many intestinal illnesses that are commonly referred to as the stomach flu are caused by foodborne pathogens. According to these officials, people do not usually associate these illnesses with food because the onset of symptoms occurs 2 or more days after the contaminated food was eaten. In other cases, a foodborne illness may contribute to the death of an already ill person. In these cases, a foodborne illness may not be reported as the cause of death. In the absence of more complete reporting, researchers can only broadly estimate the number of illnesses and related deaths. Furthermore, most physicians and health professionals treat patients who have diarrhea without ever identifying the specific cause of the illness. In severe or persistent cases, a laboratory test may be ordered to identify the responsible pathogen. However, some laboratories may not have the ability to identify a given pathogen. Finally, physicians may not associate the symptoms they observe with a pathogen that they are required to report to the state or local health authorities. For example, a CDC official cited a Nevada outbreak in which no illnesses from E. coli O157:H7 had been reported to health officials, despite a requirement that physicians report such cases to the state health department. Nevertheless, 58 illnesses from this outbreak were identified after public service announcements alerted the public and health professionals that contaminated hamburger had been shipped to restaurants in a specific area of the state. Food safety and public health officials believe that the risk of foodborne illnesses is increasing. Several factors contribute to this increased risk. First, the food supply is changing in ways that can promote foodborne illnesses. For example, as a result of modern animal husbandry techniques, such as crowding a large number of animals together, the pathogens that can cause foodborne illnesses in humans can spread throughout the herd. Because of broad distribution, contaminated products can reach individuals in more locations. Mishandling of food can also lead to contamination. For example, leaving perishable foods at room temperature increases the likelihood of bacterial growth, and improper preparation, such as undercooking, reduces the likelihood that bacteria will be killed and can further increase the risk of illness. There are no comprehensive data to explain at what point pathogens are introduced into foods. Knowledgeable experts believe that although illnesses and deaths often result after improper handling and preparation, the pathogens were, in many cases, already present at the processing stage. Furthermore, the pathogens found on meat and poultry products may have arrived on the live animals. Second, because of demographic changes, more people are at greater risk of contracting a foodborne illness. Certain populations are at greater risk for these illnesses: people with suppressed immune systems, children, and the elderly. In addition, children are more at risk because group settings, such as day care centers, increase the likelihood of person-to-person transmission of pathogens. The number of children in these settings is increasing, as is the number in other high-risk groups, according to CDC. Third, three of the four pathogens CDC considers the most important were unrecognized as causes of foodborne illness 20 years ago—Campylobacter, Listeria, and E. coli O157:H7. Fourth, bacteria already recognized as sources of foodborne illnesses have found new modes of transmission. While many illnesses from E. coli O157:H7 occur from eating insufficiently cooked hamburger, these bacteria have also been found more recently in other foods, such as salami, raw milk, apple cider, and lettuce. Other bacteria associated with contaminated meat and poultry, such as Salmonella, have also been found in foods that the public does not usually consider to be a potential source of illness, such as ice cream, tomatoes, melons, alfalfa sprouts, and orange juice. Fifth, some pathogens are far more resistant than expected to long-standing food-processing and storage techniques previously believed to provide some protection against the growth of bacteria. For example, some bacterial pathogens, such as Yersinia and Listeria, can continue to grow in food under refrigeration. Finally, according to CDC officials, virulent strains of well-known bacteria have continued to emerge. For example, one such pathogen, E. coli O104:H21, is another potentially deadly strain of E. coli. In 1994, CDC found this new strain in milk from a Montana dairy. While foodborne illnesses are often temporary, they can also result in more serious illnesses requiring hospitalization, long-term disability, and death. Although the overall cost of foodborne illnesses is not known, two recent estimates place some of the costs in the range of $5.6 billion to more than $22 billion per year. The first estimate, covering only the portion related to the medical costs and productivity losses of seven specific pathogens, places the costs in the range of $5.6 billion to $9.4 billion. The second, covering only the value of avoiding deaths from five specific pathogens, places the costs in the range of $6.6 billion to $22 billion. While foodborne illnesses are often brief and do not require medical treatment, they can also result in more serious illnesses and death. In a small percentage of cases, foodborne infections spread through the bloodstream to other organs, resulting in serious long-term disability or even death. Serious complications can also result when diarrhetic infections resulting from foodborne pathogens act as a triggering mechanism in susceptible individuals, causing an illness such as reactive arthritis to flare up. In other cases, no immediate symptoms may appear, but serious consequences may eventually develop. The likelihood of serious complications is unknown, but some experts estimate that about 2 to 3 percent of all cases of foodborne illness lead to serious consequences. For example: E. coli O157:H7 can cause kidney failure in young children and infants and is most commonly transmitted to humans through the consumption of undercooked ground beef. The largest reported outbreak in North America occurred in 1993 and affected over 700 people, including many children who ate undercooked hamburgers at a fast food restaurant chain. Fifty-five patients, including four children who died, developed a severe disease, Hemolytic Uremic Syndrome, which is characterized by kidney failure. Salmonella can lead to reactive arthritis, serious infections, and deaths. In recent years, outbreaks have been caused by the consumption of many different foods of animal origin, including beef, poultry, eggs, milk and dairy products, and pork. The largest outbreak, occurring in the Chicago area in 1985, involved over 16,000 laboratory-confirmed cases and an estimated 200,000 total cases. Some of these cases resulted in reactive arthritis. For example, one institution that treated 565 patients from this outbreak confirmed that 13 patients had developed reactive arthritis after consuming contaminated milk. In addition, 14 deaths may have been associated with this outbreak. Listeria can cause meningitis and stillbirths and has a fatality rate of 20 to 40 percent. All foods may contain these bacteria, particularly poultry and dairy products. Illnesses from this pathogen occur mostly in single cases rather than in outbreaks. The largest outbreak in North America occurred in 1985 in Los Angeles, largely in pregnant women and their fetuses. More than 140 cases of illness were reported, including at least 13 cases of meningitis. At least 48 deaths, including 20 stillbirths or miscarriages, were attributed to the outbreak. Soft cheese produced in a contaminated factory environment was confirmed as the source. Campylobacter may be the most common precipitating factor for Guillain-Barre syndrome, which is now one of the leading cause of paralysis from disease in the United States. Campylobacter infections occur in all age groups, with the greatest incidence in children under 1 year of age. The vast majority of cases occur individually, primarily from poultry, not during outbreaks. Researchers estimate that 4,250 cases of Guillain-Barre syndrome occur each year and that about 425 to 1,275 of these cases are preceded by Campylobacter infections. While the overall annual cost of foodborne illnesses is unknown, the studies we reviewed estimate that it is in the billions of dollars. The range of estimates among the studies is wide, however, principally because of uncertainty about the number of cases of foodborne illness and related deaths. (See app. IV.) Other differences stem from the differences in the analytical approach used to prepare the estimate. Some economists attempt to estimate the costs related to medical treatment and lost wages (the cost-of-illness method); others attempt to estimate the value of reducing the incidence of illness or loss of life (the willingness-to-pay method). Two recent estimates demonstrate these differences in analytical approach. In the first, USDA’s Economic Research Service (ERS) used the cost-of-illness approach to estimate that the 1993 medical costs and losses in productivity resulting from seven major foodborne pathogens ranged between $5.6 billion and $9.4 billion. Of these costs, $2.3 billion to $4.3 billion were the estimated medical costs for the treatment of acute and chronic illnesses, and $3.3 billion to $5.1 billion were the productivity losses from the long-term effects of foodborne illnesses. Medical expenses ranged from more modest expenses for routine doctors’ visits and laboratory tests to more substantial expenses for hospital rooms and kidney transplants. Productivity losses included expenses such as lost wages from long-term disabilities and deaths caused by foodborne illnesses. Table 2 provides information on the costs associated with each of the seven pathogens. CDC, FDA, and ERS economists stated that these estimates may be low for several reasons. First, the cost-of-illness approach generates low values for reducing health risks to children and the elderly because these groups have low earnings and hence low productivity losses. Second, this approach does not recognize the value that individuals may place on (and pay for) feeling healthy, avoiding pain, or using their free time. In addition, not all of the 30 pathogens associated with foodborne illnesses were included. In the second analysis, ERS used the willingness-to-pay method to estimate the value of preventing deaths for five of the seven major pathogens (included in the first analysis) at $6.6 billion to $22.0 billion in 1992. The estimate’s range reflected the range in the estimated number of deaths, 1,646 to 3,144, and the range in the estimated value of preventing a death, $4 million to $7 million. Although these estimated values were higher than those resulting from the first approach, they may have also understated the economic cost of foodborne illnesses because they did not include an estimate of the value of preventing nonfatal illnesses and included only five of the seven major pathogens included in the first analysis. While current data indicate that the risk of foodborne illnesses is significant, public health and food safety officials believe that these data do not identify the level of risk, the sources of contamination, and the populations most at risk in sufficient detail. More uniform and comprehensive data on the number and causes of foodborne illnesses could form the basis of more effective control strategies. Beginning in 1995, federal and state agencies took steps to collect such data in five areas across the country. While this effort will provide additional data, CDC officials believe that collecting data at more locations and for other pathogens would provide even more representative data and identify more causes of foodborne illnesses. According to public health and food safety officials, the current voluntary reporting system does not provide sufficient data on the prevalence and sources of foodborne illnesses. There are no specific national requirements for reporting on foodborne pathogens. According to CDC, states do not (1) report on all pathogens of concern, (2) usually identify whether food was the source of the illness, or (3) identify many of the outbreaks or individual cases of foodborne illness that occur. Consequently, according to CDC, FDA, and FSIS, public health officials cannot precisely determine the level of risk from known pathogens or be certain that they can detect the existence and spread of new pathogens in a timely manner. They also cannot identify all factors that put the public at risk or all types of food or situations in which microbial contamination is likely to occur. Finally, without better data, regulators cannot assess the effectiveness of their efforts to control the level of pathogens in food. According to public health and food safety officials, a better system for monitoring the extent of foodborne illnesses would actively seek out specific cases. Such a system would require outreach to physicians and clinical laboratories. CDC demonstrated the effectiveness of such an outreach effort when it conducted a long-term study, initiated in 1986, to determine the number of cases of illness caused by Listeria. This study showed that a lower rate of illness caused by Listeria occurred between 1989 and 1993 during the implementation of food safety programs designed to reduce the prevalence of Listeria in food. In July 1995, CDC, FDA, and FSIS began a comprehensive effort to track the major bacterial pathogens that cause foodborne illnesses. These agencies are collaborating with state health departments in five areas across the country to better determine the incidence of infection with Salmonella and E. coli O157:H7 and other foodborne bacteria and to identify these sources of diarrheal illness from Salmonella and E. coli O157:H7. Initially, FDA provided $378,000 and FSIS provided $500,000 through CDC to the five locations for 6 months. The agencies believe that this effort should be a permanent part of a sound public health system. For fiscal year 1996, FSIS is providing $1 million and FDA is providing $300,000. CDC provides overall management and coordination and facilitates the development of technical expertise at the sites through its established relationships with the state health departments. The project consists of three parts: a survey of the local population in the five locations and interviews with local health professionals to estimate the number of diarrheal illnesses and determine the number of illnesses for which medical attention was sought and laboratory samples were taken; a survey of laboratories to determine the microbiological testing procedures and processes used to identify foodborne illnesses and an audit of the participating laboratories’ test results to determine what proportion of cases were detected; and statistical studies to determine, among other things, the risks associated with different foods. CDC and the five sites will use the information to identify emerging foodborne pathogens and monitor the incidence of foodborne illness. FSIS will use the data to evaluate the effectiveness of new food safety programs and regulations to reduce foodborne pathogens in meat and poultry and assist in future program development. FDA will use the data to evaluate its efforts to reduce foodborne pathogens in seafood, dairy products, fruit, and vegetables. According to CDC, FDA, and FSIS officials, such projects must collect data over a number of years to identify national trends and evaluate the effectiveness of strategies to control pathogens in food. Funding was decreased slightly for this project in 1996, and these officials are concerned about the continuing availability of funding, in this era of budget constraints, to conduct this discretionary effort over the longer term. We provided copies of a draft of this report to CDC, FSIS, and FDA for their review and comment. We met with the Director, Division of Bacterial and Mycotic Diseases, CDC; the Associate Administrator, FSIS; and other relevant officials from both agencies. These officials generally agreed with the information discussed and provided some clarifying comments that we incorporated into the report. FDA’s Office of Legislative Affairs notified us that FDA generally agreed with the contents of the report and provided several technical comments that we incorporated. To conduct this review, we spoke with, and obtained studies, data, and other information on foodborne illnesses from, officials at CDC, ERS, FDA, and FSIS. We met with these officials at their headquarters in Atlanta, Georgia, and Washington, D.C. To examine the frequency of foodborne illness, we met with agency officials to identify and discuss the most widely recognized studies on the incidence of foodborne illness in the United States and obtained documentation. To examine the health consequences of foodborne illnesses, we relied primarily on discussions with medical experts at CDC and articles that have appeared in professional journals obtained from CDC officials and our literature review. To examine the economic impacts of foodborne illnesses, we reviewed the analytical approaches used to estimate the costs of foodborne illnesses and recent examples of such estimates and spoke with economists at CDC, ERS, and FDA. To examine the adequacy of knowledge about foodborne illnesses to develop effective control strategies, we spoke with the project managers from CDC, FDA, and FSIS and other agency officials associated with a joint effort with five state health departments recently undertaken to improve their knowledge about foodborne illnesses and collected agency documents. We reviewed but did not independently verify the accuracy of the data available on the number of reported cases of foodborne illness, the overall estimates of incidence, or the estimates of costs from specific pathogens because this effort would have required the verification of multiple databases and other information from state and federal agencies and other sources. This verification process would have required a large commitment of additional resources. We did not review data on the incidence of foodborne illness in other countries because comparable data were not readily available and the data that are available have some of the same limitations as the data on U.S. foodborne illnesses. We conducted our review from June 1995 through April 1996 in accordance with generally accepted government auditing standards. We are sending this report to you because of your role in overseeing the activities and funding of the agencies responsible for the issues discussed. If you or your staff have any questions about this report, I can be reached at (202) 512-5138. Major contributors to this report are listed in appendix V. To monitor, control, and prevent foodborne illnesses, the Centers for Disease Control and Prevention (CDC) relies primarily on four types of data from local and state health departments, according to CDC officials. These four types of data are shown in table I.1. Reported annually for most outbreaks (more frequently for outbreaks of E. coli O157:H7 and Salmonella Enteritidis) As table I.1 notes, each type of data has limitations, particularly the outbreak and laboratory data, which have been CDC’s primary monitoring tools. More specifically, in about half of the outbreaks as shown in figure I.1, the data do not identify the agent that caused the outbreak. Furthermore, these data generally do not provide information about the cause of a new trend. One or more factors can account for a new trend: a change in consumption behavior, such as a preference for turkey over red meat; a reporting bias, such as an increase in the number of laboratories testing for the disease; or a change in the nature of the disease, such as the emergence of a new strain. Finally, there is a delay from the time these data are reported to CDC until they are compiled into annual summaries. At the time of our review, complete annual summaries of data were only available through 1991. Furthermore, CDC’s laboratory data, from its Public Health Laboratory Information System, represent only a fraction of the cases of illnesses that occur from four pathogens that CDC tracks. For example, only one confirmed case of infection was cited in the laboratory data that the Georgia Health Department reported to CDC during an outbreak caused by contaminated ice cream products in 1994. However, on the basis of a survey of home delivery customers that it conducted, CDC estimated that 11,404 cases occurred in Georgia alone (products were distributed in 48 states). Finally, these data do not include information about the source of the illness. In addition to its program activities to monitor, control, and prevent foodborne illnesses, CDC collects national data on a range of pathogens and illnesses from a variety of data sources. These sources include the National Notifiable Diseases Surveillance System, the National Hospital Discharge Survey, the National Ambulatory Medical Care Survey, the National Health Interview Survey, and the National Vital Statistics System. Researchers use these data to estimate the number of foodborne illnesses, their severity, and their costs. But these data have major limitations for understanding foodborne illnesses, primarily because they rarely identify the specific pathogen or indicate the method of transmission. For example, illnesses, such as those caused by E.coli O157:H7, cannot always be distinguished from other similar illnesses. Researchers may supplement national data with data from health maintenance organizations or community health studies. Such studies provide more detailed information about foodborne illnesses but are limited to small samples and have only been done occasionally. Although foodborne illnesses are often short term and do not require medical treatment, in some cases, these illnesses can involve other organs, resulting in serious complications. In other cases, foodborne illnesses may not result in immediate symptoms but ultimately may produce serious health problems. CDC has classified the causes of foodborne illnesses into the following four categories: Bacterial pathogens are microorganisms that can be seen with a microscope but not with the naked eye. Some bacterial pathogens are infectious themselves or can produce toxins. Furthermore, bacteria can multiply rapidly in food, making them difficult to control and can be transmitted through person-to-person contact. Some bacteria, such as Clostridium botulinum, which causes botulism, can form spores in food that can resist some food preservation treatments, including boiling. Chemical agents are primarily naturally occurring toxins that can enter the food supply. Paralytic shellfish poisoning and mushroom poisoning are caused by such chemicals. Heavy metals—such as cadmium, copper, iron, tin, and zinc—are also included in this category. These pathogens can cause a variety of gastrointestinal, neurologic, respiratory, and other symptoms. Viral pathogens are too small to be seen with a conventional microscope. Only a few viral pathogens, such as the Hepatitis A and Norwalk viruses, have been proven to cause foodborne illnesses. Viral pathogens are often transmitted by infected food handlers or through contact with sewage. Parasitic pathogens are larger than bacterial pathogens and include protozoa (one-celled microorganisms) and multicelled parasites. They multiply only in host animals, not in food. Protozoa form cysts that are similar to spores but less resistant to heat. Cysts can be transmitted to new hosts through food that has been eaten. Multicelled parasites, such as Trichinella spiralis, which causes trichinosis, occur in microscopic forms, such as eggs and larvae. Thorough cooking will destroy larvae. While the likelihood of serious complications from foodborne illnesses is unknown, some researchers estimate that about 2 to 3 percent of all cases of foodborne illness lead to serious consequences. Although anyone can suffer from foodborne illnesses, certain populations are more at risk from them or their complications than others: pregnant women, children, those with compromised or suppressed immune systems, and the elderly. These groups are more at risk because of altered, underdeveloped, damaged, or weakened immune systems. Table II.1 provides information on several foodborne pathogens, the serious complications they may result in, and some of the foods in which they have been found. In 1990, the Public Health Service identified E. coli O157:H7, Salmonella, Listeria monocytogenes and Campylobacter jejuni as the four most important foodborne pathogens in the United States because of the severity and the estimated number of illnesses they cause. According to CDC officials, illnesses caused by E. coli O157:H7 and Listeria monocytogenes are generally more deadly than illnesses caused by other foodborne pathogens. In contrast, illnesses caused by Salmonella and Campylobacter jejuni are less likely to be deadly but are more common. This appendix discusses the estimated number of cases of foodborne illness caused by these pathogens. E. coli O157:H7 has emerged as an important cause of outbreaks of foodborne illness in the United States since 1982. (See fig. III.1). Because few laboratories in the United States routinely test for E. coli O157:H7, the actual number of illnesses caused by this pathogen is unknown, but CDC officials estimate that this pathogen causes approximately 21,000 illnesses annually. As shown in figure III.2, only 33 states required reporting of such illnesses through the end of 1994, according to information provided by CDC. Figure III.3 provides estimates of the percentage of people who recover, remain ill, or die from E. coli O157:H7. On the basis of population-based studies, CDC officials estimate that between 800,000 and 4 million illnesses from the more than 2,000 strains of Salmonella occur each year in the United States. In 1994, one strain, Salmonella Enteritidis, accounted for more than 25 percent of all reported infections from Salmonella. Confirmed laboratory reports of the Salmonella Enteritidis strain increased from 3,322 to 10,009 between 1982 to 1994. While the number of outbreaks from Salmonella Enteritidis has declined since 1989, over 5,000 people, more than in any other year, became ill from the 44 outbreaks reported in 1994. Figure III.4 shows the estimated percentage of people who recover or die from all strains of Salmonella. CDC estimates that the number of illnesses and deaths caused by Listeria monocytogenes declined between 1989 and 1993, from 1,965 cases and 481 deaths to 1,092 cases and 248 deaths. CDC attributes this downward trend to prevention efforts implemented by the food industry and regulatory agencies. Figure III.5 shows the estimated percentages of people who recover, remain ill, or die from Listeria monocytogenes. According to CDC, Campylobacter jejuni is the most common bacterial cause of diarrhea in the industrialized world. An estimated 2 million to 4 million cases occur each year in the United States, according to population-based studies. Although the number of Campylobacter jejuni cases confirmed by laboratory reports represents only a small proportion of the total number of illnesses that are estimated to occur from Campylobacter jejuni, the reported number more than doubled from 3,947 in 1982 to 7,970 in 1989. Most cases of illness occur sporadically and not as part of an outbreak. Illness can occur from contact with raw foods (often poultry) during food preparation. Figure III.6 shows the estimate of the percentage of people who recover or die from Campylobacter jejuni. This appendix provides information on the cost of foodborne illnesses using both the cost-of-illness and the willingness-to-pay methods. The range of estimates is wide, however, principally because of uncertainty over the number of cases of foodborne illness and deaths. Table IV.1 provides the estimated number of illnesses and deaths in 1993 used to calculate the cost-of-illness estimate. As the table indicates, food was the most frequent source of contamination for five of the seven pathogens the U.S. Department of Agriculture’s (USDA) Economic Research Service examined. CDC has targeted four of these seven pathogens as the most threatening foodborne pathogens. Table IV.2 presents cost-of-illness estimates for all foodborne illnesses and illnesses from meat and poultry. Contaminated meat and poultry are believed to be among the most common sources of foodborne illness from these pathogens. ERS also used the willingness-to-pay method to estimate the value of preventing deaths for five of the seven major pathogens. The results of this analysis are shown in table IV.3. Edward M. Zadjura, Assistant Director Jay Cherlow, Assistant Director for Economic Analysis Daniel F. Alspaugh, Project Leader Carol Herrnstadt Shulman Jonathan M. Silverman The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | GAO reviewed the extent of foodborne illnesses caused by microbal contamination, focusing on: (1) the frequency, health consequences, and economic impacts of these illnesses; and (2) the extent of information available to develop effective control strategies. GAO found that: (1) between 6.5 million and 81 million cases of foodborne illness and as many as 9,100 related deaths occur each year; (2) the risk of foodborne illness is increasing due to changes in food supply and consumption, recognition of new causes of foodborne illnesses, new modes of transmission, increased resistance to long-standing food-processing and storage techniques, and emerging virulent strains of well-known bacteria; (3) while foodborne illnesses are most often brief and do not require medical care, a small percentage cause long-term disability or even death; (4) foodborne illness may cost billions of dollars every year in medical costs and lost productivity; (5) the current voluntary reporting system does not provide sufficient data on the prevalence and sources of foodborne illnesses; (6) efforts are under way to collect more and better data on the prevalence and sources of foodborne illnesses; and (7) more uniform and comprehensive data on the number and causes of foodborne illnesses could lead to more effective control strategies. |
Let's just put it right out there: Never in the history of mankind has a movie been more phallic-ly fixated than "The Watch."This R-rated Freudian foolishness stars some of the usual suspects known to traffic in prurient puns — Ben Stiller, Vince Vaughn and Jonah Hill. The very funny Richard Ayoade, representing the more restrained British point of view on things of a sexual nature, completes the film's foursome. Some of the phallic jokes work, others are really lame. Fortunately there are many other funny bits that have nothing to do with body parts that keep the laughs coming.
Theoretically, this is a story about some ordinary guys who form a neighborhood watch in lovely little Glenview, Ohio, after a killing at a Costco confounds the local cops (a funny Will Forte and a grunting Mel Rodriguez). They soon discover aliens from outer space are involved. Major stakeouts and smack-downs follow, along with a huge fashion fiasco involving tiger logos and satin jackets.
There are some clever big-box store jokes, which anyone who has been to a Costco will appreciate. There are a few alien zingers, including one funny photo session. But really, those are just Trojan horses (and yes, the other kind of Trojans factor in too). The real comic assault comes from an unending string of below-the-belt riffs.
It's as if someone challenged "Superbad" funny guy Seth Rogen, who wrote the script with Jared Stern and Evan Goldberg, to see if he could slip in every slang term for that private part ever conceived, along with every way in which it can be used and abused. Who knew it was possible for a movie's very plot to hang on the male member? But that, ladies and gentlemen, is exactly what the writers have done. No stone is left unturned.
The film is directed by Akiva Schaffer, who is mostly known for a long run directing (and writing) "Saturday Night Live"(unless you consider 2007's "Hot Rod" starring "SNL" vet Andy Samberg a seminal film, which I don't). That actually explains a lot about the woes of "The Watch." Many of the individual sketches are very funny, in that dumb-dudes-doing-dumb-things kind of way. It's the transitions where things tend to fall apart. (And there is at least one glaring continuity gaff. It involves Vaughn's Bob getting bloodied in a fight only to turn up two seconds later totally untouched; no bruises or busted nose in sight.)
Evan (Stiller) is the main instigator of all the action, with the actor doing his typical uptight everyman shtick. A manager at the Costco, his civic pride is off the charts. He leads a running club and a Spanish club, anything so he won't have to have s-e-x with wife Abby (Rosemarie DeWitt). She wants a baby, and he can't. I don't mean he "can't," or doesn't want a baby. He does. It's his "guys" that are the problem — they don't count, don't pack a punch, can't seal the deal.... I won't go on, but they will, relying on classic Vaughn mumblecore to handle the bit, which makes it funnier than by rights it should be.
Abby doesn't know anything except that making love seems to be off the table, although there's a pretty funny scene when she tries to put it back on the table. Wink, wink.
When the Costco night guard is murdered and the cops don't have a clue, Evan decides to start a neighborhood watch. Lots of fliers are posted, but only three guys show up for the first meeting. There is Bob, with his killer man cave and problem teenage daughter Chelsea (Erin Moriarty) — boyfriend Jason (Nicholas Braun) being the main problem. Franklin (Jonah Hill) is a fatigue-wearing police force reject who couldn't clear the psych exam. He will be in charge of any weaponry, of course. And finally Jamarcus (Ayoade) shows up. He's newly divorced and hoping that there might be a desperate housewife he could assist.
The guys start patrolling, when they're not hanging out doing male-bonding stuff in Bob's man cave. They have a lot of close encounters with the cops. There are other close encounters with the aliens. There are conflicts with one another. Pop culture references abound too, a running gag about NickelodeonKids' Choice Awards-like green slime most prominently.
The funniest stuff comes from the kind of situational misfires that can happen when dudes try to do things, like catch aliens, that they are clearly not cut out to do. But really it's all about the you-know-what. Oh, and when it comes to the big reveal of the intergalactic invaders' major weakness — a psychiatrist could have a field day with that one.
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[email protected] ||||| Suburban paranoia can be as funny as it can be dangerous. But in "The Watch," which was renamed from "Neighborhood Watch" to distance itself from the Trayvon Martin killing in Florida, the threat to an ordered Ohio town isn't anything with contemporary resonance. It's just aliens.
This film image released by 20th Century Fox shows, from left, Jonah Hill, Ben Stiller, Richard Ayoade and Vince Vaughn in a scene from "The Watch." (AP Photo/20th Century Fox, Melinda Sue Gordon) (Associated Press)
This film image released by 20th Century Fox shows, from left, Ben Stiller, Johnny Pemberton and Jonah Hill in a scene from "The Watch." (AP Photo/20th Century Fox, Melinda Sue Gordon) (Associated Press)
That's the disappointing basis of "The Watch," which unfolds not in a way that might have anything funny or enlightening to say about picket-fence fearfulness, but simply with conventional summer movie bombast.
Evan Troutwig (Ben Stiller) is as devoted to Glenville, Ohio, as Max Fischer was to Rushmore Academy. Though he and his wife (an underused Rosemarie DeWitt) are trying to have a kid, he puts most of his energy into the town through various community groups and his senior management position at Costco.
This is a particularly earnest Ben Stiller: "I don't have any black friends yet, but I am on the market," he says. But Evan's enthusiasm is shattered when a friend and Costco security guard (Joseph A. Nunez) is mysteriously mauled overnight. When Evan makes neighborhood safety his new cause (his sweatshirt: "No More Murders"), his rally for support draws derision and only three volunteers.
They're a motley lot: Bob, a father of a teenager looking for a guy's night out (Vince Vaughn); Franklin, a police department-reject with a buzz cut and switchblade (Jonah Hill); and Jamarcus, a divorced, afroed Brit (the wry, poised Richard Ayoade, who directed the promising "Submarine" and nearly steals the movie).
At this point, Vaughn ("Wedding Crashers," "Old School") can claim suburbia to be his domain. No one better typifies the man-cave father, the 9-to-5er, the frat boy with a family.
Vaughn's family man isn't without parody (he introduces himself as "Bob with `B,'" chuckling mildly) but he's undiminished by adulthood's trappings, full of crazy-eyed brio and the manic positivity to, as he does in "The Watch," design neighborhood watch jackets for the gang with a flaming, winged tiger icon.
Some will say the act is old, but Vaughn could do this as long as John Wayne played a cowboy, as far as I'm concerned. Watching him marvel at each layer of a Russian nesting doll, as he does here, is nearly worth the price of admission.
The crew is slow to develop, harassed by dismissive cops (a funny Will Forte) and egg-throwing high-schoolers. But they make some headway and eventually crack open the case: Aliens are invading Glenville.
Action and comedy are nearly always strange bedfellows, and "The Watch" is no exception. Introducing extraterrestrials puts the story on a familiar trajectory of chases and explosions filled with mock-tough guy slow motion. At this point, Jonah Hill pointing in slo-mo is getting a little tiresome.
"The Watch" was originally drafted by Jared Stern to be a younger, PG-13 movie with Shawn Levy ("Night at the Museum") directing, but that changed when Seth Rogan, Evan Goldberg and Justin Theroux rewrote it. Their raunchier tone has an almost paint-by-numbers feeling to it now, after better films like "Superbad" and "Pineapple Express." Though many of the jokes land, some of them feel like a game of penis-related Mad Libs.
Directing is Akiva Schaffer, one third of the Lonely Island trio (Schaffer, Andy Samberg and Jorma Taccone make a quick cameo) and a "Saturday Night Live" writer famous for the popular digital shorts. This is his second feature after 2007's "Hot Rod," and while he clearly has the ability to pull funny out of his cast, he doesn't here show any visual and narrative distinction that separates him from the growing pack of comedy directors.
His most interesting choice is to make the aliens far more fearsome and detailed than a comedy would normally accommodate. Contortionist Doug Jones ("Pan's Labyrinth," "Hellboy") plays the alien, a sci-fi realism that makes a few jokes funnier but ultimately highlight's the film's incongruities. (Better is the suspected alien, a creepy Billy Crudup.)
The mission of the neighborhood watch gang stresses their budding friendships, pulling them apart before pushing them back together. Or was that the plot of "21 Jump Street"? Maybe it was "Get Him to the Greek"? Hold on, could it have been "Paul"?
"The Watch," a 20th Century Fox release, is rated R for some strong sexual content including references, pervasive language and violent images. Running time: 102 minutes. Two stars out of four.
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Motion Picture Association of America rating definitions:
G _ General audiences. All ages admitted.
PG _ Parental guidance suggested. Some material may not be suitable for children.
PG-13 _ Special parental guidance strongly suggested for children under 13. Some material may be inappropriate for young children.
R _ Restricted. Under 17 requires accompanying parent or adult guardian.
NC-17 _ No one under 17 admitted. ||||| Timid Close Encounters of the Small-Town Kind ‘The Watch,’ With Ben Stiller and Vince Vaughn
In the cheerfully pious voice-over that begins “The Watch,” a ramshackle science-fiction comedy desperate for laughs, the movie’s narrator, Evan ( Ben Stiller ), proclaims his hometown, Glenview, Ohio, the most wonderful place in the universe. He insists that he is not in the least interested in what might be “out there,” or in living anywhere else.
Evan has second thoughts upon discovering a hive of lobster-y extraterrestrials nesting in the basement of the Costco that he manages. The invaders’ first strike against humanity is the murder of the store’s security guard. As the movie shuffles aimlessly along, Evan’s baby blues widen with fright and fascination like those of Henry Thomas, as Elliott, in “E.T.: The Extraterrestrial.”
The aliens, armed with laser guns, are tricky little devils who don’t reveal themselves completely until late in the movie. In a whimsical nod to “E.T.,” Evan’s initial contact, in which a creature gracefully accepts a piece of gum, seems benign.
Joking references to an ’80s blockbuster don’t mean that “The Watch” is a throwback. With its endless phallic jokes — references to Magnum condoms, green alien blood with the texture of semen, panic about infertility (Evan is afraid to tell his wife that he is “shooting blanks”) and well-endowed invaders with brains in their genitals — “The Watch” is the latest in a wave of comedies drenched in male sexual anxiety.
Directed by Akiva Schaffer from a screenplay by Jared Stern, Seth Rogen and Evan Goldberg, the movie clumsily juggles two loosely connected concepts. In the spirit of “The Hangover,” it is a whimsical, potty-mouthed buddy movie that lunges for laughs with bursts of profanity; it is also a spoof of “Invasion of the Body Snatchers,” in which the aliens disguise themselves as humans.
Paranoia radiates outward from the groin in every direction. In one scene Evan and fellow members of the neighborhood watch group he leads are so consumed with suspicion while in a supermarket that images of a child licking an ice cream cone or of a woman inspecting a grapefruit are fraught with terror. Unwittingly or not, the movie satirizes the national obsession with security with lethal accuracy.
Evan, who founded the watch group, is one of its two members who are unequivocal wimps. A friendless control freak who fancies himself a model citizen, he is so afraid of incurring the wrath of his wife, Abby (Rosemarie DeWitt, in a barely sketched role), that he is reluctant to sleep with her. The other wimp is Franklin (Jonah Hill), a creepy gun nut who still lives with his mother and is still smarting from being rejected by the police. But underneath his ridiculous macho preening is a quivering marshmallow.
They are joined by Bob (Vince Vaughn), a boisterous, beer-loving jock who is pathologically obsessed with the purity of his teenage daughter, and Jamarcus (the British comedian Richard Ayoade, ill used and unfunny), an eccentric wild card with a fetish for Asian women. They form the most timid and incompetent quasi-vigilante group you could hope to encounter in a small town.
The movie builds to a human-versus-alien showdown so sloppily staged that it makes little visual sense. The bargain-basement pyrotechnics suggest that much of “The Watch” was filmed on autopilot on a strict budget.
“The Watch” is rated R (Under 17 requires accompanying parent or adult guardian). It has strong language, profanity and violence.
The Watch
Opens on Friday nationwide.
Directed by Akiva Schaffer; written by Jared Stern, Seth Rogen and Evan Goldberg; director of photography, Barry Peterson; edited by Dean Zimmerman; music by Christophe Beck; production design by Doug Meerdink; costumes by Wendy Chuck; produced by Shawn Levy; released by 20th Century Fox. Running time: 1 hour 38 minutes.
WITH: Ben Stiller (Evan), Vince Vaughn (Bob), Jonah Hill (Franklin), Richard Ayoade (Jamarcus) and Rosemarie DeWitt (Abby). ||||| Fox's sci-fi comedy 'The Watch' opens wide July 27.
A 20th Century Fox release presented in association with Dune Entertainment of a 21 Laps production. Produced by Shawn Levy. Executive producers, Dan Levine, Monica Levinson. Co-producers, Jeffrey J.P. Wetzel, Billy Rosenberg, Tom McNulty, Blondel Aidoo. Directed by Akiva Schaffer. Screenplay, Jared Stern, Seth Rogen, Evan Goldberg.
Evan - Ben Stiller
Bob - Vince Vaughn
Franklin - Jonah Hill
Jamarcus - Richard Ayoade
Abby - Rosemarie DeWitt
Sgt. Bressman - Will Forte
Hero Alien - Doug Jones
Greenlit in 2009 with Will Ferrell and director David Dobkin attached, the R-rated Fox laffer has endured an unusual number of development/production challenges for a studio comedy, including a cast overhaul, a thorough reworking of Jared Stern's original script by Seth Rogen and Evan Goldberg, and the eventual attachment of "Hot Rod" helmer Akiva Schaffer to direct. Until just two months ago, the pic was set to be released under the title "Neighborhood Watch," which was altered to avoid associations with George Zimmerman, the neighborhood watch volunteer recently charged with murder in the Trayvon Martin case.
Coherence and continuity are scarcely top priorities for this sort of scrappy enterprise, and "The Watch" seems to have emerged from its travails unscathed but uninspired. What's onscreen feels as half-assed and juvenile as it was probably always envisioned to be, suggesting an umpteenth retelling of "Invasion of the Body Snatchers" by way of "The Hangover," or perhaps a far less inspired version of "Attack the Block" transplanted to small-town Ohio.
Straight-laced model citizen and Costco manager Evan (Stiller) springs into action when one of his warehouse security guards is found horribly murdered. Dissed by the investigating police sergeant (the reliable Will Forte), Evan announces he's starting a neighborhood watch group, assembling a bumbling band of volunteers: rowdy family man Bob (Vaughn); screw-loose, switchblade-wielding bachelor Franklin (Jonah Hill); and mild-mannered, recently divorced Jamarcus (Richard Ayoade).
All these guys seem more interested in guzzling beer and goofing off than in protecting the town, to the uptight Evan's chagrin. But bonds of solidarity form when, after a series of failed stakeouts and false alarms, the group stumbles on evidence of an alien invasion -- namely, a puddle of green goo that has the same consistency as human seminal fluid. That brilliant deduction is made by Vaughn's verbally incontinent Bob, leading the charge to push the pic's sensibility as far into the gutter as it can go.
Vaughn's steady, semi-improvised stream of mostly groin-focused gags steals what laughs there are, forcing his co-stars into a reactive posture. Stiller remains stuck in his familiar uptight, straight-man mode, while Hill gets some memorable moments seemingly by voicing whatever sociopathic utterances leapt to mind on-set. By far the freshest face and most offbeat casting choice is British multihyphenate Ayoade, whose mellow, nerdy-funky appeal reps one of the pic's few novel aspects, even if it never pays off with a characterization as distinctive as his role on "The IT Crowd."
These four guys make pretty decent company; their back-and-forth amuses in bits and spurts, though scarcely enough to sustain a concept that feels unduly protracted at 101 minutes, the last 20 of which are devoted to a routine action-movie blowout. Apart from one legitimately funny sequence that sees the group getting a bit too friendly with an alien corpse, the action-comedy hybrid never hits the sweet spot.
Typically for this sort of frathouse-mentality romp, the humor flows with weird ease between offensive and reassuring, between crude ethnic jabs and soothing family-values uplift. The Latino characters are there to be disemboweled as quickly and gruesomely as possible (Joseph A. Nunez does the honors as the first victim), and women exist to be protected or consoled, as seen in subplots involving Bob's rebellious teen daughter (Erin Moriarty) and Evan's long-neglected wife (Rosemarie DeWitt, who, not unlike her character, deserves better).
Camera (Deluxe color, widescreen), Barry Peterson; editor, Dean Zimmerman; music, Christophe Beck; music supervisor, George Drakoulias; production designer, Doug Meerdink; art director, David Sandefur; set designers, George Lee McDonnell, Sheila Nash, Scott Baker; set decorator, Cindy Carr; costume designer, Wendy Chuck; sound (Dolby/Datasat), Whit Norris; supervising sound editors, Derek Vanderhorst, John A. Larsen; re-recording mixers, D.M. Hemphill, Ron Bartlett; special effects coordinator, Steven Riley; visual effects supervisor, Kelly Port; visual effects and animation, Digital Domain; live-action alien effects, Legacy Effects; stunt coordinator, Jack Gill; assistant director, Jeffrey J.P. Wetzel; second unit director, Jack Gill; second unit camera, Jonathan Taylor, Patrick Capone; casting, Alyssa Weisberg. Reviewed at 20th Century Fox Studios, July 24, 2012. MPAA Rating: R. Running time: 101 MIN.
With: R. Lee Ermey, Nicholas Braun, Joseph A. Nunez, Mel Rodriguez, Erin Moriarty, Akiva Schaffer, Andy Samberg, Jorma Taccome.
From the functional lensing to the over-emphatic soundtrack choices, tech credits are nothing special, though the creature designs and death-ray f/x prove more than serviceable for the pic's needs. Helmer Schaffer has a brief cameo with his Lonely Island collaborators Andy Samberg and Jorma Taccone in an orgy sequence presided over, rather randomly, by Billy Crudup. | The Watch—which, before Trayvon Martin's death, was supposed to be called Neighborhood Watch—is part buddy film, part alien-invasion flick, sprinkled liberally with jokes about the male anatomy. Despite Ben Stiller, Jonah Hill, and Vince Vaughn, the movie doesn't really work: Writing in Variety, Justin Chang calls the film a "lowbrow, lame-brained mash-up of buddies-on-patrol comedy and sci-fi actioner, held together (barely) by an endless string of penis jokes." It's a "ramshackle science-fiction comedy desperate for laughs," writes Stephen Holden in the New York Times, and it appears to have been "filmed on autopilot on a strict budget." At the AP, Jake Coyle agrees that the movie has an "almost paint-by-numbers feeling to it" following "better films like Superbad and Pineapple Express.'" And "though many of the jokes land, some of them feel like a game of penis-related Mad Libs." "Never in the history of mankind has a movie been more phallic-ly fixated than The Watch," notes Betsy Sharkey in the Los Angeles Times. Still, its non-penis-related jokes "keep the laughs coming." |
The SNP has staged an unprecedented and historic landslide general election rout in Scotland that saw Labour all but wiped out in its former stronghold and the United Kingdom facing a major new threat to its future.
On an extraordinary night north of the Border that left any hope Ed Miliband had of winning power in tatters, the Nationalists polled more than 50 per cent of the votes and won 56 of Scotland’s 59 seats compared to just one for the Labour, one for the Tories and one for the Liberal Democrats.
Among the high-profile casualties were Jim Murphy, the Scottish Labour leader and Douglas Alexander, the Shadow Foreign Secretary. Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, Charles Kennedy, the former Liberal Democrat leader, also lost their seats in the Nationalist tsunami.
Lib Dem's Danny Alexander
Constituency after constituency in Scotland’s former industrial heartlands, most held by Labour for decades, fell as its support collapsed across the country and moved wholesale with record swings to Nicola Sturgeon’s party. Only Ian Murray in Edinburgh South managed to cling on
The SNP won all seven seats in Glasgow and even Kirkcaldy and Cowdenbeath, Gordon Brown’s former seat, where Labour was defending a majority of more than 23,000. Turnout in many of the seats was more than 70 per cent, a legacy of last September’s referendum.
Nicola Sturgeon looks delighted at the Glasgow count
Nicola Sturgeon said the “tectonic plates” of Scottish politics had shifted and Alex Salmond, who was the comfortable victor in the former Lib Dem-held constituency of Gordon, said that a “Scottish lion” had roared and no UK Government could ignore it.
But a defiant Mr Murphy, who vowed to fight on as Scottish Labour leader, warned the Nationalists they now had a responsibility not to conflate their party “with our country”.
However, Ian Davidson, who lost his Glasgow South West seat to the SNP, savaged the Scottish Labour campaign and said Mr Murphy should do the “honourable thing” and resign.
The astonishing scale of the result cast a major shadow over the Union less than eight months after Scots convincingly rejected independence and raised questions over whether David Cameron would have a mandate to govern north of the Border.
George Osborne, the Chancellor, said that the rise of the SNP presented a "huge challenge" for the Conservatives. "The Conservative party has been shut out of too many constituencies in Scotland for a long time. The Labour Party has now been shut out too. We have to listen to what the Scottish people are telling us," said Mr Osborne.
Sir Menzies Campbell, the former Scottish Liberal Democrat leader, said Scotland must prepare itself for a second independence referendum.
Labour's Jim Murphy loses his seat
Although Ms Sturgeon insisted she would not use a landslide to push for another vote, earlier this week she said that a UK Government would not be “legitimate” unless it had the support of Scottish MPs, a claim vehemently rejected by Mr Cameron in an interview with the Telegraph.
She said: “This is shaping up to be an outstandingly good night for the SNP but I think a good night for Scotland. The tectonic plates of Scottish politics have clearly shifted – what we are seeing is a historic shift in Scottish political opinion.
“It hasn’t happened overnight, not even in the last seven months since the referendum, although that’s accelerated the process, but Labour has been losing the trust of people in Scotland now over a period of years.”
Rejecting Labour claims she is to blame for Mr Cameron’s imminent victory, she said that if the parliamentary arithmetic does not mean the Tories can be “locked out” of Downing Street “that will be because Labour has failed to beat the Conservatives in England. Labour cannot blame the SNP for that.”
David Cameron looked delighted
Ms Sturgeon insisted she would not do a deal with the Prime Minister to get full fiscal autonomy, adding: “The Tories cannot ignore what has happened in Scotland tonight – Scotland has clearly voted for an end to austerity and more investment in our public services and a stronger economy. These are the messages we will now take to the very heart of Westminster.”
In his victory address, Mr Salmond said: “There’s a swing underway in Scotland the like of which has not been seen in recorded politics. It is twice the level of any swing recorded in Scotland or indeed across the United Kingdom since electoral records began in 1835.
“It’s an extraordinary statement of intent from the people of Scotland. The Scottish lion has roared this morning across the country.”
He added: “It is inconceivable that such a statement of unity from the people of Scotland – north, south, east and west – can possibly be ignored by any administration of any complexion.”
Speaking immediately after his defeat, a defiant Mr Murphy said “the fight back starts tomorrow”. He said: "It has proven hard to turn round years of difficulty with the Scottish Labour Party in just five short months.
"There will be more to say about this and what it means for Scotland in the days to come, but for me personally and for the Scottish Labour Party the fight goes on and our cause continues. The party that has traditionally been the timeless champion of the underdog now finds itself in the position of being the underdog.”
Annabel Goldie, the former Scottish Tory leader, argued it was now inevitable that Ms Sturgeon will include a “carefully caveated” pledge for a second referendum in her manifesto for next year’s Holyrood election.
She predicted that the document would reserve the right to call another vote if there was a “material change” in circumstances, but that the SNP would be the sole arbiter in deciding if this test was met.
Speaking as he conceded defeat in Linlithgow and Falkirk East, Michael Connarty, the incumbent Labour candidate, said the SNP had “misled and betrayed” the people of Scotland with their “spin” based on a "cult of personality" around Ms Sturgeon.
• Who is Nicola Sturgeon?
Rather than being a decisive influence on a Labour Government, as the First Minister claimed, he said they would be a noisy irrelevance with the Tories retaining power.
The first sign of the SNP rout came when an exit poll published at 10pm predicted that the SNP was on course to win 58 seats, all but one in Scotland, but that the Tories and Lib Dems would together just have enough to hold a Commons majority.
This was immediately treated with extreme scepticism by senior politicians from Labour, the Tories and the SNP, but it became apparent that it was more accurate than any of them suspected.
The first Scottish declaration, in Kilmarnock and Loudon, confirmed hours of rumours that the Labour and Lib Dem vote had totally collapsed and moved wholesale to the Nationalists, a pattern that was later repeated across the country.
Cathy Jamieson, a former Scottish minister and Shadow Treasury Minister, lost her seat to the SNP’s Alan Brown with a swing of 26 per cent.
Douglas Alexander, the Shadow Foreign Secretary and the coordinator of Labour’s UK election campaign, then lost his Paisley and South Renfrewshire seat by 5,684 votes to 20-year-old Mhairi Black, who became the youngest MP for 350 years.
Mhairi Black, Britain's youngest MP
Mr Alexander said Scots had rejected the Conservatives but have “not placed that trust in the Labour Party” and it had to regain that trust. Seat after seat then tumbled to the SNP with records for electoral swings being smashed.
The Nationalists even managed to take Gordon Brown's former seat of Kirkcaldy and Cowdenbeath with majority of 9,974 a swing of 35 per cent. Mr Murphy lost his Renfrewshire East seat to the SNP’s Kirsten Oswald with a swing of 31.7 per cent.
All the Lib Dems’ 10 mainland seats also fell, with employment relations minister Jo Swinson losing her Dunbartonshire East constituency and Mr Salmond comfortably taking Gordon by 8,687 votes.
It was nearly 4am by the time a Scottish seat fell to a party other than the SNP, with Alistair Carmichael, the Lib Dem Scottish Secretary, clinging on in Orkney and Shetland by 817 votes.
Mr Murray won by 2,637 votes from Neil Hay, the SNP candidate, who was exposed during the campaign as having been a Cybernat troll who compared No voters in last year’s referendum to Nazi collaborators.
David Mundell, who was the only Tory MP in Scotland at the 2010 election, managed to hold his Dumfriesshire, Clydesdale and Tweeddale seat. But Mr Kennedy lost his Ross, Skye and Lochaber seat to the SNP’s Ian Blackford. ||||| Mhairi Black, of the Scottish National Party, has become the youngest MP elected in the UK for 350 years.
The 20-year-old now represents the constituency of Paisley and Renfrewshire South, outside Glasgow.
The law was changed in 2006, lowering the minimum age of parliamentary candidates from 21 to 18.
In 1667, 13-year-old Christopher Monck, 2nd Duke of Albemarle, took his seat in the House of Commons.
Newsbeat travelled to Mhairi's constituency office in Paisley to meet her just days before the election.
Follow @BBCNewsbeat on Twitter, BBCNewsbeat on Instagram, Radio1Newsbeat on YouTube and you can now follow BBC_Newsbeat on Snapchat ||||| Politics student rides SNP surge to defeat shadow foreign secretary Douglas Alexander to become youngest MP since 17th century. But first, she has to complete her dissertation
The odds were heavily stacked against the SNP’s Mhairi Black winning the Paisley and Renfrewshire South seat to become Westminster’s youngest MP for centuries.
SNP avalanche sweeps aside Douglas Alexander and Jim Murphy Read more
She was up against one of the best-known Labour MPs left in Scotland, Douglas Alexander, who was defending a majority of more than 16,000. He was not only shadow foreign secretary but had lots of election experience in abundance, enough to secure him the job of Labour’s UK campaign coordinator.
Some of her obstacles were self-inflicted, resurrected comments on social media – such as her expression of hatred for Celtic football club, normally the kiss of death for candidates in the west of Scotland, potentially alienating a large slice of the electorate from the outset.
None of it mattered. The 20-year-old University of Glasgow student won anyway, riding the SNP surge that has engulfed Scotland, comfortably overturning Alexander’s majority with more than 23,000 votes.
“The fact is that people have woken up to the fact that Westminster has not been serving them and the Labour party has not been serving them,” she said.
She gave a gracious victory speech, praising her predecessor warmly. “While I appreciate that this is a blow from Douglas Alexander, I truly hope he will remain to see his future in politics once he has recovered from this result,” she said.
Facebook Twitter Pinterest SNP candidate Mhairi Black, a third-year politics student at Glasgow University, beats Douglas Alexander in Paisley and Renfrewshire South on Friday
Her message to voters was inclusive: “Whether you voted for the SNP or not, and whatever your views are on Scotland’s future, I will seek to represent you and everyone in this constituency to the very best of my ability,” she said. “This election is about making the voice of this constituency and the whole of Scotland heard more effectively at Westminster than ever before.”
Black won cheers from supporters when she pledged the SNP would stop what she said would be the billions wasted on a renewal of Trident. She also promised to call for the powers that were promised to Scotland during the referendum campaigns, and said she would fight to put an end to austerity cuts that are hurting communities “both north and south of the border”.
Mhairi Black: the 20-year-old student poised to unseat Douglas Alexander Read more
What is she going to do now, reporters asked. “Sleep.” After that? “Breakfast.” And after that she will have to complete her dissertation, due by the end of the month in order to complete her politics degree. The dissertation should be relatively easy for her, steeped as she is in the SNP: how the SNP’s party structure has had to accommodate the influx of new members since the referendum, up from 20,000 to over 100,000.
Black is not so vain that she has been working out the consequences of her winning, such as studying who was the the last youngest MP in parliament. Liberal Democrat Charles Kennedy was elected at 23 but she only 20. When a reporter told her the last person younger than her was 1667 it came as news to her.
Black and her father, a long-term Labour supporter, became disillusioned with the party. She had been brought up in a socialist household, she said, well aware of the major figures from Labour’s past – from Keir Hardie to Dennis Skinner.
She attracted attention early in her campaign when footage of her speaking at a pro-independence rally in October last year showed her labelling some of those who rejected independence as gullible and selfish. When challenged, she insisted she had changed her attitude towards No voters.
She was also forced to discuss her history on Twitter – which she has been using since she was 14 – after writing in unfavourable terms about how she hated Celtic.
Brought up in Paisley, she is a Partick Thistle supporter and said her Twitter comments about Celtic should have been seen in context, in response to vandalism at the Thistle ground by Celtic fans. She did not in the end have to explain herself: the voters did not seem to care.
||||| Rising star Mhairi Black is on the verge of making political history in Paisley.
The fresh-faced 20-year-old SNP candidate has found herself at the epicentre of the hurricane which seems to have swept through Scotland since the independence referendum last September.
Opinion polls – and the bookies – suggest she is on course to take the seat of Labour big hitter Douglas Alexander in the battle for the Paisley and Renfrewshire South in Thursday’s General Election.
A victory would make her the youngest-ever MP to sit in the House of Commons ... and would also end 70 years of Labour representation in Paisley.
This time last year, few people would have predicted that the SNP could overturn Mr Alexander’s 16,000 majority – but a ‘political awakening’ is making that a real possibility.
Mhairi told the Paisley Daily Express: “People are engaged with politics again, they aren’t afraid to come up and ask the difficult questions.
“When we go out, we don’t even need to move – people are just coming up to us.
“They want a change and they see a vote the SNP as the only way to combat Westminster’s austerity agenda.”
Mhairi was only two when Mr Alexander and Labour swept into power under Tony Blair at 1997.
She grew up in a working class family in Paisley’s east end, immersed in politics, thanks to retired teacher dad Alan, 55, who has helped guide her campaign.
Her interest in helping others led her to the University of Glasgow, where she is about to complete a politics degree.
Inspired by the energy of last year’s referendum campaign, the football-mad Partick Thistle supporter decided to leave her job in Crookston’s Pizza Mario chip shop behind and dedicate her time to serving the community.
Despite having not yet reached her 21st birthday, Mhairi played a key role in the battle to dissolve the Union and says her young age isn’t a factor when she knocks on the doors of voters.
She explained: “They see I am passionate about what I’m talking about.
“It’s the ideas they are responding to and the fact they are being engaged with.
“Many of them have never spoken to any kind of candidate and the other parties had never tried to engage with me before I started this.
“In fact, I’ve seen more of Douglas Alexander in the last month than I did in the last 10 years.
“He’s only seemed to have discovered his passion when he could lose his seat.”
Fiery, young, and female, Mhairi doesn’t conform to the stuffy, middle-aged, grey-suited politician stereotype and is proving popular with women – a key demographic for all parties.
She has a reputation as a “firebrand” having campaigned strongly for independence, but she shrugs it off, while voters admire her conviction and say her outspokenness makes her more human.
Indeed, on the streets of Paisley, she is mobbed by people desperate to see change in the political landscape of Paisley, Scotland and the UK.
Opal Law, 33, of High Street, Paisley, was just one of the many well-wishers who queued up to shake her hand as she handed out leaflets near Gilmour Street station.
She said: “I think Mhairi is just great.
“She’s not afraid to speak in a working class accent, she’s enthusiastic, she’s very intelligent and she knows what she’s talking about.
“Mhairi knows what it’s like to not be paid the Living Wage, to struggle through university, not knowing if you’ll have enough money to make it to the end of the course.
“She’s not a robot, reciting statistics and sound-bites without any thought for what they mean to normal people.
“That’s the big difference between her and the career politicians, she speaks more to me than any other ever has.”
The contest between Mhairi and Douglas is one of this election’s biggest talking points.
The latest Lord Ashcroft Polls give her an 11-point lead in the race for Westminster.
Ever modest, Mhairi insists she is not the new poster girl for the SNP cause and insists it’s the policies that will decide the winner at the
ballot box.
She added: “This isn’t really about me, it’s about the message.
“We are promising an end to austerity and that is attractive to people from all sorts of backgrounds and walks of life.
“Voters can see there is no difference between Labour and the Tories.
“They’ve been told if they vote for me they’ll get the Conservatives, but people here voted Labour and got Thatcher.
“They see bankers and MPs on more money than they were before the economic crash and they are fed-up.
“People are tired of living on the edge, tired of being punished for the mistakes of bankers and politicians.”
● Mhairi is one of five candidates standing in the Paisley and Renfrewshire South constituency. The others are Douglas Alexander (Labour), Fraser Galloway (Conservative), Eileen McCartin (Liberal Democrats) and Sandra Webster (Scottish Socialist Party). | After yesterday's election, the UK now has a lawmaker too young to get into a bar in the US, let alone Congress. Mhairi Black, the Scottish National Party's candidate for a district near Glasgow, is 20 years old, and her victory makes her the youngest member of Parliament since the 13-year-old Duke of Albemarle in 1667, reports the BBC. The University of Glasgow politics student—whose dissertation is due at the end of this month—was elected as part of a huge SNP landslide in Scotland, the Guardian reports. She defeated Labour Party incumbent Douglas Alexander, the party's campaign chief, by a comfortable margin. Black, who had a part-time job in a pizza joint until a few months ago, says age was not an issue during her campaign in the Paisley and Renfrewshire South district. "They see I am passionate about what I'm talking about," she told the Daily Record before the election. "It's the ideas they are responding to and the fact they are being engaged with." Britain changed the law in 2006 to lower the minimum age for candidates from 21 to 18, the BBC notes. In the US, the age limit is 25 for members of the House and 30 for senators. Across Scotland, the SNP all but obliterated its rivals, taking 56 out of 59 seats, the Telegraph reports. |
The Department of Energy (DOE) is one of the most complex, multifaceted departments within the federal government. Established in 1977 in response to the global energy crisis that disrupted U.S. and world markets and economies, DOE is an amalgam of various federal agencies that had energy and science responsibilities. The roots of the Department came from the Atomic Energy Commission that was established in 1947 to assume the responsibilities of the Manhattan Engineer District, which had developed the first atomic bombs. The Commission was responsible for developing and producing nuclear weapons; operating nuclear reactors, uranium enrichment plants and plutonium production plants; performing research and development on both military and civilian uses of nuclear energy; and promoting and funding nuclear and other sciences. DOE assumed these as well as other responsibilities, including energy technology research, development, and demonstration; fostering energy conservation and efficiency; managing federal petroleum reserves; and, more recently, cleaning up environmental contamination resulting from its past operations. To carry out these responsibilities, DOE continues a highly decentralized structure that began under the Atomic Energy Commission. This structure relies heavily on private contractors, either corporations or universities, to manage most of its operations and activities. DOE owns the facilities needed to conduct the work, but the private contractors manage and operate the facilities. DOE’s work force is composed primarily of contractors. As of mid-1996, DOE had about 12,500 federal employees and about 120,000 contract workers located at its headquarters and field facilities throughout the country. To support these facilities and workers, DOE receives substantial funding, which ranged from $19.0 billion in 1986 to $23.7 billion in 1990. For fiscal year 1996, DOE was authorized to spend $19.7 billion. More than most federal agencies, DOE’s activities involve projects that are usually long term and high cost. In many cases, the projects are first-of-a-kind and thus involve substantial risk. These projects generally involve substantial funding for construction, are conducted to address a specific mission need, and are often separate line items in DOE’s budget. For example: DOE’s science programs in high-energy physics and nuclear physics require the construction of accelerators, which are large machines that propel atomic particles near the speed of light. The collisions of these particles are studied to explore the properties of matter. These accelerators can range in cost from several hundred million dollars to several billion dollars, or more. For example, the Continuous Electron Beam Accelerator Facility in Virginia (recently renamed the Thomas Jefferson National Accelerator Facility), shown in figure 1.1, cost over $500 million. DOE’s nuclear weapons programs required the construction of nuclear reactors to produce the materials needed for nuclear weapons. Additionally, other large and specialized facilities are needed to process the materials and manufacture, assemble, and test nuclear weapons components. Any of these facilities can easily cost over a billion dollars. For example, just the design work and close-out costs for a nuclear reactor to produce tritium, a key component of nuclear weapons, were more than $1.2 billion. DOE’s environmental management programs require facilities and technologies to process nuclear waste into forms suitable for longer-term or permanent disposal. These programs also need technologies and equipment to remove nuclear and hazardous material contamination from existing facilities and sites. Some facilities at major DOE field sites will cost many billions of dollars. For example, the Defense Waste Processing Facility in South Carolina (to process high-level radioactive waste into a stable form for long-term storage), and the support facilities to prepare the waste for processing, shown in figure 1.2, cost over $4 billion. These large-scale projects account for a significant portion of DOE’s budget. Funds for many of the projects are requested by DOE as specific construction line items, and funding for such projects is identified in congressional committee reports. However, from a total budget standpoint, considerably more operating funds than construction funds are provided for DOE projects, and the operating funds provided for some projects cannot be as easily determined, particularly for older projects. Funds needed for conceptual design, management, start up, and other nonconstruction activities—which can be as much as 40 percent of a project’s total cost—are included as part of DOE’s operating funds. Furthermore, some projects are funded entirely with operating funds. For example, over $1 billion of the operating funds appropriated annually for DOE’s environmental restoration activities are used for large-scale clean-up projects. Office of Management and Budget (OMB) Circular A-109, dated April 5, 1976, recognized that certain projects and/or activities are crucial to an agency accomplishing its missions. The circular defined projects that are critical to fulfilling an agency mission, entail the allocation of relatively large amounts of resources, and warrant special management attention as major system acquisitions (MSA). The circular (1) required early communication with the Congress that relates MSAs to agency mission needs and goals, (2) focuses top-level management attention on the determination of these mission needs and goals, and (3) requires an integrated approach to budgeting, contracting, and managing these projects. However, the specific criteria and dollar thresholds for determining which activities will be considered MSAs were left to the discretion of the individual agencies. In response to the OMB circular, DOE initially defined MSAs as systems or projects that had a total project cost in excess of $250 million and were specifically identified as mission critical. In 1990, DOE changed the cost threshold to $100 million. During the period 1980 through 1996, DOE conducted 80 different MSAs. These projects addressed many different program areas and activities, including the Superconducting Super Collider; nuclear reactors; uranium enrichment processes and facilities; fossil fuel demonstration plants; nuclear waste disposal facilities; and environmental cleanup efforts. According to current cost estimates, DOE has spent or plans to spend over $65 billion on these 80 MSAs. Successfully completing MSAs on time and within estimated dollar targets has proven difficult. Over the past few years, we have issued a number of reports that have discussed overall acquisition issues and problems in other federal agencies, as well as problems with individual projects. In a December 1992 report, we discussed problems with the Department of Defense’s major weapons acquisitions resulting in substantial cost overruns, delays in completing and fielding these acquisitions, and performance problems. Similarly, in an August 1996 report, we discussed the Federal Aviation Administration’s problems in acquiring new air traffic control system equipment within cost, schedule, and performance parameters. Both reports identified fundamental problems that inhibit the successful completion of these agencies’ major acquisitions. For example, we reported that Federal Aviation Administration officials acted in ways that did not reflect a strong commitment to the agency’s acquisition mission. They performed little or no mission needs analysis, set unrealistic cost and schedule estimates, and started production on the systems before having completed their development. Furthermore, in July 1995, we reported on governmentwide federal information technology acquisitions that cost more than anticipated, did not meet schedules, and did not meet mission needs. All of these acquisitions have suffered from a lack of advance planning and ineffective management oversight that has led to cost overruns and schedule slippages. Currently, 11 federal agencies have problems with information management or systems development that are serious enough that they have been listed by GAO, OMB, and/or the General Services Administration as high-risk programs. We have also discussed problems with specific DOE MSAs in many reports over the years. These reports address MSAs that range from the multibillion dollar Yucca Mountain Site Characterization Project in Nevada (a proposed repository for high-level radioactive waste), shown in figure 1.3, to the approximately $140 million Central Receiver Solar Thermal Power Plant in California, shown in figure 1.4. We have also reported on generic MSA management problems facing DOE, such as the agency’s frequent failure to ensure that critical management control documents for MSAs are prepared before projects are allowed to proceed beyond the conceptual design phase. The Chairman, Senate Committee on Governmental Affairs, asked us to review DOE’s acquisition management program and the past problems that have occurred. As agreed with the Chairman’s office, this report (1) assesses DOE’s performance in completing its MSAs, (2) identifies key factors that hinder the timely, cost-effective completion of the acquisitions; and (3) determines what DOE is doing to improve its performance. To respond to the Chairman’s request, we interviewed and obtained documents from DOE officials responsible for the Department’s overall MSA program and from DOE officials responsible for managing specific MSAs. We also obtained documents from officials of the National Academy of Sciences and the Defense Nuclear Facilities Board, which had experience reviewing DOE’s management of its MSAs. We also surveyed our managers who had prior experience in auditing specific DOE MSAs and reviewed the reports and other documents resulting from those audits. (See “Related GAO Products.”) We obtained listings identifying 80 MSAs conducted during the period 1980 through 1996 from DOE’s Office of Project and Fixed Asset Management under the Deputy Associate Secretary for Field Management. DOE has not retained a comprehensive cost and schedule history of its MSAs. As a result, the data used in this report had to be reconstructed from budget submissions, internal documents, and from officials of DOE’s Office of Project and Fixed Asset Management. We did not verify the data obtained from DOE. However, we did examine the reasonableness of these data based on information in prior GAO reports and audits. For this report, we used, wherever possible, the MSA’s “Total Project Cost,” which includes construction and operating funds. Where these costs were not available, we used the “Total Estimated Cost,” which includes construction costs. We have footnoted the latter. (See app. I, II, and III.) We provided a draft of this report to DOE for its review and comment. DOE’s comments and our response are included as appendix IV and are discussed in the chapters where appropriate. We conducted our work from August 1995 through October 1996. Our work was conducted in accordance with generally accepted government auditing standards. Since 1980, DOE has conducted 80 projects that it designated as MSAs. As of June 1996, 34 were ongoing. Our analysis of DOE’s success in completing its MSAs shows that during the period 1980 through 1996: DOE completed 15 of 80 MSAs, while more than twice as many projects (31) were terminated prior to completion. Cost overruns occurred on most completed projects and at least half of the ongoing projects, in some cases more than doubling the original estimates. Most of the completed projects were not finished on schedule, and many of the ongoing MSAs were behind schedule. Three of the completed projects either have not achieved their expected results or have not yet been used for their intended purposes. Since 1980, 31 MSAs were terminated prior to completion. These projects had incurred substantial expenditures when they were terminated, totaling more than $10 billion. These terminated projects include: The New Production Reactor program to produce tritium, a key ingredient in nuclear weapons, was canceled in 1992 after the expenditure of over $1.2 billion, primarily for design work and close-out costs. No final technology or site was selected. The Clinch River Breeder Reactor Project in Tennessee was intended to demonstrate a reactor that could create more fuel than it used. Authorized in 1970 at an estimated total cost of $700 million, the project was terminated in 1983 after an expenditure of about $1.6 billion. The Gas Centrifuge Enrichment Plant in Ohio, shown in figure 2.1, authorized in 1975 at an estimated total cost of $5.1 billion, was terminated in 1985 after an expenditure of $2.8 billion. The Superconducting Super Collider in Texas, shown in figure 2.2, was designed to conduct high-energy physics experiments. The collider would have required an oval tunnel 54 miles in circumference at an average depth of 150 feet below ground level. Originally funded as a construction project in fiscal year 1990 at an estimated total cost of $5.9 billion, the project was terminated in 1993 after an expenditure of over $2 billion. The Fuel Processing Restoration Project in Idaho (to increase naval nuclear propulsion fuel processing capacity) was begun in 1985. About $306 million had been spent for construction when the project was terminated in 1992. The Uranium Solidification Facility in South Carolina (to recycle enriched uranium and provide material for reactor fuel), begun in the late 1980s, had an original construction cost estimate of $85 million. When the project was terminated in 1994, about $116 million had been spent for construction. There are many reasons for these terminations, some of which were outside of DOE’s control. In some cases, changing circumstances and/or world events simply caught up with the projects, and they were no longer needed. In others, the necessary technologies to make the projects work could not be perfected in time. Some were canceled due to changes in administration policy. However, in other cases, as pointed out in DOE Inspector General and our reports, management problems and/or ineffective oversight by DOE led to enormous schedule slippages and cost overruns, and the Congress eventually cut off funding. Appendix I lists the terminated projects, their original cost estimates, and the amount spent on each prior to termination. Increases in projects’ costs beyond original cost estimates, or cost overruns, can result in program disruption and a lack of confidence in project management, and can divert funds needed by other programs. Cost overruns on DOE projects were common occurrences during the 1980 through 1996 period. Complete original cost estimates and final/current cost estimates were available for 35 of the 49 completed or ongoing projects. Of these 35 projects, 4 were completed and 4 were expected to be completed at or below their originally budgeted cost. The remaining 27 projects had or were projected to have cost overruns averaging over 70 percent. Table 2.1 provides examples of projects that were experiencing substantial cost overruns. A list of the original and final/current cost estimates for all completed and ongoing projects are contained in appendixes II and III, respectively. Cost overruns also occurred in terminated projects and, in some cases, were the contributing factor to their termination. For example, DOE’s estimate of the total cost to build the Superconducting Super Collider grew from $5.9 billion in 1990 to $8.25 billion in 1991. In May 1993, we reported that additional known costs showed that the project’s total costs would exceed $11 billion and could go higher. The project was terminated by the Congress in October 1993, because of concerns over the escalating costs and the federal budget deficit. Over the years, we and DOE’s Inspector General have reported that cost overruns on DOE’s MSAs have occurred for a number of reasons, including technical problems, some of which were beyond the agency’s control; poor initial cost estimates; and ineffective oversight of contractor operations. For example, in 1992, we reported that technical problems were important factors causing the cost of the Defense Waste Processing Facility to increase. This facility, at DOE’s Savannah River Plant in South Carolina, was designed to turn high-level radioactive waste into a glass-like form for long-term storage. The technical problems included the generation of benzene during the pretreatment process and the buildup of highly explosive gases during the vitrification process. In 1993, we reported that poor estimating of project costs contributed to cost overruns with DOE’s environmental projects. In 1995, the Inspector General reported on problems with the High Level Waste Evaporator at Savannah River. The evaporator is designed to evaporate water added to the high-level radioactive waste processing stream, thereby reducing the total volume of waste. The estimated cost of the project had more than doubled, and the estimated completion date had slipped by more than 4 years. The Inspector General found that many of the cost increases and schedule delays could have been avoided if DOE had adequately planned, contracted, funded, and maintained management continuity. A major factor was DOE’s failure to ensure that the contractor followed the project management guidance in DOE’s orders. Project cost overruns have occurred for other reasons. On some projects, according to DOE officials, changing legal and regulatory requirements have increased the scope of the projects resulting in higher costs than were originally estimated. For example, DOE officials point out that the number of sites to be cleaned up under DOE’s Formerly Utilized Site Remedial Action Program increased, due in part to legislation. Furthermore, DOE officials told us that some program offices were not consistently following guidance on which costs are to be included as part of Total Project Cost, and this resulted in understating those costs. Consequently, the Total Project Cost for some MSAs increased when these program offices began to adhere to the cost guidance. Schedule slippages can have serious implications for DOE projects. Slippages can adversely impact DOE’s ability to produce or maintain nuclear weapons components, achieve timely cleanup of contaminated sites, or be the first to make new scientific breakthroughs. Schedule slippages also generally equate to additional project costs. Many administrative or overhead costs—such as security, heat, water, etc.—will be incurred throughout the life of the project and increase as the length of the project increases. Contractors’ costs, which are passed on to DOE, will also rise as the schedule slips. Schedule delays and slippages were prevalent on DOE projects during the period 1980 through 1996. Most of the 15 completed MSAs did not meet their originally scheduled completion dates. Of the 34 ongoing projects, only a few originally scheduled for completion in this century are on time. Examples of projects that experienced some large schedule slippages are shown in table 2.2. The reasons for schedule slippage are similar to those for cost overruns, and they are very much intertwined. Any event that causes schedule slippage is likely to cause cost increases. For example, the schedule for the West Valley Demonstration Project in New York State (to solidify high-level radioactive waste for long-term storage), shown in figure 2.3, slipped by over 7 years and costs more than doubled. Once completed, an MSA must operate as intended in order to fulfill a program need. Of the 15 MSAs that DOE considered to be completed as of June 1996, 3 have not performed as expected or otherwise have not achieved their expected results. The Mirror Fusion Test Facility in California, shown in figure 2.4, was to perform experiments to provide an alternative approach for achieving fusion energy. The project is listed by DOE as being completed at a final cost of $364 million; however, the facility never became operational because programmatic funding was reduced by the Congress, and the remaining funds were used by DOE for higher priority projects. The facility has remained shut down since 1986. The Waste Isolation Pilot Plant in New Mexico, shown in figure 2.5, was to demonstrate the feasibility of underground storage of certain types of government-generated radioactive waste. DOE declared the plant operational in 1991. However, due to additional environmental, regulatory, and technical requirements that were imposed by legislation, the facility has not yet received the necessary certificates and permits to operate and has not yet received any radioactive waste. DOE currently expects this facility to begin operations in fiscal year 1998. To date, DOE has spent $710 million on this project. The Fuels and Materials Examination Facility at DOE’s Hanford Plant in Washington State, shown in figure 2.6, was to fabricate and examine a full range of breeder reactor fuels. This project, although listed by DOE as being completed, has never operated for its intended purpose because DOE’s breeder reactor program was terminated in the early 1980s when the Congress cut off funding. The facility is now being used for storage and office space. DOE spent $234 million on this project. Our work over the years and that of others, including DOE’s Inspector General, has identified a wide variety of specific problems leading to schedule slippages and cost overruns for MSAs. When looked at individually, there appears to be logical explanations of why specific MSAs experienced delays and cost increases. However, when looked at collectively over an extended time (e.g., 80 MSAs from 1980 through 1996), other more fundamental reasons or factors can be seen. We believe that there are four key factors underlying the increasing project costs, schedule slippages, and high number of terminations. The factors include constantly changing missions for DOE that often make it difficult to maintain departmental and congressional support for these long-term, high-cost projects; the funding of projects incrementally, from year to year rather than up front, which subjects those projects to potential delays or terminations in funding each year; a flawed system of incentives that does not always reward individuals and organizations for doing the right thing and has often rewarded contractors despite poor contract performance; and difficulty in hiring, training, and retaining enough people with the requisite skills to provide effective oversight and/or management of contractor operations. Since its creation, DOE’s missions have continued to change, and the DOE of today bears little resemblance to the agency created in 1977. The relative priority of DOE’s responsibilities has also changed greatly over the years. As a result, DOE no longer has major efforts underway or has substantially cut back its efforts to develop alternative sources of energy to help promote energy independence (a key activity in the late 1970s); further develop commercial nuclear power (a major DOE activity in the late 1970s); build new nuclear weapons (a major buildup in the 1980s); rebuild the nuclear weapons complex (a principal agency concern in the late 1980s); or provide commercial uranium enrichment services (which the Congress transferred out of DOE in 1993 to a government corporation, the U.S. Uranium Enrichment Corporation). At the same time, other missions have become a greater focus of the agency’s efforts. These include cleaning up years of contamination resulting from DOE’s nuclear and other activities, improving the nation’s scientific and industrial competitiveness, and providing stewardship for the nation’s nuclear weapons stockpile. Accordingly, many projects have been terminated, either by DOE or the Congress, because they were no longer considered critical or important to DOE’s mission. Examples include the following. The Clinch River Breeder Reactor project was begun in 1970 as a high-priority project to demonstrate a nuclear reactor that could “breed” or produce more fuel than it consumed. However, the fuel that it would produce is plutonium, a key material for nuclear weapons, and this raised concerns about the proliferation of nuclear weapons. Coupled with reduced expectations for the future use of nuclear energy, the development of a breeder reactor was no longer a priority. The project was terminated by the Congress in 1983 after the expenditure of about $1.6 billion. The Atomic Vapor Laser Isotope Separation Project in California, shown in figure 3.1, was begun in 1973 to develop a more efficient process to enrich uranium for use as fuel in commercial nuclear power plants. In the early 1990s, however, DOE’s mission of providing uranium enrichment services to public utilities and other non-DOE customers ended. Consequently, DOE terminated its efforts on this project in 1993 after a total expenditure of $1.3 billion. The Fuel Processing Restoration Project was begun in 1985 to build improved facilities to process naval nuclear propulsion fuels for reuse in DOE’s production reactors. With the end of the cold war, however, this mission changed and the production reactors closed, thereby negating the need for this project. The project was terminated by DOE in 1992 after a total expenditure of $306 million for construction. Projects have also been terminated when a change in administration policy occurred. In the early 1980s, DOE terminated five coal demonstration plants, on which it had spent $459 million. These projects were looking at more efficient and/or environmentally safe ways to burn coal. The projects were canceled because the new administration did not believe that funding demonstration projects was an appropriate mission for DOE. Other terminations resulted from changing world conditions. For example, after spending over $1.2 billion, DOE terminated plans to develop the New Production Reactor to produce tritium, a vital material for nuclear weapons. The project was terminated because of anticipated reductions in the nuclear weapons arsenal resulting from arms reduction agreements and the end of the Cold War. Also, because of reductions in nuclear weapons, DOE terminated upgrades on its existing production reactor at its Savannah River Plant after spending about $1.7 billion. Finally, DOE terminated the Uranium Solidification Facility when it was 90 percent complete, because the products from the facility—materials for nuclear fuel—were no longer needed with the shut down of the Savannah River reactors. Having funds available to keep a project on schedule is critical to achieving project objectives. DOE has historically received incremental funding for its projects. With incremental funding, the Congress provides funds for one fiscal year for a project based on the obligations estimated to be incurred within that fiscal year. Funds to continue the project must be requested from the Congress each year. DOE, in its annual budget submissions, develops and provides the Congress with a profile or schedule of the funding it will need each year to complete each project. However, when funds are provided incrementally, they often do not keep pace with the agency’s estimated needs. For many projects, particularly in their first years of development and construction, the funding received is considerably below the amount requested. This causes project schedules to slip and costs to rise. Contractors continue to charge, and certain administrative costs (e.g., heat, water, electricity, security, etc.) are incurred each month no matter what the progress. For example, the Continuous Electron Beam Accelerator Facility was designed to conduct nuclear physics experiments. The project’s funding request called for it to receive a total of $236 million for construction during fiscal years 1987 through 1991. However, in its first 3 years the project received only $94 million, or about 60 percent, of the $155 million scheduled. According to DOE officials, largely because of this funding delay, the project’s construction schedule was extended 3 years, and the construction costs increased by $77 million to $313 million. Similarly, the Fermilab Main Injector Project in Illinois (to construct a new particle accelerator for use in high-energy physics experiments) received only 40 percent of its first 3 years planned funding and the Security Enhancements at the Pantex Plant in Texas (where nuclear weapons components are assembled into final weapons), shown in figures 3.2 and 3.3, were funded at only 43 percent of the first 3 years schedule. According to DOE officials, both of these projects are now over cost and years behind schedule as a result of the reduced funding levels. On the other hand, DOE has had better results with projects when year-to-year funding was not a concern. In May 1994, we reported that under DOE’s clean coal technology program, the Congress appropriated $2.75 billion to fully fund the federal share of this joint federal/nonfederal program. Nonfederal contributions eventually reached more than $4.5 billion. According to DOE, this advance commitment of federal funds was an important reason for the industry’s significant response to the program, in terms of both the quantity and quality of the proposals received as well as the nonfederal cost-sharing achieved. Virtually all of the DOE officials, project sponsors, and other program participants we spoke with perceived the government’s advance financial commitment as a very big advantage for multiyear projects, because it indicated that the government would be involved in cost-sharing throughout the life of the projects. The industry participants told us that they would not want to commit significant funds in the early years of projects if they perceived that the government might stop sharing costs before the projects were completed. An additional problem with incremental funding is that it may allow some projects to be started that would not be funded if the Congress had to provide budget authority for their full estimated costs at the time the project was approved. (This concept of full funding is discussed in ch. 4.) In this regard, it is easier for DOE to start a project by requesting $100 million for 1 year, rather than to request the full cost of the project, which may be over a billion dollars. Most organizations have available to them incentives that can be used to affect the performance of their employees and contractors. These incentives normally consist of rewards for good performance and penalties for performance that does not meet agreed-to standards. To the extent that these incentives are properly applied, they can be effective in helping achieve agency goals. On the other hand, if not properly applied, incentives can impede successful completion of projects such as MSAs. DOE has incentives for its own employees and for its contractors. Incentives for DOE employees include salaries, promotions, and bonuses. Other incentives include job satisfaction, recognition for good work, working for a prestigious agency or organization within an agency, being part of a highly effective team, etc. To the extent that an organization uses these incentives to keep its employees focused on the organizations goals, it will more likely achieve those goals. However, goals can sometimes become unclear. Parochial interests can take over, and the real goal can become simply keeping the project going. Many DOE managers view themselves as advocates for their projects, which provides an incentive to not surface problems that could result in the project being terminated. For example: DOE and its contractors maintained efforts to build the $5.1 billion Gas Centrifuge Enrichment Plant for 3 years after it was pointed out that the demand for enrichment services was declining and that the costs of the plant would not be recovered. DOE eventually agreed that the project was no longer needed and terminated it after spending $2.8 billion. The delay in stopping this project occurred largely because of DOE’s desire to maintain its historical mission of being the major world supplier of enrichment services. Participants in DOE’s Superconducting Super Collider saw this project as allowing the United States to maintain preeminence in high-energy physics. Project managers originally expected that it would cost $5.9 billion and that large amounts of foreign contributions to the project would be forthcoming. However, the foreign contributions never reached expected levels, and project costs escalated greatly. Project participants and other supporters continued to try to keep the project going despite evidence that the total cost would exceed $11 billion. The Congress finally cut off funding for the project in 1993 after a total expenditure of over $2 billion. Upon taking office in 1989, the Secretary of Energy addressed this concern and called for a changed “culture” within the Department. The Secretary indicated that an atmosphere, or culture, had been created whereby the incentive for employees and contractors was to push ahead and complete whatever project they were working on—there was no incentive for anyone to question whether a project should be continued. DOE builds incentives into its contracts that can include bonuses for work that meets or exceeds expectations or penalties for poor performance. As we have previously reported, however, DOE contract managers seemed reluctant to use the penalties and sometimes used the financial rewards inappropriately. In some cases, DOE rewarded contractors with award fees, or bonuses, even though their performance was poor. In October 1989, we reported that during fiscal years 1986 through 1988, many safety and health deficiencies at DOE’s Rocky Flats Plant in Colorado had been repeatedly raised by DOE safety staff, including problems in the plant’s radiological protection program and a lack of commitment by plant management to improve overall safety and health conditions. Despite this poor performance, the contractor received over $26 million in bonuses during this period. In late 1989, the plant was shut down for, among other things, safety problems. About 2 years later, we reported that bonuses were again paid at Rocky Flats despite evidence of poor performance. These DOE practices run counter to those in private industry. A recent study of projects under DOE’s environmental management program pointed out that among the best industry practices for successful projects is to have incentives that reward participants based on their performance. The study pointed out that DOE lacked such incentives. DOE’s lack of adequate technical expertise to oversee the design, construction, and operation of these large, complex projects is a long-standing problem. A 1981 DOE internal task force and a 1987 report by the National Research Council noted DOE’s lack of technical capabilities and expertise. We have issued several reports that pointed out the difficulties that DOE had in addressing technical problems on DOE construction projects that led to large schedule slippages and cost overruns. The Defense Nuclear Facilities Safety Board, in its annual reports to the Congress, has repeatedly stated that the lack of appropriate technical expertise in DOE is a significant problem. Through a series of management reviews of DOE that we began in 1991, managers throughout DOE have told us that the lack of skilled staff in program, project, and contracting oversight positions is one of the most fundamental problems in the Department. In a June 1992 report, we pointed out that an internal DOE assessment of its Defense Waste Processing Facility in South Carolina faulted project managers for their lack of experience with large-scale, first-of-a-kind technology projects. DOE’s assessment also criticized the project’s management for not focusing sufficient attention on technical, institutional, or management issues. This project is for a large, first-of-a-kind plant using a process called vitrification to convert high-level radioactive waste into a glass-like form for permanent underground storage. The facility itself has experienced more than $900 million in cost increases, and the Total Project Cost—including other buildings and processes needed to prepare waste for vitrification—is over $4 billion. When it began operations in March 1996, the project was about 6 years behind schedule. Technical problems such as equipment failures, design deficiencies, poor component integration, and problems in obtaining permits were important causes of the cost increases and schedule slippage. There have also been dramatic cost increases in DOE’s overall environmental restoration program. A 1993 study of the causes of these cost increases found that the reasons included (1) inexperienced project teams unfamiliar with environmental regulations, such as permitting requirements; (2) design errors and resulting changes; (3) poor project definition, for example little knowledge of essential geotechnical information; (4) project team turnover; and (5) contracting issues. The need for reform of the federal acquisition process has led to several governmental actions. Legislative changes have been enacted to, among other things, streamline the acquisition process and open the system to more participation from the commercial market. Furthermore, OMB requires that agencies now request full funding for their acquisitions rather than the incremental annual funding previously requested. Also, DOE has begun new management initiatives to improve the way it does business. These actions could help DOE address some of the key factors leading to major cost overruns and schedule slippages for its MSAs. Over the past several years, there have been several changes to procurement law and regulations. In 1994, the Congress passed the Federal Acquisition Streamlining Act of 1994. The act contains more than 200 sections changing the laws that govern how federal agencies acquire almost $200 billion of goods and services annually. In 1996, the Congress passed the National Defense Authorization Act for Fiscal Year 1996.Division D of this act, referred to as the Federal Acquisition Reform Act of 1996, also contains provisions for improving federal acquisitions. Included in this major contracting reform legislation are provisions that could help DOE improve its management of its MSAs. Title V of the Federal Acquisition Streamlining Act of 1994 is designed to foster the development of (1) measurable cost, schedule, and performance goals, and (2) incentives for acquisition personnel to reach these goals. Subtitle B, which applies to civilian agencies, provides that agency heads are to establish cost, schedule, and performance goals for acquisition programs and annually report on the progress in meeting those goals. These goals are to include achieving, on average, 90 percent of the established cost and schedule goals without reducing the performance or capabilities of the items being acquired. Subtitle B also requires that agency heads are to manage employees in acquisition positions (including their education, training, and career development) by relating employees’ evaluations, pay, and promotions to their performance in helping achieve cost, schedule, and performance goals. The Federal Acquisition Reform Act of 1996 provides for the establishment of policies and procedures for the management, education, and training of the civilian acquisition work force. Career development of the work force is to include the identification of appropriate career paths, mandatory education and training in the critical duties and tasks of these career paths, and an enhanced system of performance incentives to encourage excellence in the acquisition work force. In addition, the act requires agencies to specify in their budget justification documents the funding levels requested for educating and training the acquisition work force and provides that funds appropriated for this purpose may not be used for any other purpose. We believe that these changes in procurement law could help the Department in recruiting additional contracting staff and in improving the technical capabilities of existing staff, and thus address a long-standing departmental problem. Recent OMB actions concerning federal agency acquisition of fixed assets could impact on how DOE manages its MSAs. Revisions to OMB guidancenow require that federal agencies (1) report by September 9, 1996, on the cost of full funding of fixed assets previously funded incrementally and (2) provide a fixed asset plan and justification for major system acquisitions. Full funding means that when an asset or any programmatically or economically separable segment of an asset is approved by the Congress, the requesting agency is given budget authority for the full estimated cost of that asset or segment. For example, if an agency was undertaking a project that required the construction of a building first, and then the subsequent installation of equipment to perform a task, the agency would request the full cost of constructing the building in one fiscal year. If approved, the agency would be given budget authority for the full amount and would not have to return to the Congress each year for additional budget authority for the building. The full-funding provision could have significant impact on DOE’s management of its MSAs. The agency and other stakeholders, such as the Congress, would need to reach a consensus on which of DOE’s MSAs are most mission-critical. Also, having full funding could help improve DOE’s management of its MSAs. By knowing that the funding would be available when needed, DOE and its contractors should be better able to stay within cost estimates and keep the projects on schedule. We believe that DOE’s difficulties in completing MSA projects, or of completing them on time and within original cost estimates, are a result of the key factors that we discuss in chapter 3—constantly changing missions, incremental funding of MSAs, lack of effective incentives, and shortages of employees with contracting and oversight skills. The problems resulting from these factors—cost overruns, schedule slippages, and project terminations—continue to exist despite many attempts at reform, and this underscores the difficulty facing DOE. As a practical matter, it is unlikely that schedule slippages and cost overruns can ever be completely eliminated given the inherent risk associated with many of DOE’s projects. However, the slippages and overruns can be reduced with continual effort. DOE currently has undertaken several initiatives to improve the management of its operations. Some of these initiatives can affect the agency’s management of its MSAs, and DOE can use them to begin addressing the key factors. Typically, most of DOE’s budget goes to contractors, including those who manage and operate its sites and facilities. For example, in fiscal year 1995, more than 91 percent of DOE’s obligations went to contractors. In recent years, both we and DOE’s Inspector General have reported on many problems with DOE’s contracting. These problems include poor administration of contracts, inadequate monitoring of contractor performance, and weak financial and accounting controls. In February 1994, DOE issued a report containing initiatives to reform its contracting practices. The report details plans to encourage competition wherever possible and develop specific contract performance measurements and incentives. The reform initiatives will require DOE to develop definitive work scopes and objective performance measurement criteria to replace the requirements now contained in most traditional cost-reimbursement contracts used by the Department. Once specific performance criteria are established, the contracts must provide incentives and/or disincentives to motivate the contractors to meet expectations. To accomplish this, DOE should have a central role in overseeing and evaluating contractor performance. The contract reform report recommended more than 40 specific actions that DOE began implementing in early 1994. We believe that the contract reform initiatives could improve many aspects of DOE’s contracting. More competition and better control over the contractors should lead to cost savings and quality improvements. These initiatives could also benefit DOE’s MSAs. Some of the key factors we previously identified, such as lack of effective incentives, could be addressed by contract reform, depending on how performance objectives are established. If these objectives focus on successful outcomes, cost control, and timeliness, they could improve the MSA process. Nevertheless, as we concluded in a 1989 report, contracting deficiencies generally resulted from people failing to carry out their responsibilities, rather than from a need for more rules and regulations. Realizing this, the full benefits of contract reform will require that DOE have enough properly trained staff to oversee the implementation of the reforms. Furthermore, recent DOE actions raise questions about the agency’s commitment to fully implementing the contract reforms. Two basic tenets of DOE’s philosophy of contract reform are that contracts will be competed except in unusual circumstances, and, if current contracts are to be extended, the terms of the extended contracts will be negotiated before DOE makes its decision to extend them. However, in May 1996, DOE extended the University of California’s three laboratory contracts (currently valued at about $3 billion) rather than compete them. These large contracts have been held by the university continuously for 50 years. DOE justified its decision on the basis of its long-term relationship with the university. This decision was made despite DOE’s Contract Reform Team’s conclusion that the agency’s contracting suffered from a lack of competition, which was caused, in part, by several long-term relationships with particular contractors. Our primary concern was that both the President and the Secretary of Energy publicly announced that the contracts would be extended before any negotiations had taken place on the terms of the contract extensions. In November 1994, DOE announced its intention to improve existing policies and procedures for MSAs. DOE decided to decentralize decision making and empower lower levels of management and integrate the decision process with the strategic and annual budget planning process. DOE also decided to designate selected MSAs as “Strategic Systems,” based on the criteria of national urgency, risk factors, international implications, estimated costs totaling over $400 million, or visibility. As of July 1996, 12 of the ongoing MSAs had been designated as Strategic Systems, and they will come under the oversight of the Secretary of Energy. The remaining MSAs will receive management oversight from cognizant DOE officers, such as the Assistant Secretary for Defense Programs, Assistant Secretary for Environmental Management, etc. To implement these changes, DOE issued a directive, “Life-Cycle Asset Management” (DOE Order 430.1, Aug. 4, 1995), which provides minimum performance requirements for building and managing its assets—including MSAs. Under the order, DOE headquarters’ oversight offices and program offices, along with DOE field offices, will develop specific objectives, criteria, and measures governing the conduct of operations at specific DOE sites. The field offices are to be assessed each year on the extent to which they meet their objectives. DOE’s Office of Project and Fixed Asset Management is responsible for developing objectives and criteria for life-cycle asset management implementation. One overall objective is to assist DOE project managers in completing more projects on schedule and within budget. More specific objectives can include how best industry practices are used, the quality of cost and schedule estimates, and the completion of safety and environmental documents. The performance objectives are to be adjusted annually. This initiative could improve performance by DOE’s field offices in managing MSAs or Strategic Systems. As pointed out in chapter 3, lack of effective incentives has been a problem associated with DOE’s performance in completing its MSAs. Setting specific objectives and criteria and holding managers accountable to those criteria will put DOE in a more business-like situation. DOE has only just begun a pilot of this initiative, and it is too early to gauge its effectiveness. DOE has implemented several other management improvement initiatives that may indirectly help it to better manage its MSAs. These initiatives include strategic planning, information resources management planning, and financial planning. As with the Strategic Systems Initiative, most of these initiatives are just being implemented, and it is too early to assess their impact. A strategic plan can be useful in setting forth an agency’s overall goals, strategies to meet those goals, and guidance for its employees as to what the agency’s priorities are. In April 1994, DOE issued its Strategic Plan that recognized the many changes taking place in the World, such as the end of the Cold War, and set forth a restructuring of DOE’s missions. The plan sets goals, strategies, and success indicators for each mission. The plan also recognizes the importance of meeting the needs of DOE’s numerous customers, from the taxpayer to the Congress, and recognizes many of their concerns. The specific details of how the agency will achieve its goals are not described in the plan but rather in the budget and operational plans of individual offices. DOE has revised its strategic plan to address four core missions: (1) protecting national security and reducing the nuclear danger; (2) weapons site cleanup and environmental management; (3) science and technology; and (4) enhancing energy security. The key to the successful implementation of DOE’s Strategic Plan, and also what the plan is now missing, is how a consensus will be reached to carry out these missions. Such a consensus should involve departmental leadership, the Congress, and other stakeholders and will be crucial in the successful completion of these long-term, high-cost MSAs. DOE is also revising its management information systems. Over the years, DOE has implemented numerous management information systems and has been criticized by us and others because (1) different contractors were allowed to operate different systems that were not compatible, (2) there was considerable overlap among the systems, and (3) many of the systems produced incorrect data. In July 1994, DOE issued an information management plan to support the objectives in its Strategic Plan. Lack of reliable information has been a long-standing problem with DOE’s MSAs. We recently found that DOE lacks comprehensive historical data on many of the MSAs. To the extent that DOE’s information management initiative can improve its ability to develop and deliver accurate management information, the initiative could also help improve the management of MSAs. DOE has also been criticized over the years for its inability to develop uniform, accurate, cost and budget data. In a May 1995 report, DOE’s Financial Information Team recommended a number of actions to address the agency’s financial and business information needs. For example, the report pointed out that DOE’s budget information came from a myriad of budget documents and in various formats. Because of this, the budget process did not provide the accurate and timely data managers needed. Among other things, the report recommended that DOE adopt a consistent budget format for the agency; adopt standard, electronically integrated budget software; and centralize budget preparation with the Chief Financial Officer. Better identification and reporting of cost data is a necessary step toward better DOE oversight and management of all of its activities, including MSAs. Having accurate and timely cost data is critical to management for early identification of problems and the prevention of cost overruns. There are no quick, easy solutions for DOE to keep its major system acquisitions on schedule and within budget. However, a number of recent federal and DOE initiatives could help. Recent changes to federal procurement laws could help contracting officers, including DOE’s, do their jobs better. In addition, the new requirement that all federal agencies request full funding for major projects could force DOE to reduce the number of MSAs it has ongoing and could improve project management by ensuring that project funds are available when needed. DOE’s management initiatives in the areas of contract reform, strategic systems and life-cycle asset management, strategic planning, information resources management planning, and financial planning could improve the management of its MSAs. To attain meaningful change through its initiatives, DOE will need to carry them through to completion. Another current issue that could impact DOE’s MSAs is the need, in our opinion and that of others, to reassess DOE’s missions. As we have pointed out in testimonies before the Congress, such reassessment would require the involvement of the Congress and would necessitate examining which MSAs really are key to the agency’s missions.Nevertheless, we believe that the management initiatives that DOE currently has under way offer an excellent opportunity for the agency to begin addressing some of the key factors affecting the management of its MSAs. | Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) ability to complete its major system acquisitions within originally estimated cost and time schedules, focusing on: (1) DOE's performance in completing its major system acquisitions; (2) key factors that hinder the timely, cost-effective completion of the acquisitions; and (3) DOE efforts to improve its performance. GAO found that: (1) from 1980 through 1996, DOE conducted 80 projects that it designated as major system acquisitions; (2) DOE has completed 15 of these projects, and most of them were finished behind schedule and with cost overruns; (3) 31 other projects were terminated prior to completion after expenditures of over $10 billion; (4) cost overruns and schedule slippages continue to occur on many of the ongoing projects; (5) the four key factors underlying the cost overruns, schedule slippages, and terminations include unclear or changing missions, incremental project funding, a flawed incentive system for DOE employees and contractors, and lack of sufficient DOE personnel with the appropriate skills to effectively oversee contractor operations; and (6) DOE has implemented several initiatives that are helping to improve its overall management, but all of these initiatives may not improve DOE's management of its major system acquisitions. |
President Donald Trump personally dictated the first statement his son gave in response to a report from The New York Times earlier this month about a June 2016 meeting at Trump Tower between Donald Trump Jr., Jared Kushner and Paul Manafort with a Russian lawyer with the promise of damaging information about Hillary Clinton, two senior level sources told ABC News.
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The Washington Post first reported on Monday night the news that the president dictated the messaging.
The decision was initially made that Donald Trump Jr. would release a truthful statement that "couldn't be repudiated" before the release of the Times story, according to the Post. But that decision was reversed as the president flew back from the G-20 summit in Germany on July 8.
The president personally dictated the statement that his son and Russian lawyer Natalia Veselnitskaya "primarily discussed a program about the adoption of Russian children" at the 2016 meeting during the presidential campaign, the Post reports. The statement emphasized that the subject of the meeting was "not a campaign issue at the time," the Post reports.
Trump Jr. later acknowledged that he took the meeting after being told that he would receive damaging information about Clinton at the meeting.
Alan Futerfas, Donald Trump Jr.'s attorney, had no comment when reached Monday night by ABC News.
A spokesperson for Donald Trump Sr. also declined to comment when reached by ABC News, as did a representative for his son-in-law and adviser Kushner.
The president's legal team said the report in inaccurate.
"Apart from being of no consequence, the characterizations are misinformed, inaccurate and not pertinent," Jay Sekulow, a member of the Trump legal team, told ABC News.
The New York Times reported that the president signed off on the initial statement from his son. Sekulow denied that in an interview with ABC News on July 12.
"The president didn't sign off on anything," Sekulow said. "He was coming back from the G-20. The statement that was released on Saturday was released by Donald Trump Jr. and, I'm sure, in consultation with his lawyers. The president wasn't involved in that." ||||| On the sidelines of the Group of 20 summit in Germany last month, President Trump’s advisers discussed how to respond to a new revelation that Trump’s oldest son had met with a Russian lawyer during the 2016 campaign — a disclosure the advisers knew carried political and potentially legal peril.
The strategy, the advisers agreed, should be for Donald Trump Jr. to release a statement to get ahead of the story. They wanted to be truthful, so their account couldn’t be repudiated later if the full details emerged.
But within hours, at the president’s direction, the plan changed.
Flying home from Germany on July 8 aboard Air Force One, Trump personally dictated a statement in which Trump Jr. said that he and the Russian lawyer had “primarily discussed a program about the adoption of Russian children” when they met in June 2016, according to multiple people with knowledge of the deliberations. The statement, issued to the New York Times as it prepared an article, emphasized that the subject of the meeting was “not a campaign issue at the time.”
The claims were later shown to be misleading.
President-elect Donald Trump and his son Donald Trump Jr. at a news conference at Trump Tower in New York on Jan. 11. (Jabin Botsford/The Washington Post)
Over the next three days, multiple accounts of the meeting were provided to the news media as public pressure mounted, with Trump Jr. ultimately acknowledging that he had accepted the meeting after receiving an email promising damaging information about Hillary Clinton as part of a Russian government effort to help his father’s campaign.
The extent of the president’s personal intervention in his son’s response, the details of which have not previously been reported, adds to a series of actions that Trump has taken that some advisers fear could place him and some members of his inner circle in legal jeopardy.
As special counsel Robert S. Mueller III looks into potential obstruction of justice as part of his broader investigation of Russian interference in the 2016 election, these advisers worry that the president’s direct involvement leaves him needlessly vulnerable to allegations of a coverup.
“This was . . . unnecessary,” said one of the president’s advisers, who like most other people interviewed for this article spoke on the condition of anonymity to discuss sensitive internal deliberations. “Now someone can claim he’s the one who attempted to mislead. Somebody can argue the president is saying he doesn’t want you to say the whole truth.”
Trump has already come under criticism for steps he has taken to challenge and undercut the Russia investigation.
He fired FBI Director James B. Comey on May 9 after a private meeting in which Comey said the president asked him if he could end the investigation of ousted national security adviser Michael Flynn.
Director of National Intelligence Daniel Coats told associates that Trump asked him in March if he could intervene with Comey to get the bureau to back off its focus on Flynn. In addition, Trump has repeatedly criticized Attorney General Jeff Sessions for recusing himself from overseeing the FBI’s Russian investigation — a decision that was one factor leading to the appointment of Mueller. And he has privately discussed his power to issue pardons, including for himself, and explored potential avenues for undercutting Mueller’s work.
President Trump and first lady Melania Trump board Air Force One in Hamburg after the Group of 20 summit on July 8. (Carlos Barria/Reuters)
[Top intelligence official told associates Trump asked him if he could intervene with Comey on FBI Russia probe]
Although misleading the public or the news media is not a crime, advisers to Trump and his family told The Washington Post that they fear any indication that Trump was seeking to hide information about contacts between his campaign and Russians almost inevitably would draw additional scrutiny from Mueller.
Trump, they say, is increasingly acting as his own lawyer, strategist and publicist, often disregarding the recommendations of the professionals he has hired.
“He refuses to sit still,” the presidential adviser said. “He doesn’t think he’s in any legal jeopardy, so he really views this as a political problem he is going to solve by himself.”
Trump has said that the Russia investigation is “the greatest witch hunt in political history,” calling it an elaborate hoax created by Democrats to explain why Clinton lost an election she should have won.
Because Trump believes he is innocent, some advisers explained, he therefore does not think he is at any legal risk for a coverup. In his mind, they said, there is nothing to conceal.
[Trump’s legal team faces tensions — and a client who often takes his own counsel]
The White House directed all questions for this article to the president’s legal team.
One of Trump’s attorneys, Jay Sekulow, declined to discuss the specifics of the president’s actions and his role in crafting his son’s statement about the Russian contact. Sekulow issued a one-sentence statement in response to a list of detailed questions from The Post.
“Apart from being of no consequence, the characterizations are misinformed, inaccurate, and not pertinent,” Sekulow’s statement read.
Trump Jr. did not respond to requests for comment. His attorney, Alan Futerfas, told The Post that he and his client “were fully prepared and absolutely prepared to make a fulsome statement” about the meeting, what led up to it and what was discussed.
Asked about Trump intervening, Futerfas said, “I have no evidence to support that theory.” He described the process of drafting a statement as “a communal situation that involved communications people and various lawyers.”
Peter Zeidenberg, the deputy special prosecutor who investigated the George W. Bush administration’s leak of CIA operative Valerie Plame’s identity, said Mueller will have to dig into the crafting of Trump Jr.’s statement aboard Air Force One.
Prosecutors typically assume that any misleading statement is an effort to throw investigators off the track, Zeidenberg said.
“The thing that really strikes me about this is the stupidity of involving the president,” Zeidenberg said. “They are still treating this like a family-run business and they have a PR problem. . . . What they don’t seem to understand is this is a criminal investigation involving all of them.”
Advocating for transparency
The debate about how to deal with the June 2016 Trump Tower meeting began weeks before any news organizations began to ask questions about it.
Kushner’s legal team first learned about the meeting when doing research to respond to congressional requests for information. Congressional investigators wanted to know about any contacts the president’s son-in-law and senior adviser had with Russian officials or business people.
Kushner’s lawyers came across what they immediately recognized would eventually become a problematic story. A string of emails showed Kushner attended a meeting with a Russian lawyer at Trump Tower in the midst of the campaign — one he had failed to disclose. Trump Jr. had arranged it, and then-campaign chairman Paul Manafort had also attended.
To compound what was, at best, a public relations fiasco, the emails, which had not yet surfaced publicly, showed Trump Jr. responding to the prospect of negative information on Clinton from Russia: “I love it.”
Lawyers and advisers for Trump, his son and son-in-law gamed out strategies for disclosing the information to try to minimize the fallout of these new links between the Trump family and Russia, according to people familiar with the deliberations.
[Trump Jr.’s Russia meeting: What we know and when we learned it]
Hope Hicks, the White House director of strategic communications and one of the president’s most trusted and loyal aides, and Josh Raffel, a White House spokesman who works closely with Kushner and his wife, Ivanka Trump, huddled with Kushner’s lawyers, and they advocated for a more transparent approach, according to people with knowledge of the conversations.
In one scenario, these people said, Kushner’s team talked about sharing everything, including the contents of the emails, with a mainstream news organization.
Hicks and Raffel declined to comment. Kushner attorney Abbe Lowell also declined to comment.
The president’s outside legal team, led by Marc Kasowitz, had suggested that the details be given to Circa, an online news organization that the Kasowitz team thought would be friendly to Trump. Circa had inquired in previous days about the meeting, according to people familiar with the discussions.
The president’s legal team planned to cast the June 2016 meeting as a potential setup by Democratic operatives hoping to entrap Trump Jr. and, by extension, the presumptive Republican nominee, according to people familiar with discussions.
Kasowitz declined to comment for this article, as did a Circa spokesman.
Consensus overruled
Circumstances changed when the New York Times began asking about the Trump Tower meeting, though advisers believed that the newspaper knew few of the details. While the president, Kushner and Ivanka Trump were attending the G-20 summit in Germany, the Times asked for White House comment on the impetus and reason for the meeting.
During breaks away from the summit, Kushner and Ivanka Trump gathered with Hicks and Raffel to discuss Kushner’s response to the inquiry, according to people with knowledge of the discussions. Kushner’s legal team joined at times by phone.
Hicks also spoke by phone with Trump Jr. Again, say people familiar with the conversations, Kushner’s team concluded that the best strategy would be to err on the side of transparency, because they believed the complete story would eventually emerge.
The discussions among the president’s advisers consumed much of the day, and they continued as they prepared to board Air Force One that evening for the flight home.
But before everyone boarded the plane, Trump had overruled the consensus, according to people with knowledge of the events.
It remains unclear exactly how much the president knew at the time of the flight about Trump Jr.’s meeting.
The president directed that Trump Jr.’s statement to the Times describe the meeting as unimportant. He wanted the statement to say that the meeting had been initiated by the Russian lawyer and primarily was about her pet issue — the adoption of Russian children.
Air Force One took off from Germany shortly after 6 p.m. — about noon in Washington. In a forward cabin, Trump was busy working on his son’s statement, according to people with knowledge of events. The president dictated the statement to Hicks, who served as a go-between with Trump Jr., who was not on the plane, sharing edits between the two men, according to people with knowledge of the discussions.
In the early afternoon, Eastern time, Trump Jr.’s team put out the statement to the Times. It was four sentences long, describing the encounter as a “short, introductory meeting.”
“We primarily discussed a program about the adoption of Russian children that was active and popular with American families years ago and was since ended by the Russian government, but it was not a campaign issue at the time and there was no follow up,” the statement read.
Trump Jr. went on to say: “I was asked to attend the meeting by an acquaintance, but was not told the name of the person I would be meeting with beforehand.”
Over the next hour, word spread through emails and calls to other Trump family advisers and lawyers about the statement that Trump Jr. had sent to the Times.
Some lawyers for the president and for Kushner were surprised and frustrated, advisers later learned. According to people briefed on the dispute, some lawyers tried to reach Futerfas and their clients and began asking why the president had been involved.
Also on the flight, Kushner worked with his team — including one of his lawyers, who called in to the plane.
His lawyers have said that Kushner’s initial omission of the meeting was an error, but that in an effort to be fully transparent, he had updated his government filing to include “this meeting with a Russian person, which he briefly attended at the request of his brother-in-law Donald Trump Jr.” Kushner’s legal team referred all questions about the meeting itself to Trump Jr.
The Times’ story revealing the existence of the June 2016 meeting was posted online about 4 p.m. Eastern time. Roughly four hours later, Air Force One touched down at Joint Base Andrews. Trump’s family members and advisers departed the plane, and they knew the problem they had once hoped to contain would soon grow bigger.
Alice Crites contributed to this report. | Father knows best? President Trump rejected the advice of aides and personally dictated a statement for Donald Trump Jr. when news of the younger Trump's meeting with a Russian lawyer during the 2016 campaign first surfaced, sources say. According to the Washington Post's sources, advisers with Trump at the G20 summit told him the best strategy would be for Trump Jr. to try to defuse the situation by quickly issuing a truthful statement about the meeting with Natalia Veselnitskaya. But Trump decided on a different approach while taking Air Force One home, the sources say, and came up with what turned out to be a misleading statement claiming that the June 2016 meeting had been about adoption. The statement Trump Jr. provided to the press July 8 failed to mention what dominated coverage of the meeting in the days afterward: the fact that Trump Jr. believed that the meeting had been set up for the Russian to share damaging information on Hillary Clinton. Trump lawyer Jay Sekulow says the Post's version of events is inaccurate. "Apart from being of no consequence, the characterizations are misinformed, inaccurate, and not pertinent," he said in a statement to ABC News. In an earlier interview, Sekulow denied that Trump had approved the initial statement from Trump Jr., saying "the president didn't sign off on anything." (Jared Kushner says the meeting was so pointless that he engineered a way to get himself out of there after 10 minutes.) |
CMS, within the Department of Health and Human Services (HHS), provides operational direction and policy guidance for the nationwide administration of the Medicare program. It contracts with private organizations—called carriers and fiscal intermediaries—to process and pay claims from Medicare providers and perform related administrative functions. Twenty-three carriers nationwide make claims payments for physician services, which are covered under part B of Medicare. In addition, carriers are responsible for implementing controls to safeguard program dollars and providing information services to beneficiaries and providers. To ensure appropriate payment, they conduct claims reviews that determine, for example, whether the services physicians have claimed are covered by Medicare, are reasonable and necessary, and have been billed with the proper codes. Carriers employ a variety of review mechanisms. Automated checks, applied to all claims, are designed to detect missing information, services that do not correspond to a beneficiary’s diagnosis, or other obvious errors. They may also be used to determine if a claim meets other specific requirements, including national or local coverage policies (such as allowing only one office visit for an eye examination per beneficiary per year unless medical necessity is documented). Manual reviews by carrier staff are used when the review of a claim cannot be automated to determine if sufficient information has been included to support the claim. In the most thorough type of manual claims review, a carrier’s clinically trained personnel perform a medical review, which involves an examination of the claim along with the patient’s medical record, submitted by the physician, to determine compliance with all billing requirements. Typically, carriers conduct medical reviews on claims before they are paid, by suspending payment pending further examination of the claim. Prepayment medical reviews help to ensure that a carrier is making appropriate payment decisions while the claims are processed, rather than later trying to collect payments made in error. To target such reviews, carriers develop “edits”—specific criteria used to identify services that the carrier determines to have a high probability of being billed in error. Carriers develop these edits based on data analyses that include comparisons of local and national billing patterns to identify services billed locally at substantially higher rates than the national norm. Carriers may also develop edits for prepayment medical review based on other factors, such as CMS directives or individual physicians or group practices the carrier has flagged for review based on their billing histories. Before putting edits into effect, CMS expects the carriers to conduct targeted medical reviews on a small sample of claims in order to validate that the billing problem identified by the carrier’s data analysis or other sources does actually exist. In addition to prepayment medical reviews, carriers conduct some medical reviews after claims are paid. Postpayment reviews determine if claims were paid in error and the amounts that may need to be returned to the Medicare program. They focus on the claims of individual physicians or group practices that have atypical billing patterns as determined by data analysis. Such analyses may include comparisons of paid claims for particular services to identify physicians who routinely billed at rates higher than their peers. Carriers may also select claims for postpayment review based on other factors, such as information derived from prepayment reviews, referrals from other carrier units, and complaints from beneficiaries. In rare cases, postpayment reviews may result in referrals to carrier fraud units. Each year, as part of their budget negotiations with CMS, carriers develop medical review strategies that include workload goals for conducting medical reviews. CMS provides each carrier with an overall budget for claims review. The carriers then submit for CMS approval their workload goals for specific activities, such as the number of prepayment and postpayment medical reviews they plan to conduct, along with proposed budgets and staff allocations across these activities. In addition, the carriers submit budget proposals for provider education and training related to issues identified in medical review. CMS requires the carriers to reassess the allocation of these resources among review and educational activities during the course of the year and, with CMS approval, to shift resources as appropriate to deal with changing circumstances. In estimating the prevalence of medical reviews, data from the three carriers in our study show that more than 90 percent of physician practices—including individual physicians, groups, and clinics—did not have any of their claims selected for medical review in fiscal year 2001, and for those that did, relatively few claims were subject to review. A small proportion of physician practices served by the three carriers had any claims medically reviewed during fiscal year 2001. Table 1 shows that about 10 percent of the solo and group practices that filed claims with WPS had any prepayment medical reviews. This proportion was even lower at HealthNow NY and NHIC California, with rates of about 4 and 7 percent, respectively. The share of physician practices with postpayment reviews by any of these carriers was much smaller; approximately one tenth of 1 percent of practices had claims selected for medical review after payment had been made. Further, for most of the physician practices having any claims subject to medical review in fiscal year 2001, the carriers examined relatively few claims. As shown in table 2, over 80 percent of the practices at each carrier whose claims received a prepayment review had 10 or fewer claims examined and about half had only 1 or 2 claims reviewed. For the small number of physician practices whose claims were subject to postpayment review in fiscal year 2001, the three carriers typically examined more claims per practice. At NHIC California, the median physician practice had 33 claims reviewed postpayment; at WPS, 49; and at HealthNow NY, 31. With the issuance of the PCA initiative, CMS modified the approach that carriers use to select physicians’ claims for medical review, determine repayments due, and prevent future billing errors. PCA directs carriers to (1) use their analyses of physician billing patterns to better focus their medical review efforts towards claims with the greatest risk of inappropriate payments, and (2) provide targeted education regarding how to correct billing errors. Information from our three carriers indicates that, as a result of PCA, they virtually eliminated in fiscal year 2001 their use of extrapolation, a corrective action that involves projecting a potential overpayment from a statistical sample. A recent CMS survey also showed reduced use of extrapolation by other carriers. After PCA was implemented, the highest repayment amounts each of our three carriers assessed physicians were substantially lower than in the previous year. The carriers have also developed medical review strategies that include increased education for individual physicians in an effort to change billing behavior and, thus, prevent incorrect payments. PCA seeks to more effectively select physician claims for medical review. The initiative aims to further the agency’s program integrity goals of making sure that claims are paid correctly and billing errors are reduced while carriers maintain a level of medical review consistent with their workload agreements with CMS. In targeting physician claims, PCA requires that carriers subject physicians only to the amount of medical review necessary to address the level and type of billing error identified. If claims data analysis shows a potential billing problem for a particular service, carriers must first conduct a “probe review”—requesting and examining medical records from a physician for a limited sample of claims—to validate suspicions of improper billing or payment. For example, a carrier may initiate a postpayment probe review after discovering that a physician billed, per patient, substantially more services than his or her peers. If the carrier determines that the documentation in the medical records does not support the type or level of services that was billed, the carrier calculates an error rate—the dollar amounts paid in error relative to the dollar amount of services reviewed. The error rate, the dollar value of the errors, and the physician’s past billing history are among the factors the carrier may consider in assessing the level of the billing errors and determining the appropriate response. Under PCA, CMS instructs carriers to categorize the severity of billing errors found in probe samples into three levels of concern—minor, moderate, or major. Minor concerns may include cases with a low error rate, small amounts improperly paid, and no physician history of billing problems. Moderate concerns include cases that have a low error rate but substantial amounts improperly paid. Major concerns are cases with a very high error rate, or even a moderate error rate if the carrier had previously provided education to the physician concerning the same type of billing errors. Although no numerical thresholds were established in the instructions to carriers, CMS provided vignettes illustrating the various levels of concern. In an example of a major concern, 50 percent of the claims in a probe sample were denied, representing 50 percent of the dollar amount of the claims reviewed. PCA allows carriers flexibility in determining the most appropriate corrective action corresponding to the level of concern identified. At a minimum, the carrier will communicate directly with the provider to correct improper billing practices. For probe reviews that are conducted postpayment—the stage at which probe reviews are most commonly done at the three carriers we visited—they must also take steps to recover payment on claims identified as having errors. Further options for corrective action include: for minor concerns, conducting further claims analysis at a later date to ensure the problem was corrected; for moderate concerns, initiating prepayment medical review for a percentage of the physician’s claims until the physician demonstrates compliance with billing procedures; and for major concerns, initiating prepayment medical review for a large share of claims or further postpayment review to estimate and recover potential overpayments by projecting an error rate for the universe of comparable claims—a method of estimation called “extrapolation.” Under PCA, because the corrective action is scaled to the level of errors identified, the potential financial impact of medical review on some physicians has decreased. Although our three carriers did not frequently use extrapolation in 2000, before PCA, a physician could experience a postpayment medical review that involved extrapolation regardless of the level of errors detected. As shown in table 3, after PCA’s implementation, the highest amount any physician practice was required to repay substantially declined at the three carriers. The largest overpayment assessed across the carriers ranged from about $6,000 to $79,000 in fiscal year 2001, compared with about $95,000 to $372,000 in the previous year. At the same time, changes in the median overpayment amounts varied across our three carriers, with a dramatic decline at NHIC California. (Recovery of overpayments from physicians is discussed in app. II.) Several factors may account for the lower overpayment amounts assessed physician practices in fiscal year 2001. Under PCA, probe samples are designed to include a small number of claims per physician, so any overpayments discovered through the probe review process will likely be limited. Whereas the typical postpayment medical review conducted before PCA might involve several hundred claims, a probe review generally samples 20 to 40 claims selected from an individual physician for the time period and the type of service in question. If the carrier classifies the physician’s billing problem as a minor or moderate level of concern, the physician is responsible for returning only the amount paid in error found in the probe sample. In these cases, there would not be an extrapolation as may have occurred in the past. The circumstances in which carriers determine an overpayment by extrapolating from a statistical sample have narrowed. Before PCA was implemented, carriers were encouraged to extrapolate an overpayment amount whenever a postpayment sample of claims was drawn. However, even then, our three carriers used extrapolation in only 38 instances in fiscal year 2000. Now CMS has directed carriers to reserve the use of extrapolation for those cases where a major level of concern has been identified. In addition, before it can proceed with an extrapolation, the carrier has to draw a new, statistically valid random sample from which to project the assessed overpayment. Furthermore, the amount to be recovered based on an extrapolation is smaller than it typically would have been in years past because instead of using the average overpayment found in the sample, the average is reduced because statistical estimates do not have 100 percent accuracy. In the event that extrapolation is used, the requirement to start with probe samples may also reduce the physician’s financial risk. Because a probe sample is fairly small, carrier officials stated that they may only examine one or two types of services, compared to four to six types of services reviewed previously. This means that if the probe review results lead to an extrapolation based on a larger statistically valid random sample, only claims for the small number of service types will be included in that sample and the results will be projected to a smaller universe of claims. Consequently, the total amount assessed would tend to be smaller than previously extrapolated amounts. In the first year of PCA implementation, our three carriers virtually eliminated their use of extrapolation to determine overpayments. For example, NHIC California officials stated that before PCA it was not uncommon to use extrapolation in determining overpayments based on samples involving a relatively large number of claims. But now, such extrapolation is to be used infrequently. If a physician failed to correct inappropriate billing practices following a probe sample and targeted education, the carrier would probably subject some or all of the physician’s subsequent Medicare billing for prepayment review before it would consider selecting a larger postpayment sample suitable for extrapolation. As shown in table 4, in fiscal year 2000, NHIC California conducted 31 postpayment reviews that involved extrapolation, with a median overpayment assessment of about $32,000, but had no cases involving extrapolation in fiscal year 2001. Similarly, HealthNow NY had none in fiscal year 2001 and WPS reported no cases of extrapolation other than a small number of consent settlement cases. A recent CMS survey indicates that most carriers limit their use of extrapolation. In October 2001, CMS surveyed carriers to determine, in part, the number of cases that involved extrapolation during the last 3 fiscal years. Of the 18 carriers that responded to the survey, only 3—serving Ohio, West Virginia, Massachusetts, and Florida—had more than 9 cases involving extrapolation in fiscal year 2001. A key focus of PCA is its emphasis on carrier feedback to physicians in the medical review process. Educating physicians and their staffs about billing rules is intended to increase correct billing, which reduces both inaccurate payments and the number of questionable claims for which physicians may be required to forward copies of patient medical records. When a carrier identifies a physician’s billing problem, PCA requires the carrier to provide data to the physician about how his or her billing pattern varies from other physicians in the same specialty or locality. For issues that affect a large number of providers, CMS recommends that carriers work with specialty and state medical societies to provide education and training on proper billing procedures. In response to PCA, two of the three carriers planned substantial increases in their spending for education and feedback to physicians on medical review issues as part of their overall medical review strategies for fiscal year 2002. As shown in table 5, the three carriers had budget increases of various sizes for provider education and training related to medical review. As part of their strategies to increase physician education, the three carriers reported that they were making greater use of phone calls and individualized letters to physicians’ offices to notify them about billing errors. Carriers record their contacts using physician tracking systems to check on the education that has been provided to the physician, which can include letters, materials, phone calls, or face-to-face visits. Whereas in the past it was common for carriers to simply point physicians toward the applicable Medicare rules, under PCA they have assisted physicians in interpreting the rules and applying them to specific billing situations. The carrier’s medical review staff has addressed problems of questionable billing patterns by contacting physicians by phone to provide specific information pertaining to billing rules. For physicians whose claims are undergoing postpayment review, the carrier sends a letter at the completion of the medical review that provides a description of the billing problems found, including, as needed, information on the relevant national and local medical policies. The letter also identifies a contact person at the carrier, should the physician want additional information about billing or documentation issues. For example, WPS officials acknowledged that they previously had little or no follow-up with physician practices whose claims were denied or reduced after medical review to make sure they understood how to bill correctly. In fiscal year 2001, WPS began providing additional education— some efforts addressing all Medicare physicians and some targeted to providers in specific specialties or service locations. To identify the groups that would most benefit from targeted education, the carrier developed benchmark data on billing errors using aggregate claims data on utilization, denial rates, and other billing patterns. For example, the carrier developed education campaigns targeted to mental health practitioners, such as psychologists, clinical social workers, and psychiatrists. In fiscal year 2001, WPS also began to conduct on-site education and group meetings and contact specialty associations to disseminate further information. In addition to concerns about having their claims selected for medical review, some physicians have expressed dissatisfaction with the accuracy of the carrier medical review decisions concerning the medical necessity, coding, and documentation of physician services billed to Medicare. To assess the appropriateness of clinical judgments made by carriers’ medical review staff, we sponsored an independent evaluation by the private firm that monitors claims payment error rates as a Medicare program safeguard contractor. The firm found that our three carriers made highly accurate medical review decisions. In addition, the level of accuracy was highly consistent across the three carriers. Slight variation in the degree of accuracy was evident when the claims reviewed were classified by the type of payment decision: to pay the claim in full, to pay a reduced amount, or to fully deny payment. The independent review was conducted on samples of 100 physician claims from each carrier selected randomly from all claims undergoing either prepayment or postpayment medical review in March 2001. Nurse reviewers examined the carrier’s initial review decision to see if it was supported by the available medical record documentation and carrier policies in effect when the carrier made its payment decision. These reviewers then discussed with the carrier’s staff each claim where they had come to a different conclusion, and in all but one instance, the carrier and contractor achieved a consensus as to whether the original carrier decision was in error. The acting deputy director of CMS’s Program Integrity Group, a physician, decided the accuracy of the one case that remained in dispute. For the vast majority of claims, the independent reviews validated the carriers’ decisions. As shown in table 6, the independent reviewers agreed with carriers’ original assessments in 280 of the 293 cases examined, or about 96 percent of the time. The small share of inaccurate decisions made by the carrier resulted in both overpayments and underpayments to physicians. There was slight variation in the accuracy of carrier medical review decisions for different types of payment determinations that resulted from the carriers’ initial review. The independent reviewer found that carrier decisions to completely deny payment were the most accurate. In our sample, only 1 of the 64 carrier decisions (1.6 percent) to fully deny a claim was determined to be a medical review error. Carrier decisions to reduce payment amounts were slightly less accurate. The independent reviewers (with subsequent concurrence by the carriers) found errors in 5 of 59 claims (8.5 percent) that the carriers had initially decided to pay at a reduced amount. In one instance, the independent reviewer determined that the carrier should have denied the claim altogether; for the other 4 claims, it judged that the carrier should have made a smaller reduction or paid the claim in full. Three of the five instances in which the independent reviewer questioned the carrier’s decision to reduce the amount paid involved claims for physicians’ evaluation and management (E&M) services—commonly known as physician visits or consultations. The coding system used for billing much of physician care has five separate levels of evaluation and management service intensity, each linked to a distinct payment amount. In order to assess the appropriateness of a claim’s billing level, reviewers have to find specific information in the submitted clinical documentation on, among other factors, the breadth of the medical history taken, the scope of the physical examination conducted, and the complexity of the decisions made by the physician. According to CMS officials, one reason medical review decisions for these claims are likely to raise questions is that the different levels along these key dimensions are not clearly defined, such as distinguishing between “straightforward” and “low” complexity in medical decision making. Such reviews are also complicated by CMS’s instruction to the carriers that they may use either the guidelines for billing evaluation and management services issued in 1995 or the ones issued in 1997, depending on which set is most advantageous to the physician. Another factor contributing to the difficulty in medically reviewing E&M claims is the broad variability in style and content found in the medical records. Carrier officials noted that some physicians meticulously document exactly what they have observed and done while others tend to be less complete and careful. Reviewers are likely to vary in what they infer from the less complete records, which, in turn, can lead to different conclusions as to whether a case is of low, medium, or high complexity. Although the carriers in our study were highly accurate in making payment determinations, they can improve their process for selecting claims for medical review that are most likely to contain billing errors. Our data show that, in fiscal year 2001, there was variation in the performance of edits—criteria used to target specific services for review—that our three carriers employed to identify medically unnecessary, or incorrectly coded, physician services. Carriers have difficulty establishing edits that routinely select claims with the greatest probability of errors because they have to rely, to some degree, on incomplete data. Also, CMS’s oversight of the carriers does not include incentives to develop and use more refined edits. CMS has limited its involvement in this area to collecting data from the carriers on the results of reviews selected by the edits and setting general expectations for the carriers to assess the effectiveness of the edits that they use. Carriers receive no feedback on the edit effectiveness data that they have reported to the agency and little guidance as to how they could maximize the effectiveness of their procedures to select physician claims for medical review. To help reduce local billing problems, carriers usually decide on their own which claims to select for medical review. They generally develop edits by (1) analyzing claims data to identify services or providers where local billing rates are substantially higher than national averages, and (2) selecting a small probe sample of such claims for medical review to substantiate the existence of a billing problem. Other edits are designed to ensure that physicians adhere to local medical review policies—rules that describe when and under what circumstances certain services may be covered. Claims identified by the edits are suspended, that is, temporarily held back from final processing, and the physicians involved are contacted to request the relevant medical records. Once those records arrive, claims examiners determine whether the claim should be paid in full, reduced, or denied. Of the total number of prepayment edits related to physician services used at each carrier (36 edits at WPS in each of its two largest states; 18 at NHIC’s Northern California office, and 7 at HealthNow NY), 27 identified the large majority of claims undergoing medical review in fiscal year 2001. Specifically, 10 or fewer edits at each of the carriers suspended more than three-fourths of the claims medically reviewed prior to payment. In order to assess the relative effectiveness of those edits, we drew on data that the carriers recorded on the results of reviews initiated by each edit in effect during that period. These data included information on the proportion of suspended claims that were reduced or denied as a consequence of medical review, and the average dollar reduction for those claims that were not paid in full. Edits would be considered better targeted if they have (1) a higher rate of claims denied or reduced, or (2) a larger average amount of dollars withheld from payment for an inappropriately billed service. The strongest case could be made for edits that did well on both dimensions, and the weakest case would apply for those edits that ranked low on both denial rate and average amount withheld. Figure 1 shows the results of this analysis for the 27 prepayment edits that accounted for the largest number of claims suspended by each of our three carriers. The four bars indicate the number of edits achieving different levels of denial (or reduction) rates. The grouping with the largest number of edits, 11, represents the lowest level of effective targeting, between 5 and 19 percent. Two thirds of the edits, 18, have denial rates under 40 percent. By contrast, 6 edits have denial rates of between 60 and 82 percent. The segments within the bars indicate the average dollar amount reduced or denied when either occurs. Only 3 of the 11 major edits in the lowest denial rate group generated relatively large program savings—an average of $200 or more—for those claims that were reduced or denied. An equal number, and larger proportion, of edits in the highest denial rate group also produced savings exceeding $200 per claim. The wide variation among these 27 major edits across both the dimensions of denial rate and average dollar amount denied or reduced suggests that there is room for improvement. CMS requires the carriers to periodically evaluate the effectiveness of the edits they use to ensure that each has a reasonable denial rate and dollar return. However, CMS has not provided guidelines to the carriers as to how such evaluation should be conducted, or what minimum level of performance they should strive for with respect to denial rates, average dollar reductions, or other measures of efficiency. Moreover, officials at the three carriers indicated that they did not receive feedback from CMS regarding the performance of their edits, even though the carriers submit quarterly reports to the agency on the performance of their most active edits. CMS’s involvement in this area was generally limited to ensuring that carriers had their own process in place for evaluating prepayment edits. The three carriers tend to consider similar variables in evaluating edit effectiveness, but vary quite a bit in the procedures that they follow to make that assessment. In general, all three carriers consider factors such as the number of claims suspended, the denial rate, dollar savings, and the overall magnitude of the potential billing problem. With respect to process, HealthNow NY did not have any explicit procedure to evaluate edits until the end of fiscal year 2001. At that point it adopted a detailed scoring system with numeric thresholds that determine when to discontinue using a edit. The other carriers continue to rely less on quantitative measures and more on the professional judgment of medical review staff in evaluating prepayment edits. Several factors contribute to the continued use of poorly targeted edits. Some of the carriers contend that their data on the relative effectiveness of their edits are incomplete and therefore unreliable. For example, NHIC California officials noted that they often lack good information on the ultimate outcome of reviews, taking account of reversals that occur when initial carrier decisions are appealed. Not only does the appeal process take a long time, if followed to its full extent, it can also be difficult to determine why certain claim denials were overturned. Another reason why carriers maintain low-performing prepayment edits is that there are few incentives—and some disincentives—for them to change. In particular, carriers have agreed with CMS to conduct a certain number of reviews that are evenly distributed throughout the course of the year. Before a carrier discontinues use of an edit, it must have another one in place that will garner at least as many claims for medical review to meet workload targets, or else negotiate a change in its medical review strategy with CMS officials to reallocate those review resources to other activities. Putting new edits in place often requires carriers to adjust the selection criteria over time in order to obtain the manageable number of claims selected for review. Carrier officials also noted that there is no systematic dissemination of carriers’ best practices—those worthy of consideration by all carriers— regarding the success of individual edits or methods to evaluate edit efficiency. An official at HealthNow NY told us that they informally share information about their experiences with particular prepayment edits with other carriers operating in the same region. Carrier officials reported that this is not common practice at WPS or NHIC California. In a 1996 report on selected prepayment edits, we recommended that HCFA, now CMS, disseminate information to carriers on highly productive edits. However, the agency currently does not identify and publicize in any systematic manner those edits that generate high denial rates or the selection criteria used to develop them. Since 1996, the overall level of payment errors for the Medicare program has been tracked nationwide in annual audit reports issued by the HHS Office of Inspector General (OIG). In the most recent audit, covering fiscal year 2001, the OIG found that $12.1 billion, or about 6.3 percent of the $191.8 billion in processed fee-for-service payments, was improperly paid to Medicare providers. These OIG reports of aggregate Medicare payment errors have spurred CMS to improve its efforts to safeguard Medicare payments by assessing not only an error rate nationwide but also for the individual carriers. In February 2000, HCFA announced the development of a new tool to assess individual carrier performance called the Comprehensive Error Rate Testing (CERT) Program. CERT is designed to measure, for all claims, the accuracy of payment decisions made by each carrier. The CERT benchmark will allow CMS to hold the carriers accountable for the accuracy of payment decisions for all claims processed, not just those selected for review. Thus, the results will reflect not only the carrier’s performance, but also the billing practices of the providers in their region. According to CMS officials, CERT information on all the carriers processing physician claims is expected to become available in November 2002. At that point, both CMS and the carriers can begin to use that information for program oversight and management, and will then see if the expectations for CERT are met in practice. Under the CERT program, CMS will use an independent contractor to select a random sample of approximately 200 claims for each carrier from among all those submitted each month for processing. For this sample, the carrier will provide the CERT contractor with information on the payment decisions made and all applicable medical documentation used in any medical reviews of the sample claims. The CERT contractor will request comparable documentation from physicians whose claims in the sample were not medically reviewed by the carrier. The CERT teams of clinician reviewers will examine the documentation and apply the applicable national and local medical policies to arrive at their own payment decisions for all of the sampled claims. With the development of carrier-level error rates, CMS expects to monitor payment accuracy trends for the individual carriers and focus its oversight on those carriers with relatively high, or worsening, rates of error. Moreover, on a national basis, CERT will calculate error rates for different provider types. For example, it will indicate how often physicians bill incorrectly and receive either too much or too little payment compared to such nonphysician providers as ambulance companies and clinical labs. The structure of subgroup analyses designed to help carriers better target their medical reviews remains open to discussion among CMS officials. CERT will complement but not replace CMS tracking systems designed to monitor carrier performance using data periodically reported to CMS by the carriers concerning medical review costs, the reduction in provider payments resulting from medical reviews, and workload. CMS has relied on these data to ensure that carriers sustain the level of effort specified in agreements with CMS—particularly the number of medical reviews conducted. CMS is currently working to consolidate and streamline these various reports into a Program Integrity Management Reporting (PIMR) system. CMS’s intention is for PIMR to collect, from each carrier, data such as the number of claims medically reviewed, the number denied, the number of denials reversed on appeal, and the associated dollar amounts saved or recouped. Currently, this information is not maintained in a common format and is difficult to compile. The first management reports based on PIMR are expected by the end of fiscal year 2002. In addition to CERT and the carrier-reported data, CMS oversight of physician medical review will continue to rely on contractor performance evaluations (CPEs)—assessments based on site visits conducted by a small team of CMS regional and headquarters staff. For carrier medical review activities, these CMS evaluations occur at irregular intervals, depending on the carrier’s volume of claims and the level of risk of finding substantial problems at the carrier. CMS’s evaluation emphasizes an assessment of the carrier’s compliance with Medicare rules and procedures in areas related to medical review—such as data analysis to support the selection of edits, the development of local coverage rules, and tracking contacts with physicians. The evaluation also involves examining a small number of claims to determine the accuracy of the carrier’s review decisions. Critics have previously alleged that CPE assessments lacked consistency and objectivity. In response, CMS has attempted to ensure greater uniformity across carriers in the way these evaluations are conducted by recruiting CPE team members from the agency as a whole, not the local regional office, and by using nationally based CPE protocols. While CMS has modified its medical review procedures, it is too soon to determine whether the PCA approach will enhance the agency’s efforts to perform its program integrity responsibilities. Carrier staff conduct medical reviews to maintain program surveillance and make physicians aware of any billing practices that are not in keeping with payment rules. In this regard, CMS’s PCA policy emphasizes feedback and educational contacts with individual physicians. Evaluating the efficacy of this policy will require a systematic examination of carriers’ performance data. When CERT data become available, CMS may be in a better position to assess PCA’s impact on reducing billing errors and preventing inappropriate payments. CMS officials reviewed a draft of this report and generally agreed with its findings. In particular, the agency noted that our discussion of the effectiveness of carrier edits confirmed the need for CMS to “become more active in assisting contractors in this area.” The agency also provided a number of technical corrections and clarifications that we incorporated into the text as appropriate. These comments are reprinted in Appendix III. We are sending copies of this report to the Administrator of CMS and we will make copies available to others upon request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. If you or your staffs have questions about this report, please contact me at (312) 220-7600 or Rosamond Katz at (202) 512-7148. Other contributors to this report were Hannah Fein, Jenny Grover, Joel Hamilton, and Eric Peterson. We assessed the claims review accuracy of the three carriers in our study—National Heritage Insurance Company in California, Wisconsin Physicians Service Insurance Corp, and HealthNow NY—by validating initial medical review decisions involving physician claims. We contracted with DynCorp—the Medicare contractor already selected by CMS to administer its Comprehensive Error Rate Testing (CERT) program—to use the same review procedures developed for CERT in assessing a sample of medical review decisions made by the three carriers. We requested that each carrier identify the universe of physician claims subjected to prepayment and postpayment review during March 2001, limiting the universe to those claims submitted by M.D.s and D.O.s. From that universe, Dyncorp randomly selected 100 claims for review. Then, DynCorp obtained the medical record information for those claims from the carrier, and reviewed each payment decision for accuracy. The number of carrier decisions examined by DynCorp staff exceeded the number of claims because, in several instances, carriers had reviewed multiple lines on a claim. The results of this assessment of carrier medical review decisions can only be generalized to the universe of claims from which the samples were drawn: claims from M.D.s or D.O.s that underwent medical review in March 2001 by one of our three carriers. In reviewing payment accuracy, DynCorp staff was tasked with determining if the carrier’s initial review decision was supported by the medical record and carrier policies in place at the time the payment decision was made. Specifically, DynCorp assessed whether documentation in the medical records supported the procedure codes and level of service that was billed. Where their determination differed from that of the carrier, DynCorp staff discussed those claims with the carrier’s medical review staff. In all but one case, the parties came to agreement on whether payment decisions were accurate. In the one case where agreement could not be reached, the acting deputy director of CMS’s Program Integrity Group—a physician—provided a second opinion that confirmed the carrier’s decision. The results obtained from DynCorp’s review of physician claims undergoing medical review were consistent across the three carriers. The accuracy of decisions across all the sampled medical reviews for each carrier exceeded 94 percent. (See table 7.) In those cases where medical review errors were identified, NHIC California and WPS decisions resulted in a mix of underpayments and overpayments. However, HealthNow NY’s review errors were concentrated in decisions to pay claims in full that should have been denied or reduced. Because a relatively small proportion of medical reviews are conducted after claims payment, our samples from the three carriers included just 19 claims where a postpayment review was performed. The accuracy of carrier determinations for both prepayment and postpayment medical reviews was consistent, at about 95 percent. (See table 8.) Carriers attempt to collect any overpayments due the Medicare program as soon as possible after the completion of postpayment reviews. The carrier notifies physician practices that they have three options for returning an overpayment: (1) pay the entire overpayment amount within 30 days, (2) apply for an extended repayment plan, or (3) allow the carrier to offset the overpayment amount against future claims. Initially, the carrier sends a letter informing the physician practice of the medical review results and the specific dollar amount that the practice must return to Medicare. The letter provides an explanation of the procedures for repaying an overpayment, which includes a statement of Medicare’s right to recover overpayments and charge interest on debts not repaid within 30 days, as well as the practice’s right to request an extended repayment plan if the overpayment cannot be paid in that time. The letter also advises the physician practice of the right to submit a rebuttal statement prior to any recoupment by the carrier and to appeal the review decision to, in the first instance, the carrier’s separate appeals unit. In addition, the letter notifies the practice of any additional reviews that the carrier has planned. Regardless of whether the physician practice appeals the review decision, repayment is due within 30 days of the date of the letter, unless an extension is approved. Carriers will consider extended repayment plans for those physician practices that cannot make a lump sum payment by the due date. To qualify for an extension, the overpayment amount must be $1,000 or more and a practice must prove that returning an overpayment within the required time period would cause a financial hardship. Accordingly, a physician practice must offer specific documentation to support the request, including a financial statement with information on monthly income and expenses, investments, property owned, loans payable, and other assets and liabilities. In addition, if the requested repayment extension is for 12 months or longer, the physician practice must submit at least two letters from separate institutions indicating that they denied a loan request for the amount of the repayment. Requests for payment extensions that exceed 12 months must be referred to CMS regional staff for approval. If a physician practice does not return payment within 30 days or establish a repayment extension plan, the carrier must offset the amount owed against pending or future claims. The carrier has some discretion as to the exact date that offsetting begins, taking into consideration any statements or evidence from the physician practice as to the reasons why offsetting should not occur. In fiscal year 2001, HealthNow NY offset amounts owed by 72 of 95 physician practices that did not pay their overpayment amounts within 30 days. Most of the practices that did not have amounts offset returned their overpayments within 40 days. Any offset payments are applied against the accrued interest first, and then the principal. As shown in table 9, the three carriers in our study reported that most physician practices assessed an overpayment in fiscal year 2000 or 2001 repaid Medicare within 6 months of the carrier’s notice. The three carriers also reported few requests from physician practices for extended repayment plans. As shown in table 10, none of the carriers had more than four requests during fiscal year 2001, and no extension exceeded 1 year. Medicare: Communications With Physicians Can Be Improved (GAO-02-249, February 27, 2002). Medicare Management: CMS Faces Challenges to Sustain Progress and Address Weaknesses (GAO-01-817, July 31, 2001). Medicare Management: CMS Faces Challenges in Safeguarding Payments While Addressing Provider Needs (GAO-01-1014T, July 26, 2001). Regulatory Issues for Medicare Providers (GAO-01-802R, June 11, 2001). | In 1990, GAO designated the Medicare program to be at high-risk for waste, fraud, and abuse. More than a decade later, Medicare remains on GAO's high-risk list. This report examines Medicare's claims review process, which is designed to detect improper billing or payments. GAO found that most physicians who bill Medicare are largely unaffected by carriers' medical reviews, with 90 percent of physician claims going unreviewed in fiscal year 2001. At the three carriers GAO studied, implementation of the progressive corrective action initiative has reduced medical reviews of claims and has increased carrier education to individual physicians. The carriers in the study generally made appropriate payment determinations in examining physician claims selected for a medical review. By targeting claims that are more likely to have errors, carriers could improve the efficiency of their own operations and reduce administrative demands on the small proportion of physician practices with claims selected for review. The Centers for Medicare and Medicaid Services (CMS) is refocusing its oversight of carrier performance in processing and reviewing claims. The agency intends to hold carriers accountable for the overall level of payment errors in all the claims they process, not just the ones they review. Consistent with this approach, CMS is developing a program in which an independent contractor determines the accuracy of claims processed and paid by each carrier using quantitative performance measures. |
To encourage defense contractor consolidations, DOD announced in July 1993 that it would pay for restructuring costs on transferred flexibly priced contracts, provided that (1) the restructuring costs were allowable under the Federal Acquisition Regulation and (2) a DOD contracting officer determined that the business combination was expected to result in overall reduced costs to DOD or preserve a critical defense capability. Concerns over the payment of restructuring costs led Congress in 1994 to pass Public Law 103-337, which required a senior DOD official to certify that projections of restructuring savings were based on audited cost data and that the projected savings should result in overall reduced costs to DOD. In 1996, Congress passed Public Law 104-208, which stipulated that for business combinations occurring after September 30, 1996, projected savings had to (1) be at least twice the amount of costs allowed or (2) exceed the costs allowed, provided the Secretary of Defense determined that the combination would result in the preservation of a critical capability. Public Law 105-85 made these requirements permanent. None of the combinations discussed in this report were subject to the two-to-one ratio requirement because they occurred before this requirement was established. The Secretary of Defense is required to report to Congress annually through 2002 on DOD’s experience with defense contractor business combinations occurring on or after August 15, 1994. In April 1998, we reported that, for the seven business combinations, DOD expects to save a net of almost $3.3 billion between 1993 and 2000 from restructuring activities, such as laying off workers, closing facilities, and relocating employees and equipment. Table 1 shows DOD’s projection of its share of restructuring savings and costs for these business combinations. We reported in September 1998 that our work had shown that selected restructuring activities at 10 contractor business segments had enabled the contractors to reduce their projected operating costs by hundreds of millions of dollars. These reductions benefited DOD because defense contracts’ costs were lower than they would have been if the restructuring activities had not occurred. However, not all of the restructuring savings shown in table 1 may be directly attributable to restructuring. We noted in our April 1998 report that Lockheed Martin had projected about $489 million of restructuring savings from increased operational efficiencies at its Missiles & Space segment by adopting improved business practices. Contractor officials acknowledged that some of the improvements and associated savings could have been implemented without restructuring because various efforts were already underway or planned to improve the segment’s operational efficiency prior to restructuring. However, these officials believed that the business combination provided the means to overcome organizational and cultural barriers that might otherwise have hindered these efforts. Subsequently, we reported in September 1998 that Lockheed Martin did not fully consider the impact of normal downsizing activities when estimating restructuring savings. For example, Lockheed Martin attributed 1,153 support personnel reductions at its Missiles & Space segment in 1995 to restructuring activities. However, before its merger with Martin Marietta, Lockheed had forecasted that its total personnel level at this segment would decrease by 849 in 1995. Because Lockheed Martin did not consider reductions that were already planned, the amount of savings that was directly attributed to restructuring for 1995 may be overstated by $170 million. While our work raised questions as to whether all of the projected savings are directly related to restructuring, these two overstatements would not have affected DOD’s decision to pay restructuring costs because of the large amount of projected savings from the Lockheed - Martin Marietta business combination. We reported in April 1998 that DOD estimated it had realized a net savings of about $1.9 billion from the seven business combinations. Now, DOD estimates it has realized a net savings of about $2.1 billion (see table 2). The estimated savings realized represent about 64 percent of the restructuring savings expected at the time of certification. We commented in the April 1998 report that caution should be exercised when interpreting DOD’s reported restructuring savings. We noted that the savings DOD reported were generally not developed from a detailed analysis of the effect of restructuring on individual contract prices but rather were estimated using the same or similar methodologies employed to estimate savings during the certification process. DOD has consistently stated that it is inherently difficult to precisely identify the amount of actual savings realized from restructuring activities. It is not feasible to develop and apply a standard methodology that can be used to separate the precise impact of restructuring from the impact that other factors have on contract prices. Determining the precise impact that restructuring activities have on a contract price requires isolating the effect of restructuring from nonrestructuring-related factors. In its annual reports to Congress, DOD has stated that factors such as inflation, business fluctuations, accounting system changes, quantities purchased, and subsequent reorganizations, affect a contractor’s overall cost of operations. DOD noted that it is not feasible to precisely isolate the impact of restructuring from the impact of these other factors. As previously reported, our work substantiates DOD’s position. During our work for the September 1998 report, the contractors we visited provided several examples that they believed demonstrated how specific contract prices were affected by restructuring. For example, Martin Marietta provided information showing that the Navy purchased 25 test equipment items at a unit price of $1,270,524 before its acquisition of the General Electric business segments and 25 of the same test equipment items at a unit price of $1,246,230 after the acquisition and subsequent restructuring. Even though the unit price was $24,294 lower after restructuring, neither we nor contractor officials could isolate the impact of restructuring from the influence of other factors, such as learning curve improvement and business base changes. Contractor officials believe the unit price reduction was attributable, in part, to restructuring activities but acknowledged that the other factors also affected the unit price. A similar problem existed with the other examples provided by the contractors. Neither we nor the contractors could separate the effect of restructuring from the influence of other factors that also affected the contract prices. Speaking on behalf of business combinations included in our September 1998 report, the Aerospace Industries Association noted that it was not practical to determine the impact of restructuring on contract prices because so many variables affect prices. While it is not feasible to develop a methodology to precisely determine the impact of restructuring on contract prices, our work has shown that there are other ways to ensure that DOD receives benefits from restructuring activities. In particular, prompt adjustments of forward pricing rates and the use of reopener clauses would enable DOD to share in the benefits of restructuring in an equitable and timely manner. Before DOD can benefit from restructuring activities, restructuring savings must be incorporated into a contractor’s forward pricing rates used to price defense contracts. DOD’s acquisition regulations stipulate that its contracting officers should adjust a contractor’s forward pricing rates as soon as practical upon receipt of a restructuring proposal. In commenting on our April 1998 report, DOD highlighted this requirement by stating that, in reviewing contractor restructuring proposals associated with business combinations, one of its major concerns is that restructuring costs and savings are factored into forward pricing rates as soon as possible so that the net savings are priced into new contracts. We strongly agree with DOD’s position. It is imperative that contracting officers adjust the forward pricing rates as soon as possible after a contractor quantifies its estimated restructuring savings so that the lower rates can be used to price contracts. Before forward pricing rates are adjusted and used to price contracts, contracting officers should incorporate reopener clauses in noncompetitive fixed-price contracts to enable DOD to recoup its equitable share of savings under these contracts. We reported in July 1998 that it took an average of about 21 months from the announcement of a business combination to the time that contractors reflected restructuring savings in forward pricing rates. During that time, DOD awarded over 600 fixed-price contracts or contract modifications worth about $3.9 billion to these contractors. Despite repeated recommendations from the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Command (DCMC), contracting officers rarely included reopener clauses for savings in fixed-price contracts awarded during this period. The use of reopener clauses has resulted in recouping restructuring savings. In our September 1998 report, for example, we discussed a case where the contracting officer had included a reopener clause in a fixed-price foreign military sales contract for self-propelled howitzers awarded to UDLP, which required UDLP to reduce the contract price after restructuring its operations. Using a proposal developed by UDLP showing the impact of restructuring on the contract, the contracting officer negotiated a $1.8-million reduction to the contract’s $48.5-million price. The $1.8 million could not have been recovered from this fixed-price contract had the reopener clause not been included in the contract at the time it was awarded. We reported in July 1998 that DOD contracting officers and contractors were reluctant to use reopener clauses. We, therefore, recommended that the Secretary of Defense revise DOD’s regulations to require that contracting officers include the clauses in noncompetitive fixed-price contracts negotiated before the benefits of restructuring savings were reflected in forward pricing rates. We also recommended that, if the clauses were not included, contracting officers provide a written justification in the negotiation records as to why they were not needed. In responding to our recommendations, DOD agreed to add a new provision to its regulations requiring contracting officers to consider using a reopener clause. DOD did not believe, however, that the use of reopener clauses should be mandatory. DOD stated that contracting officers must be permitted to exercise professional judgment to decide when the clause is appropriate. DOD further stated that documenting the reason for not using a reopener clause would result in an unnecessary administrative burden and was contrary to the principles of acquisition reform. DOD’s action to add a new provision to its regulations requiring contracting officers to consider using reopener clauses is a step in the right direction. However, we continue to believe that contracting officers should be required to document in the negotiation records the reason they did not include a reopener clause in noncompetitive fixed-price contracts. While our work has shown that DOD is benefiting from defense contractor restructuring activities, it is not feasible to develop a standard methodology for precisely determining the impact of these benefits on specific contract prices. However, DOD could ensure that it receives its equitable share of restructuring savings in a timely manner by having its contracting officers (1) adjust forward pricing rates as soon as possible to reflect restructuring savings and (2) include reopener clauses in noncompetitive fixed-price contracts awarded before the forward pricing rates are adjusted. DOD has agreed to revise its regulations to require contracting officers to consider the use of reopener clauses. DOD concurred with the report’s findings. DOD’s comments are included as appendix I. In responding to the legislative requirement, we primarily relied on our prior work on defense contractor restructuring activities. As part of our prior work, we reviewed information prepared during DOD’s certification process, including the contractor’s restructuring proposal, DCAA audit reports, negotiation memorandums, and other pertinent information to determine the amount of restructuring savings and costs expected for each of these business combinations. To determine the amount of restructuring costs paid and estimated savings realized, we reviewed DOD’s November 1997 and March 1998 reports to Congress on defense industry restructuring. To determine the feasibility of developing a methodology for assessing restructuring savings on individual contract prices, we reviewed restructuring activities at 10 contractor business segments, including at least 1 segment from each of the 7 business combinations. We generally selected those business segments with the largest projected amount of restructuring savings. In assessing whether restructuring savings could be traced to contract prices, we tried to compare the overhead rates that were in effect before restructuring with the rates that were in effect after restructuring. We also examined contract-related documents to determine if direct costs were less than before restructuring. Also, we requested that contractor officials identify comparable items that DOD purchased before and after restructuring. We accepted the items the contractors identified and did not make an independent evaluation to determine whether they identified all available comparable items. We compared the prices DOD paid for these items before and after restructuring to determine if the prices had been affected by restructuring and other factors. In addition, we determined whether contracting officers had included downward-only reopener clauses in fixed-price contracts negotiated before the contractors had adjusted their forward pricing rates to reflect the impact of restructuring. For those contracts containing such clauses, we determined whether contracting officers had exercised the clauses and, if so, the amounts by which the contracts’ prices were reduced. We discussed the results of our analyses with officials from the business combinations, DOD, DCMC, and DCAA. We performed work in September 1998 to update some of the information included in our prior reports. The work was carried out in accordance with generally accepted government auditing standards. We are sending copies of this report to the Secretary of Defense; the Commander, DCMC; the Director, DCAA; and the Director, Office of Management and Budget. Copies will also be made available to others upon request. Please contact me at (202) 512-4841 if you or your staff have any questions concerning this report. Major contributors to this report are listed in appendix II. Defense Contractor Restructuring: Benefits to DOD and Contractors (GAO/NSIAD-98-225, Sept. 10, 1998). Defense Contractor Restructuring: DOD Risks Forfeiting Savings on Fixed-Price Contracts (GAO/NSIAD-98-162, July 17, 1998). Defense Industry Restructuring: Updated Cost and Savings Information (GAO/NSIAD-98-156, Apr. 30, 1998). Defense Industry Restructuring: Clarification of Cost and Savings Issues (GAO/NSIAD-97-186R, June 17, 1997). Defense Industry Restructuring: Cost and Savings Issues (GAO/T-NSIAD-97-141, Apr. 15, 1997). Defense Restructuring Costs: Information Pertaining to Five Business Combinations (GAO/NSIAD-97-97, Apr. 1, 1997). Defense Restructuring Costs: Projected and Actual Savings From Martin Marietta Acquisition of GE Aerospace (GAO/NSIAD-96-191, Sept. 5, 1996). Defense Contractor Restructuring: First Application of Cost and Savings Regulations (GAO/NSIAD-96-80, Apr. 10, 1996). Defense Restructuring Costs: Payment Regulations Are Inconsistent With Legislation (GAO/NSIAD-95-106, Aug. 10, 1995). Overhead Costs: Defense Industry Initiatives to Control Overhead Rates (GAO/NSIAD-95-115, May 3, 1995). Defense Downsizing: Selected Contractor Business Unit Reactions (GAO/NSIAD-95-114, May 3, 1995). Defense Industry Consolidation: Issues Related to Acquisition and Merger Restructuring Costs (GAO/T-NSIAD-94-247, July 27, 1994). The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a legislative requirement, GAO provided information on: (1) the six business combinations for which the Department of Defense (DOD), as of September 30, 1998, had certified that the projected restructuring savings should exceed associated restructuring costs; and (2) on a seventh combination, Hughes Aircraft Company's acquisition of General Dynamics' missile operations. GAO noted that: (1) in April 1998, GAO reported that DOD estimated it would save a net of $3.3 billion between 1993 and 2000 from restructuring activities carried out by the seven business combinations; (2) GAO also reported that DOD estimated it had realized savings of about $1.9 billion as of August 1997, or more than half of the expected savings; (3) now, DOD estimates it has realized savings of about $2.1 billion, or 64 percent of the expected savings; (4) while GAO determined that selected restructuring activities had lowered the operational costs of the business combinations by hundreds of millions of dollars, it was not feasible to develop a methodology for precisely determining how contract prices were affected; (5) to make such a determination requires isolating the impact of restructuring from nonrestructuring-related factors, such as changes in business volume, quantities purchased, and accounting practices; (6) DOD, the contractors, and GAO were not able to isolate the effects of restructuring from those of other factors; and (7) however, other methods exist through which DOD can ensure that it receives its equitable share of restructuring savings in a timely manner. |
Medical devices encompass a wide array of products with myriad uses. A medical device can be any product used to cure, prevent, diagnose, or treat illness, provided that its principal intended purposes are not achieved primarily by chemical or metabolic action, as would be the case with a pharmaceutical. Devices range in complexity from simple tongue depressors to heart pacemakers and sophisticated imaging systems. There are more than 100,000 products in over 1,700 categories, and they cover a wide spectrum of risk. The U.S. medical device industry grew from 5,900 firms in 1980 to 16,900 firms in 1995. U.S. consumption of medical devices exceeded $40 billion in 1994. The 1976 Medical Device Amendments to the Federal Food, Drug, and Cosmetic (FFD&C) Act gave FDA expanded responsibility for regulating medical devices in the United States. FDA’s regulatory responsibilities have three components: (1) approving new medical devices’ entry into the market; (2) monitoring device manufacturers’ compliance with FDA laws and regulations, including the good manufacturing practices (GMP) regulation to ensure continued quality control; and (3) operating a postmarketing surveillance (PMS) system to gather information about problems that could necessitate withdrawing a device from the market or taking other actions. The Office of Device Evaluation within FDA’s Center for Devices and Radiological Health is responsible for the evaluation of medical device applications. During fiscal year 1994, the Office of Device Evaluation received 16,905 submissions for review, of which it classified 10,293 as major submissions. The 1976 amendments established a three-part classification system for devices, based on the device’s level of risk and the extent of control necessary to ensure the safety and effectiveness of the device. Most medical devices are Class I or Class II (low and medium risk) and reach the market through FDA’s premarket notification—or 510(k)—process.Under its 510(k) authority, FDA may grant clearance for the marketing of devices if it determines that they are substantially equivalent to certain devices already on the market—called predicate devices. Once FDA has made that determination, a manufacturer can begin to market the new device. High-risk, or Class III, devices enter the market through the premarket approval (PMA) process. A PMA review is more stringent and typically longer than a 510(k) review. If a manufacturer needs to test a new device in human subjects before applying for marketing approval or clearance, and if the device presents a significant health risk to subjects, the manufacturer applies to FDA for an Investigational Device Exemption (IDE) to allow use of the device in clinical studies. See appendix II for a more detailed discussion of FDA’s review processes. The U.S. medical device industry values FDA’s “stamp of approval” but has leveled several criticisms against FDA. The industry contends that FDA takes too long to review applications and that review time increased drastically in the early 1990s. Manufacturers maintain that FDA’s review process is unpredictable and burdensome, particularly with regard to the amount and types of data they must submit. Additionally, the industry has stated that FDA is not always reasonable when it requires randomized human clinical trials to demonstrate that a device is safe and effective. In 1990, the EU began to adopt a series of three directives to regulate the safety and marketing of medical devices throughout the EU. The directives specify roles in the device regulatory system for the European Commission; the governments of member states; and review and approval organizations called notified bodies, which are often private entities. When this system is fully in place in several years, every medical device marketed in the EU will have to carry a “CE” mark, indicating that it meets common standards of performance and safety, known as essential requirements. Devices carrying the CE mark can be marketed throughout the EU. The first EU directive, for active implantable devices, covers powered devices that remain in the human body, such as heart pacemakers. It first took effect on January 1, 1993. During a 2-year transitional period, member states could continue to implement their national laws governing these devices, and manufacturers had the choice of either seeking approval to market a device in individual countries under each country’s laws or following the procedures that would allow the device to carry the CE mark and be marketed throughout the EU. As of January 1, 1995, all active implantable devices were subject to the new EU system alone. The second directive, known as the Medical Devices Directive (MDD), covers most other medical devices, ranging from bandages to hip prostheses. The MDD took effect on January 1, 1995, and its transitional period will last until June 13, 1998. The third directive, covering in vitro diagnostic medical devices, such as blood grouping reagents and pregnancy test kits, is under development and will not take effect until at least 1998. The U.S. and EU medical device regulatory systems share the goal of protecting public health, but the EU system has the additional goal of facilitating EU-wide trade. Another distinction between the two systems pertains to the criteria for reviewing devices. Devices marketed in the EU are reviewed for safety and performing as the manufacturer intended; devices marketed in the United States are reviewed for safety and effectiveness. Effectiveness includes the additional standard of providing benefit to patients. One goal of the EU medical device review system is to lower trade barriers and achieve a single market throughout the EU by harmonizing member states’ regulatory controls. At the EU level, the Directorate General for Industry is responsible for implementing the medical device directives. The directives specify that a member state may not create obstacles to the marketing of a CE-marked device within its territory. The other goal of the EU system is to protect public health. Medical devices that circulate in the EU must meet the medical device directives’ essential requirements, the first one being that devices will not compromise the health and safety of patients. The responsibility for enforcing the national regulations that implement the directives in the member states lies with each country’s Department of Health. Before the inception of the EU system, the level of regulation in member states varied widely, and in some countries most medical devices were not regulated at all. Therefore, although the system was created within the context of encouraging trade, in many European countries the directives will increase the level of medical device safety regulation. The U.S. medical device regulatory system exists within a public health context. FDA’s mandate is to ensure that devices that reach the public are safe and effective. The agency has limited statutory responsibility to promote trade. Devices marketed in the EU under the new regulatory system must conform to the essential requirements contained in the applicable medical device directive. Because the directives cover a wide range of products, the essential requirements provide broad targets for manufacturers to meet. The essential requirements are divided into two sections. First, the general requirements state that devices must be designed and manufactured in a way that will not compromise patient health and safety and that devices must perform as the manufacturer intended. Second, the design and construction requirements cover topics such as chemical, physical, and biological properties; labeling; radiation safety; and accuracy of measuring functions. The EU system relies greatly on recognized performance standards, which can be international, European, or national. Demonstrating that a device meets such standards is voluntary, but this is an acceptable—and often convenient—way to demonstrate that a device complies with the essential requirements. In reviewing medical device applications FDA uses the two criteria mandated by law—safety and effectiveness. For devices entering the market through the 510(k) route, the manufacturer must demonstrate comparative safety and effectiveness, that is, the new device is as safe and effective as the legally marketed predicate device. In evaluating the safety and effectiveness of a Class III device through the PMA route, FDA must determine that the application demonstrates a reasonable assurance that the device is safe and effective. To satisfy the effectiveness requirement, a device must provide beneficial therapeutic results in a significant portion of the target patient population. The U.S. criterion of effectiveness encompasses more than the European criterion of performing as the manufacturer intended; it requires the device to benefit certain patients. For example, to market an excimer laser in the United States, the manufacturer must demonstrate not only that the laser can cut tissue from the patient’s cornea, but also that the laser procedure lessens or eliminates the patient’s nearsightedness. In the EU, if the manufacturer specified that the purpose of the device was to eliminate a patient’s nearsightedness, it would have to demonstrate the validity of that claim. However, if the claim was restricted to the device’s ability to remove tissue in a particular way, judgment of the appropriate use of the device would be left to clinicians. In evaluating effectiveness, FDA generally reviews an individual device on its own merits. In certain situations, however, reviewers consider whether a new device is potentially less effective than available alternative therapies. FDA’s position is that the agency evaluates comparative effectiveness only when a less effective device could present a danger to the public, that is, when a device is designed to treat a disease that (1) is either life-threatening or capable of causing irreversible morbidity, or (2) is a contagious illness that poses serious consequences to the health of others. The EU gives major regulatory responsibilities to public and private bodies; in contrast FDA has sole responsibility in the United States. Both systems link the level of medical device review to the degree of control needed to ensure device safety. However, the two systems use different procedures to reach approval or clearance decisions. Governmental and private organizations both perform major functions in the EU system for regulating medical devices. Each member state designates a competent authority, usually in the Department of Health, which is responsible for implementing and enforcing the medical device directives in that country. The competent authority ensures that the directives are incorporated into national law, approves clinical investigations of devices, and operates the country’s reporting system for adverse incidents. Additionally, the medical device directives contain a safeguard clause. This clause gives the competent authority the power to withdraw an unsafe device from the market; the competent authority can be overruled by the European Commission after consultation among all of the parties concerned. (See app. III for a more detailed discussion of the safeguard clause.) The competent authority also serves as the country’s liaison with the European Commission and other member states. One of the most important responsibilities of the competent authority is to designate and certify the notified bodies located in that country. NBs are the organizations that perform conformity assessments on medical devices of medium or high risk that require the intervention of an independent organization prior to CE marking. The NBs determine whether a device conforms to the essential requirements in the relevant medical device directive. If the device is judged to be in conformance, the manufacturer may then place the CE mark on the product and market it throughout the European Union. NBs may be governmental or private entities, but most are private. In making their NB designations, competent authorities consider whether organizations meet the criteria for NBs contained in the medical device directives. These criteria include standards of competence, impartiality, and confidentiality. Competent authorities may periodically audit NBs and can withdraw NB status from an organization that does not continue to meet the criteria. The competent authority certifies that an NB is qualified to evaluate certain types of devices and to perform specific conformity assessment procedures. Some NBs have a limited certification; for example, they can evaluate only active medical devices or can perform only certain types of quality assurance reviews. Others are qualified to evaluate almost the full range of devices. If an NB is not competent to perform an assessment procedure that a device requires, it can subcontract with another NB or with another organization, such as a testing laboratory, to perform that part of the assessment. A manufacturer may select an NB located in any member state to assess its device. This is a contractual relationship, with the manufacturer paying a fee for the NB’s services. As of October 1995, there were 40 NBs throughout the EU. Germany and the UK had the largest number, 16 and 8, respectively. Representatives of European industry groups and public and private officials in the UK and Germany told us that manufacturers consider several factors when selecting an NB. These include the NB’s expertise and experience with specific devices and assessment procedures, language, cost, and whether the manufacturer has worked with the NB previously. In the United States, regulatory responsibilities rest with one government body—FDA. Currently, however, FDA is creating a pilot program to test the use of private third parties to review low- to moderate-risk devices requiring 510(k) clearance. The agency will individually review and accept third-party review organizations interested in participating in the pilot. After completing a device review, the third party will make a clearance recommendation to FDA. In contrast with the role of European NBs, the private reviewers participating in FDA’s pilot program will not have authority to make clearance decisions. FDA will retain that authority and will base its decision on the third party’s documented review. Manufacturers’ participation in the pilot will be voluntary; they may continue to opt for FDA review. Applicants that must submit clinical data on their devices will not be able to select third-party review; FDA has prepared a preliminary list of devices that may be included in the pilot. FDA expects that applicants that do participate will pay a fee directly to the third party to conduct the review. The pilot is scheduled to begin in mid-1996 and will operate for 2 years; during the second year FDA plans to evaluate the feasibility of using third parties to conduct timely and high-quality reviews of devices. Like the United States, the EU has a risk-based device classification system. The EU has four categories, however, instead of three. The manufacturer determines the appropriate class for a new device, based on classification rules in the directives. The manufacturer may also consult with the NB reviewing the device. In the United States, the manufacturer makes a claim regarding which class a device belongs in when it submits an application for FDA review. FDA, however, has final authority over the classification decision. (See app. III for a more detailed discussion of the EU classification system and app. II for a more detailed discussion of the FDA classification system.) Just as every device released in the United States must demonstrate safety and effectiveness, every device in the EU, no matter what its class, must comply with the essential requirements. In both systems, the purpose of classifying devices is to dictate the level of control the system exerts to ensure that devices comply with the respective requirements. The EU directives set out a complex array of assessment procedures that manufacturers must follow to demonstrate that a device conforms to the essential requirements. A device’s class determines the type of conformity assessment review the device must undergo, but the manufacturer is usually permitted to choose an assessment route from at least two options—often involving two general approaches. One approach is a review of the full quality assurance (QA) system that governs every phase of the manufacture of a device, from design through shipping. Officials of a German NB told us that one goal of a full QA review is to ensure that the manufacturer has written quality control procedures for every one of these phases and that these procedures are followed. NB reviewers conduct on-site inspections as part of this process. The other approach consists of two components. The first is a procedure called a type examination, in which the NB physically tests a prototype of the device to determine if it meets certain standards. The type examination component is paired with a limited QA review focused only on the production phase of manufacture. This review is intended to ensure the consistency of product quality. We refer to this overall approach as the type examination route. Appendix III contains a more detailed description of the different routes of conformity assessment and the assessment requirements for different device classes. The EU system includes both of these device approval routes as a compromise between member states that tended to rely on one approach or the other. For example, in the UK a voluntary oversight system had emphasized full QA system review, while the type examination approach had prevailed in Germany’s regulatory system. Both the EU and U.S. systems minimize oversight for the devices considered least risky. For EU Class I devices that do not involve a measuring function or sterile products, manufacturers may simply furnish a declaration that the device conforms to the essential requirements and maintain technical documentation that would permit review of the device. There is no NB review, but the manufacturer must register such devices with the competent authority in the country of the manufacturer’s place of business. In the United States, FDA exempts selected low-risk devices from premarket notification requirements. Manufacturers must still register their devices with FDA and must comply with GMP rules. Most new U.S. devices fall into Class I or Class II and are evaluated for substantial equivalence to devices already on the market. FDA determines whether a device has the same intended use and same technological characteristics as a predicate device by reviewing a 510(k) application submission. If a new device has the same intended use and technological characteristics, FDA deems it substantially equivalent to a predicate device and allows the device to be marketed. Also, if a device has new technological characteristics and FDA determines that they do not raise different questions of safety or effectiveness, FDA will find the device to be substantially equivalent. If the device has new technological characteristics and raises different questions of safety and effectiveness, the device will be found not substantially equivalent. The manufacturer can then seek approval for it through the premarket approval process. FDA requires a PMA review for most Class III devices. This is a more rigorous review because of the device’s inherent high risk or lack of established safety and effectiveness information. A multidisciplinary staff at FDA evaluates the PMA application. Nonclinical studies that the team reviews may include microbiological, toxicological, immunological, biocompatibility, engineering (for example, stress, wear, fatigue), and other laboratory or animal tests as appropriate. The team also reviews the results of any clinical investigations involving human subjects. Generally, FDA evaluates a manufacturer’s tests and does not perform its own tests on products. For a small portion of PMA reviews, FDA reviewers seek advice from an advisory panel of clinical scientists in specific medical specialties and representatives of industry and consumer groups. U.S. device manufacturers have expressed concern that FDA asks them to submit an excessive amount of data during the 510(k) review process. The director of FDA’s Office of Device Evaluation told us that FDA requires only what is necessary to establish that a device is as safe and effective as its predicate. She also told us that FDA has chosen to interpret the 510(k) requirements so that more devices can go through that review process rather than the longer PMA process. As a result, the agency needs enough data to demonstrate that those 510(k) devices meet the standard of substantial equivalence and do not raise new concerns regarding safety and effectiveness. When an NB certifies a manufacturer’s full QA system, the manufacturer may be able to attach the CE mark to several related products. The philosophy behind this approach is that if a company has a good design and manufacturing system, the devices it produces will be safe and perform as the manufacturer claims. Therefore, the full QA assessment route does not require the NB to conduct individual reviews of related devices that are produced under the same QA system, although the NB can do so when the situation warrants it. The certification covers the related devices, allowing the manufacturer to market all of them without going through an additional conformity assessment. Representatives of a British industry group told us that the QA approach makes it possible to continually monitor a company without testing individual items that may not be representative of the overall quality of production. Officials who work in the EU system told us that they expect manufacturers to choose the full QA route to conformity assessment more frequently than the type examination route. This route can be particularly advantageous for larger companies. The officials believe the type examination route is more likely to appeal to smaller companies that do not produce many product lines or a company that wants to get a particular device to market before it has time to put a full QA system in place. The kinds of standards manufacturers must meet during European QA reviews are similar to the GMP requirements in the U.S. system. (See app. II for additional information about GMP requirements.) However, in contrast to the ability of a full QA review to stand alone as a conformity assessment route for some devices in the EU, FDA never bases a 510(k) clearance or PMA approval decision solely on a GMP inspection. Some U.S. medical device manufacturers have raised concerns that FDA sometimes asks that a new medical device be tested in a clinical trial when the manufacturers believe that approach is inappropriate and unwarranted. They have also asserted that clinical trials can be performed more quickly in Europe. European officials told us that prior to the issuance of the EU medical device directives, Europe had very few requirements for clinical investigations. Under the new system, manufacturers may be required to provide clinical evidence that a device meets the essential requirements for safety; this evidence may come from either published scientific literature on similar devices or data from a clinical trial on the device under consideration. Implementation of the EU medical device directives may result in clinical trials being required more frequently than they had been in the past. Officials from a German NB discussed with us circumstances under which they would be likely to need data from a clinical trial to evaluate a new device under the EU directives. If the device uses an accepted technology to treat a medical indication for which use of that technology is also accepted, a clinical trial would not be necessary. If both the technology and the application are novel, however, they said they would require a clinical trial. In situations where there is a mix of novel and approved device technology and medical indication, they would need to make a judgment call. They said that regardless of whether a clinical trial is necessary, clinical data, based on either previous clinical trials, scientific literature, or field experience, would have to be provided. Although it is unclear how frequently European reviewers will ask manufacturers to perform clinical trials, FDA officials believe that clinical trials are often needed to establish the safety and effectiveness of devices undergoing PMA review. According to FDA, fewer than 10 percent of the medical device products FDA reviews under the 510(k) process require clinical trials. When FDA does require a clinical trial during a 510(k) review, the agency is looking for clinical confirmation that a device is as safe and effective as the legally marketed predicate device. NBs carry out a regulatory function within the EU’s medical device system, but the manufacturers whose devices they review are also their clients. This raises questions about the independence of the NBs. Additionally, NB employees are subject to less comprehensive conflict-of-interest rules than are FDA device reviewers. Unlike FDA, an NB is in the complicated position of both performing a public health function—and in that capacity having to answer to a governmental competent authority—and having a client relationship with the manufacturer that has hired it to review a device. NBs have a duty to ensure that medical devices that carry the CE mark conform to the EU medical device directives’ essential requirements regarding safety and performance. At the same time, however, they are in competition with each other to secure the business of manufacturers seeking assessment services. The businesses of some NBs include consulting work as well as product reviews, which can further complicate their independence. The director of the UK competent authority told us that if an organization has a consulting arm, his agency checks to see if the consulting function is kept separate from the conformity assessment function. Only then can it be designated as an NB. An EU official told us that he believes the European Commission needs to address this problem of potential conflict of interest for NBs. The EU medical device directives require the staff of NBs to be free of all pressures and inducements, particularly financial, that might influence their judgment or the results of their reviews, especially from anyone with an interest in the outcome of the review. To meet this requirement, NBs and their personnel must comply with European standards governing potential conflicts of interest. These standards are very general. Essentially, they (1) prohibit anyone involved in product testing or accreditation from having a commercial, financial, or other interest that could affect their judgment; and (2) attempt to shield laboratory and certification personnel from control by anyone with a direct financial interest in the outcomes of testing and accreditation. Key terms in the standards, such as control, direct, commercial interest, and financial interest, are not defined. Officials of NBs we visited told us that their employees are bound by international standards and that they must disclose potential conflicts of interest in connection with their assignments. One official told us that as an internal control, the staff who conduct the periodic follow-up surveillance reviews of manufacturers after the initial certification of a product or QA system are different from those who conducted the initial review. FDA employees are subject to a more comprehensive set of rules than are NB personnel. FDA rules include a substantial list of general rules that encompass all the goals and prohibitions included in the EU rules. In addition, they include supplemental guidance on specific matters that could present conflicts of interest, for example, outside employment, stock ownership, gifts, entertainment, filing responsibilities, and political activity. The EU rules are silent on how the general rules might apply in these situations. The EU medical device system is new and not yet fully operational. Although FDA’s system has been in place for almost 2 decades, the agency’s process is in flux as managers try to respond to criticism by experimenting with streamlined procedures. It is too early to evaluate the impact of those efforts on the length of FDA’s review process. At this time there are no data on the experience of the EU device review system that permit meaningful comparison with FDA. In contrast to FDA’s almost 20 years of experience in carrying out the U.S. device review program, implementation of the EU system is quite new. The only medical device directive that is fully in effect is the one for active implantable devices. The transition period for the directive that covers most devices began just 1 year ago. The system is not yet fully in operation. For example, each competent authority is supposed to establish a system for manufacturers to report adverse incidents with devices; eventually all of these national systems will be electronically linked. The UK already had an extensive voluntary system in place that it can build on, but most countries have barely begun to develop their systems. A UK official told us it will probably be a few years before an EU-wide system is in place. In the meantime officials are communicating by fax and letter when they identify problems. It is too early to know how some aspects of the EU system will translate from the directives into a practical working system. For example, the various competent authorities are bound by the same criteria when designating NBs, and the various NBs—both within and across individual member states—are all supposed to use the same criteria to perform conformity assessments. At present there is no way to measure whether that consistency is occurring in practice. European officials told us that experience levels among the competent authorities and NBs vary. For example, in countries that previously had a regulatory program in place, such as the UK and Germany, the competent authorities already had experience carrying out some of the functions the EU system requires of them. Similarly, some NBs have long histories of evaluating medical devices or QA systems, while others have considerably less experience. Even well-established NBs may have greater experience with particular conformity assessment routes or device categories. For example, NBs in the UK tend to have extensive experience performing full QA system reviews and some German NBs have extensive experience with product testing. Medical device manufacturers in the United States have charged that FDA takes too long to approve new medical devices and have asserted that the review process in Europe is faster. In response to criticism about the length of its device review process, FDA is attempting to better manage and streamline its system by experimenting with different review procedures. Agency officials believe these initiatives have reduced review time, but it is too early to evaluate their impact. FDA’s management actions include the May 1994 implementation of a three-tier system of review to improve management of its workload and better link the rigor of review with a device’s level of risk. In addition, since December 1994, FDA has exempted close to 300 additional medical devices from premarket notification requirements and moved other devices into lower classification categories in an effort to concentrate on riskier products and reduce the regulatory burden on manufacturers. FDA is also experimenting with an expedited review process for life-sustaining and life-saving devices under which selected applications move to the front of the review queue. At least 40 devices had been reviewed under this process as of July 1995. Additionally, FDA is refusing to accept deficient or poorly prepared applications until manufacturers provide the information needed for review. We recently analyzed patterns in review time for FDA device applications submitted from October 1988 to May 1995. Review times for 510(k) applications and PMA supplements submitted in 1994 were still higher than they were in 1990 but had decreased from 1993 levels. The trend for original PMAs was less clear, in part because FDA has not yet completed the review of a large portion of those applications. The EU does not have data on the length of its review process that can be compared with the data available about FDA’s experience. The EU system has been in effect for only a short time. Anecdotal information suggests review time may be shorter in the EU, but differences between the systems make it difficult to find comparable benchmarks. For example, NBs may have extensive interaction with manufacturers before the review process formally begins, and they sometimes perform preliminary reviews before beginning the official conformity assessment. This could make it difficult to identify the date on which the NB’s review begins. For similar reasons of lack of comparable data, it is also difficult to compare FDA’s record with the experience of individual European countries prior to initiation of the EU-wide system. The EU system for regulating medical devices is not only new—it is not yet fully in place. Therefore, it is too early to evaluate its success in ensuring the safety of medical devices and bringing them to market in an efficient manner. Because the major actors in the EU system have not had sufficient time to establish a record on how they will carry out their duties, it will be some time before information is available to answer the following questions: How strictly will competent authorities oversee NBs, for example, will competent authorities rescind certifications of NBs if warranted? Will the performance of all competent authorities and NBs be of equal quality, and therefore, will public health authorities and consumers be able to have the same level of confidence in devices no matter where they are reviewed? Will the full QA system and type examination conformity assessment routes both prove to be appropriate ways to regulate devices? Will NBs maintain the necessary degree of independence from manufacturers who are their clients? How will NBs implement requirements for clinical evidence on new devices? Will an adequate postmarket surveillance system be developed? U.S. government officials who want to consider integrating features of the EU approach into the U.S. device review system will be better able to assess the value of the EU system after it accumulates several years of experience. The U.S. medical device industry has advocated giving private third parties a role in the review of medical devices, and FDA is exploring this possibility in a pilot project. Ensuring that private reviewers have the necessary independence, requisite expertise, and sufficient resources would enhance the confidence of the Congress and the American public in the integrity of the device review process. The importance of this assurance would increase if private review organizations were given the added authority of clearing new devices for marketing. FDA and European officials reviewed a draft of this report. FDA’s written comments are reproduced in appendix IV. FDA generally found the report to be accurate and complete and made a number of technical comments clarifying aspects of the agency’s review processes. We incorporated these as appropriate, basing the changes in some instances on further discussions with FDA officials. We also incorporated technical clarifications on the EU system received from European officials. In its comments, FDA stated that the EU system does not evaluate individual devices, but instead evaluates a manufacturer’s quality assurance system. As we noted in the draft report, in some situations the EU system does evaluate individual devices, such as when a manufacturer chooses the type examination route of conformity assessment or when a Class III device’s design dossier is reviewed. We will distribute this report to the Secretary of Health and Human Services, the Commissioner of the Food and Drug Administration, and other interested parties. This report was prepared under the direction of Mark V. Nadel, Associate Director for National and Public Health Issues. If you or your staff have any questions, please call me at (202) 512-7119 or Bruce D. Layton, Assistant Director, at (202) 512-6837. Other major contributors to this report include Helene F. Toiv, Claude B. Hayeck, Mary W. Freeman, Michele Grgich, and Liv Gorla. For our review of the European Union’s medical device approval process, we conducted field work in Germany and the United Kingdom. These countries were ahead of most other member states in adopting the EU regulatory system into their national laws and had greater experience with implementing the new system. Additionally, over half of the notified bodies, which review and approve medical devices under the EU system, were located in these two countries. In Germany and the UK we interviewed government health officials responsible for medical device regulation; officials from two NBs, TÜV Product Service and the British Standards Institution; and representatives of medical device industry groups. We also interviewed EU officials and a representative of an EU-wide industry association. We reviewed EU documents governing the EU regulatory process. Several officials we interviewed reviewed a draft of this report. We reviewed Food and Drug Administration documents and policies as well as laws and regulations governing FDA. In addition, we interviewed officials from FDA’s Center for Devices and Radiological Health. We talked with representatives of the U.S. medical device industry, including the Health Industry Manufacturers Association, the National Electrical Manufacturers Association, and the Medical Device Manufacturers Association, as well as representatives of individual device companies. We also reviewed position papers of several industry groups. We interviewed representatives of organizations with expertise on product review and certification, including officials from the U.S. Department of Commerce; Underwriters Laboratories Inc.; the American National Standards Institute; and the Emergency Care Research Institute. We conducted our review from March through December 1995 in accordance with generally accepted government auditing standards. This appendix provides additional information about several features of the U.S. system for regulating medical devices and FDA review procedures. The process of bringing a new medical device to market takes one of two routes—premarket notification or premarket approval. Most new devices are variations of already marketed devices, are classified as low to moderate risk, and reach the market through FDA’s premarket notification—or 510(k)—review process. During the 510(k) review, FDA judges whether a device is substantially equivalent to one already on the market. The premarket approval (PMA) process is reserved for high-risk devices. PMAs and PMA supplements require a more stringent FDA review, which may include the analysis of clinical data to provide a reasonable assurance of safety and effectiveness. In addition, manufacturers must comply with certain postmarket requirements such as reporting of certain device-related adverse events. In fiscal year 1994, FDA’s Office of Device Evaluation received 6,434 510(k) applications and 415 PMAs and PMA supplements. Medical devices are grouped into three classes according to (1) the degree of potential risk and (2) the types of regulatory control needed to reasonably ensure their safety and effectiveness. Class I devices (for example, bedpans and tongue depressors) are those for which general controls provide reasonable assurances of safety and effectiveness. Class II devices (for example, syringes and hearing aids) require special controls in addition to general controls. Class III devices (for example, heart valves and pacemakers) are subject to general controls and must undergo more rigorous scientific review and approval by FDA as well. General controls include registering device manufacturing facilities, providing FDA with regularly updated lists of marketed devices, complying with good manufacturing practices, and maintaining records and filing reports of device-related injuries and malfunctions. The Safe Medical Devices Act of 1990 (SMDA ) revised the requirements for Class II devices, subjecting them to both general and special controls. Special controls include performance standards, postmarketing surveillance, patient registries, and other controls as deemed necessary. Class III devices are subject to the PMA process, which requires the manufacturer to present evidence, often including extensive clinical data, that there is a reasonable assurance that a device is safe and effective before placing it on the market. To help assess the appropriate level of review for devices, the Center for Devices and Radiological Health in May 1994 introduced a three-level “triage” system that, within the existing classification system, assigns priorities for application review based upon the complexity and risk of the device. A tier I review is essentially a labeling review to ensure that the label correctly identifies the intended use of the device. Most Class I devices fall within tier I because a less rigorous scientific evaluation of these low-risk devices does not adversely affect the public health. A tier II review is a scientific and labeling review. This tier encompasses the majority of 510(k)s and select PMA supplements. A tier III review is an intensive scientific and labeling review, using a team review approach for devices utilizing new technology or having new intended uses. FDA convenes an advisory panel when it lacks the expertise to address questions of safety and effectiveness for devices placed in tier III or when it is otherwise appropriate to obtain advice on scientific matters. Most new medical devices incorporate incremental changes to devices already on the market. To clear these devices for marketing, FDA determines whether they are substantially equivalent to (that is, as safe and effective as) legally marketed predicate devices. Substantial equivalence means that a device has (1) the same intended use and same technological characteristics as the marketed device or (2) the same intended use and different technological characteristics—but is as safe and effective as the marketed device and does not raise different questions of safety and effectiveness. FDA initially determines whether a 510(k) submission is sufficiently complete before undertaking a substantive review. During the review, FDA determines the intended use of a device by examining the manufacturer’s proposed label statements, including statements in promotional materials that describe the device and its use. To evaluate technological characteristics, FDA reviews the physical and performance characteristics of the device, such as device design, materials used, and power source. For example, in reviewing a new pacemaker lead made of polyurethane, FDA would assess performance testing information to confirm that the new lead is substantially equivalent to the predicate (or previously approved) lead. This is necessary because differences in chemical formulations of polyurethane or differences in design and assembly can affect safety and effectiveness. In arriving at a determination, FDA reviewers may use voluntary standards and guidance about a particular device. Reviewers also commonly used earlier agency decisions on 510(k)s for similar devices. Another resource is the files of the Center for Devices and Radiological Health, such as establishment inspection and postmarketing surveillance files. These files allow reviewers to examine the reviews of similar device types and to determine what questions, if any, were raised by FDA inspectors about a particular type of device. During the review of a 510(k) application, the reviewer may determine that additional information about the device is necessary to complete the review. This additional information may be descriptive information and/or performance testing information. Descriptive information includes the intended use, physical composition, method of operation, specifications, and performance claims of the device. Performance testing information can be data from bench testing or from animal or clinical testing. Upon completion of the review, the Office of Device Evaluation issues a decision letter, which is then sent to the manufacturer. The letter may contain one of the following: a substantially equivalent decision, a not substantially equivalent decision, a request for additional information, or a determination that the device is exempt from a 510(k) submission. As it does for 510(k)s, FDA first decides whether to accept the PMA or refuse to file it because it does not meet minimum requirements. If FDA accepts the application, a multidisciplinary staff evaluates the filed PMA. The team reviews nonclinical studies such as microbiological, toxicological, immunological, biocompatibility, animal, and engineering tests. The team also reviews the results of clinical investigations involving human subjects. During this stage, FDA prepares a critique of the scientific evidence of the safety and effectiveness of the device. During the review, FDA may, on its own initiative or if requested by the applicant, refer the PMA to an advisory committee representing the appropriate medical field for a “panel” review. FDA will request such a review when it lacks the knowledge or experience to evaluate the safety and effectiveness questions posed by the device or when it is otherwise appropriate to obtain advice on scientific matters. Problems identified in FDA’s critique of the scientific evidence can be discussed further during advisory panel meetings. The committee submits a final report to FDA, but the agency is not bound by the committee’s recommendations. The review team also checks the manufacturer’s compliance with the GMP regulation and makes a judgment about the quality controls used in the manufacture of a device. The purpose of the review is to ensure that the manufacturer is capable of producing devices of high quality. At the end of the approval review stage, FDA may take one of the following actions: Issue an order approving the PMA. Issue an order denying approval. Send the applicant an approvable letter indicating that the FDA intends to approve the device if certain problems (for example, labeling deficiencies) are resolved. Send the applicant a not-approvable letter describing significant deficiencies in the application. Eventual approval is not precluded if the manufacturer provides an adequate response. Almost all PMAs and a small subset of PMA supplements and 510(k)s require clinical trials to obtain answers to questions on safety and effectiveness. A researcher wishing to conduct a study involving human subjects to develop safety and effectiveness data for a medical device can apply to FDA for an IDE. An approved IDE application permits the use in a clinical study of a device that would ordinarily be subject to market clearance procedures. An IDE approval is needed for a significant risk device. For a nonsignificant-risk device (for example, daily wear contact lenses) investigation, the sponsor presents the proposed study to an institutional review board (IRB) along with a report of prior investigations and the investigational plan. If the IRB approves the investigation as a nonsignificant-risk study, the investigation is considered to have an approved IDE and can begin immediately. FDA is not involved in the approval process of the clinical study. If the IRB or FDA determines, however, that the proposed investigation involves a significant-risk device (for example, a heart valve), the sponsor must submit an IDE application to FDA. The application must contain an investigational plan that includes such information as the purpose of the study, a written protocol, a risk analysis and description of patient selection, a description of the device, monitoring procedures, labeling, and consent materials. An IDE application may also include data on the design of the device and data from bench and animal tests. FDA determines whether the study should be approved, considering such factors as whether the benefits of the investigation outweigh the risks and whether the proposed study is scientifically sound. The investigation can begin after the sponsor obtains both FDA and IRB approval for a significant-risk investigation. FDA conducts bioresearch monitoring inspections to help ensure that clinical investigations are conducted in accordance with study protocols and that the rights and safety of study participants are protected. FDA determines compliance with the GMP regulation primarily through factory inspections conducted by its field staff. Section 704(a) of the FFD&C Act gives FDA authority to conduct GMP inspections of medical device manufacturers. During these inspections, FDA investigators examine facilities, records of manufacturing processes, and corrective action programs. The results provide information necessary to evaluate a firm’s compliance with the medical device GMP regulation. FDA may initiate a GMP inspection for any of several reasons. These include routine scheduling, the need to obtain data on an industry new to FDA, investigation of a consumer or trade complaint, a product defect report, an adverse reaction to a device, or a device-related death. FDA also conducts GMP inspections in conjunction with approval of products. One key provision of the Safe Medical Devices Act of 1990 requires that manufacturers conduct postmarketing surveillance, such as studies to gather data on the safety and effectiveness of certain devices. This requirement applies to devices that (1) are permanent implants, the failure of which may cause serious adverse health consequences or death; (2) are intended for use in supporting or sustaining human life; or (3) present a potential serious risk to human health. FDA also has discretion to require postmarketing surveillance for other devices under certain circumstances. This appendix expands on information provided in the report about several features of the EU system for regulating medical devices. The EU Medical Devices Directive, which covers most devices, established a four-part classification system for medical devices. The rules for classification take into account the riskiness of the device, the device’s degree of invasiveness, and the length of time the device is in contact with the body. Class I devices are generally regarded as low risk and include most noninvasive products, certain invasive products, and reusable surgical instruments. Class IIa devices are generally regarded as medium risk and include both invasive and noninvasive products, generally for short-term use. This class includes some wound dressings; certain products that channel and store blood for administration into the body; surgically invasive devices for transient or short-term use; most active therapeutic devices that administer or exchange energy; and active diagnostic devices that supply energy (other than for illumination) absorbed by the body, such as ultrasonic imagers. Class IIb devices are also regarded as medium risk, but this class covers active products therapeutically delivering energy or substances at potentially hazardous levels. Devices placed in this class include blood bags, chemicals that clean or disinfect contact lenses, surgically invasive devices for long-term use, radiological equipment, and condoms and other contraceptive devices (except for intrauterine devices, which are in Class III). Class III devices are generally regarded as high risk and include products that are used to diagnose or monitor or that come in contact with the circulatory or central nervous system, such as vascular grafts. This category also includes devices that incorporate medicinal products, such as bone-cement containing an antibiotic. Under the EU system, the classification of a medical device governs the type of assessment procedure the manufacturer must undertake to demonstrate that the device conforms to the essential requirements in the relevant medical device directive. Generally, when an NB must perform aspects of conformity assessment, the manufacturer may choose the assessment route from two or more options. This type of review examines every aspect of the manufacturer’s quality assurance system, covering every phase of the manufacture of a device, from design through shipping. The phases involved in producing a new device for the market include a feasibility phase; design phase, which results in a written definition of the device; design verification, which involves creating prototypes of the device; mass production; and full market release. At each of these phases the manufacturer must ensure that it has defined the requirements for completing that phase and that the “deliverable” for that phase, such as a product design or a packaged device, is verified by qualified staff. A manufacturer choosing the full QA system route for a Class III device is also required to submit a design dossier for the NB’s review. The dossier may include specifications and performance data of the product as claimed; an explanation of how the product meets the essential requirements for safety; risk analysis, including risk control methods; electrical/mechanical/chemical constructional data, including drawings; design verification documents; and, when relevant, clinical investigation data. After certifying a manufacturer’s QA system, the NB must carry out periodic inspections to ensure that the manufacturer is continuing to implement the QA system. Additionally, the NB may pay unannounced visits to the manufacturer to check that the quality system is working properly. Under the full QA assessment route, the NB does not need to conduct individual reviews of related devices that are produced under the same QA system. If the NB certifies the manufacturer’s QA system, that certification covers the related devices. This practice allows the manufacturer to place a CE mark on and market all of the related devices without going through an additional conformity assessment review. Type examination is a procedure in which the NB ascertains and certifies that a representative sample of the device being reviewed conforms to the essential requirements. The NB reviews documentation on the device that the manufacturer provides and conducts a product test of the device. The NB physically tests a prototype of the device to determine whether it meets certain standards. The documentation reviewed might include documentation of other product tests. Type examination is always linked with a QA review limited to the production phase of manufacture. The QA review is intended to ensure the consistency of product quality. There are three types of limited QA reviews, as follows. In this type of review, the NB must individually test every device produced or test a random sample from every production batch. (This option is also referred to as batch verification.) Few companies choose this approach because it is very expensive. Under this type of review, the NB reviews the manufacturer’s QA system for the production stage of manufacturing devices, including inspection and QA techniques. The NB must carry out periodic inspections after certifying the production QA system and can pay unannounced visits to the manufacturer. Officials who work with the EU system reported to us that this is the type of production phase quality review that manufacturers select most often to complement type examination. The NB reviews and certifies the manufacturer’s system for inspecting and testing final products in an Annex VI review. The NB must carry out periodic inspections and can pay unannounced visits to the manufacturer. Under this procedure, which is available only for devices in Classes I and IIa, a manufacturer furnishes a declaration that a device conforms to the essential requirements and maintains technical documentation that would permit review of the device. The EU’s MDD specifies which conformity assessment routes each class of devices may use to demonstrate conformity with the essential requirements. Figure III.1 illustrates the assessment routes available to each device class. Annex IV Medical Devices Directive (Figure notes on next page) For Class I products that do not involve measuring devices or sterilization, manufacturers may simply furnish the declaration of conformity (Annex VII) and maintain sufficient technical documentation to permit review of the device. There is no NB review, but the manufacturer must register such devices with the competent authority in the country of the manufacturer’s registered place of business. If the device has a measuring function or must be placed on the market in a sterile condition, the manufacturer is also subject to one of the assessment routes covering production quality (Annexes IV, V, or VI). The NB’s review focuses only on the measurement or sterilization aspect of the device. The manufacturer itself may declare conformity with the essential requirements covering the design phase and choose one of the assessment routes covering production quality (Annexes IV, V, or VI). Alternatively, the manufacturer may undergo the full QA system review (Annex II). The manufacturer may choose either the full QA system review (Annex II), or type examination (Annex III) plus one of the production quality reviews (Annexes IV, V, or VI). The requirements are the same as for Class IIb, with two exceptions. If the manufacturer chooses the full QA system review (Annex II), it must also submit a design dossier to the NB. If the manufacturer chooses type examination (Annex III), it must choose either product verification (Annex IV) or production quality assurance (Annex V) for the production phase assessment. Product quality assurance (Annex VI) is not an option for Class III devices. The EU’s medical device directives have a safeguard clause that requires each member state’s competent authority to withdraw from the market CE-marked devices that the competent authority finds may compromise patients’ health or safety. The competent authority must immediately inform the European Commission both that it has taken this action and of its reasons for withdrawing the device. If the Commission agrees that the action was justified, it will inform the other member states that the device has been withdrawn. If the Commission believes the withdrawal was unjustified, it informs the competent authority that made the decision and the device manufacturer of that decision. If a competent authority persists in banning a CE-marked product from its country’s market, despite the European Commission’s decision that the device belongs on the market, the Commission can bring a legal proceeding in the European Court of Justice. European officials view the safeguard clause as a last resort, not something to be invoked routinely. If member states could routinely block the sale of CE-marked devices in their countries, the EU system’s goal of facilitating EU-wide trade would be undermined. Medical Devices: FDA Review Time (GAO/PEMD-96-2, Oct. 30, 1995). FDA Drug Approval: Review Time Has Decreased in Recent Years (GAO/PEMD-96-1, Oct. 20, 1995). Medical Technology: Quality Assurance Systems and Global Markets (GAO/PEMD-93-15, Aug. 18, 1993). Medical Technology: Implementing the Good Manufacturing Practices Regulation (GAO/T-PEMD-92-6, Mar. 25, 1992). Medical Technology: Quality Assurance Needs Stronger Management Emphasis and Higher Priority (GAO/PEMD-92-10, Feb. 13, 1992). Medical Devices: FDA’s 510(k) Operations Could Be Improved (GAO/PEMD-88-14, Aug. 17, 1988). The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a congressional request, GAO compared the Food and Drug Administration's (FDA) and the European Union's (EU) systems for reviewing and approving medical devices, focusing on: (1) key differences between the two systems; (2) the outputs of the two systems; and (3) the feasibility of FDA adopting features of the EU system. GAO found that: (1) U.S. and EU medical device regulatory systems share the goal of protecting public health, but the EU system is designed to facilitate EU-wide trade; (2) while EU reviews medical devices for safety and performance, FDA reviews devices for safety, effectiveness, and benefit to patients; (3) while EU gives major medical device regulatory responsibilities to public agencies and private organizations, FDA has sole responsibility over device regulation in the United States; (4) both systems link the level of medical review to device risk, but the two systems use different procedures to reach approval or clearance decisions; (5) questions and concerns have arisen regarding possible conflicts-of-interest in the EU medical device review process because EU notified bodies carry out a regulatory function within the EU medical device system and conflict-of-interest rules for EU reviewers are less comprehensive than in the United States; (6) sufficient data does not exist on the EU medical device review system to permit meaningful comparison with FDA because the EU system is new and not yet fully operational; and (7) it is too early to evaluate the impact of new FDA streamlined review procedures. |
On the morning he was being ousted as Donald Trump’s chief strategist last Friday, Steve Bannon had already turned the page. “Why do you sound unfazed?” a friend asked Bannon as news of his demise ricocheted across the web. “Because,” Bannon replied, “we’re going to war.” Hours later, Bannon was calling into the editorial meeting at Breitbart News, rallying his troops to continue the battles he waged inside the White House. “We have a duty to the country to be the vanguard of ‘The Movement,’” he told his staff, according to one person on the call. Bannon’s main targets are the West Wing’s coterie of New York Democrat “globalists”—Ivanka Trump, Jared Kushner and former Goldman Sachs president Gary Cohn—as well as the “hawks,” comprised of National Security Adviser H.R McMaster and his deputy, Dina Powell. “He wants to beat their ideas into submission,” Breitbart News Editor-in-Chief Alex Marlow told me. “Steve has a lot of things up his sleeve.”
The chaotic, war-torn West Wing of the past six months will be prologue, but the coming struggles will be as personal as they are ideological, waged not with leaks but with slashing Breitbart banners. On Sunday, Breitbart took renewed aim at McMaster, with a headline claiming he advocated “Quran Kissing.” But most of all, there’s a deep animosity between Bannon and Kushner, amplified by a lack of respect. Bannon finds Kushner’s political instincts highly questionable. “He said Jared is a dope,” one Bannon ally recalled. The two clashed fiercely on personnel decisions and policy debates, both domestic and international, many of which Bannon lost. But Bannon, who was the only West Wing advisor to publicly support the president’s response to the violence in Charlottesville, is especially galled at being scapegoated as an anti-Semite in its wake. “It’s one of the attacks he takes most personally because it’s not true,” a Breitbart staffer told me. Bannon’s allies lay out a more complicated backstory. Bannon, they say, lobbied Trump aggressively to move America’s embassy in Israel from Tel Aviv to Jerusalem, but was blocked by Kushner. And, according to three Bannon allies, Bannon pushed a tougher line against the Palestinians than Kushner did. In May, when Palestinian President Mahmoud Abbas visited the White House, Bannon stayed home. “I’m not going to breathe the same air as that terrorist,” Bannon texted a friend.
In the final weeks, Bannon was relentlessly tarred as a prime West Wing leaker, but Bannon’s allies make a similar case about Kushner. Specifically, they believe that Kushner cultivated a relationship with Matt Drudge, who frequently pushed anti-Bannon headlines—“The Total Eclipse of Steve Bannon”; “Bannon ‘Is the Real President”—in the weeks leading up to Trump’s decision to defenestrate him. Bannon also told friends that he believed Kushner encouraged Fox News chairman Rupert Murdoch to lobby Trump to fire him. Last week, The New York Times reported that Murdoch told Trump over a private dinner with Kushner that Trump needed to jettison his chief strategist. The Bannon camp believes that Murdoch was especially receptive to Kushner’s lobbying because Murdoch is worried about the rise of Sinclair Broadcasting as a competitor to Fox, and blames Bannon for Trump’s decision so far not to block the Sinclair’s $3.9 billion takeover of Tribune Media in May.
Bannon has media ambitions to compete with Fox News from the right. Last week in New York, he huddled with his billionaire benefactor, Robert Mercer, and discussed ways to expand Breitbart into TV, sources said. “Television is definitely on the table,” a Bannon adviser told me. A partnership with Sinclair remains a possibility. In recent days, Sinclair’s chief political analyst Boris Epshteyn has spoken with Breitbart editors about ways to form an alliance, one Breitbart staffer said. “All the Sinclair guys are super tight with Breitbart. Imagine if we got together Hannity and O’Reilly and started something?”
Meanwhile, the next phase has already begun. On Sunday, the website’s lead story was based on a Daily Mail report that said Ivanka was behind Bannon’s removal. “Trump’s daughter Ivanka pushed out Bannon because of his ‘far-right views’ clashing with her Jewish faith,” the article noted. Another piece was headlined: “6 TIMES JAVANKA’S DISPLEASURE WITH POTUS LEAKED TO PRESS.” In his feud with Kushner, Bannon may have a powerful ally: Reince Priebus, also recently departed from the White House with a quiver of grudges. Recently, according to several sources, Bannon has told friends he wants Priebus to give his account of the James Comey firing to special prosecutor Robert Mueller. According to a source close to Priebus, the former chief of staff believes that the decision was made during an early May weekend in Bedminster, where Kushner, Ivanka Trump, and Stephen Miller were with the president. Trump returned to the Oval Office on Monday, May 8 and told other aides he intended to fire Comey.
At Breitbart, Bannon has a brigade of similarly happy warriors. “We’re in a loud bar celebrating the return of our captain!” Breitbart’s Washington editor Matt Boyle told me on Friday night. Breitbart’s defense of Trump has so far helped keep the Russia scandal from gaining traction on the right. But that could swiftly change if Trump, under the influence of Kushner and Cohn, deviates too far from the positions he ran on. If that happens, said one high-level Breitbart staffer, “We’re prepared to help Paul Ryan rally votes for impeachment.” ||||| President Trump decided to dismiss Stephen K. Bannon, after weeks of White House upheaval and racial unrest. The ousted chief strategist returned to Breitbart News on Aug. 18. (Peter Stevenson,Jenny Starrs/The Washington Post)
President Trump decided to dismiss Stephen K. Bannon, after weeks of White House upheaval and racial unrest. The ousted chief strategist returned to Breitbart News on Aug. 18. (Peter Stevenson,Jenny Starrs/The Washington Post)
President Trump’s most unconventional senior adviser, Stephen K. Bannon, may have left the White House, but the political turbulence that has characterized the first seven months of Trump’s presidency doesn’t appear to be going anywhere.
The tenure and departure of Bannon, the president’s chief strategist and champion of his nationalist impulses, exposed deep fissures in the Trump-era Republican Party, within the White House and beyond.
Those differences are still harming Trump’s effectiveness as he tries to kick-start a sputtering legislative agenda at a time when relationships with Republican congressional leaders are seriously frayed — largely because of the president’s behavior, including his response to hate-fueled deadly violence in Charlottesville last weekend.
While Bannon’s ouster was the latest move by new Chief of Staff John F. Kelly to bring a greater sense of normalcy to the White House, even some of Trump’s allies question how likely that is to take hold, particularly under a president who relishes changing the national conversation with a provocative tweet — a practice Kelly has not been able to curb.
Trump — nearing the end of a working vacation at his Bedminster, N.J., golf resort — has made a habit of continuing to solicit advice from former staffers, often through late-night calls when he is no longer under the watchful eye of Kelly. Bannon also has made clear since he left Friday that he is going to use Breitbart News, the pugilistic conservative website, to try to advance his agenda from outside the White House.
The Post's Dan Balz says the firing of chief strategist Stephen K. Bannon simultaneously changes everything and nothing for the Trump administration. (Bastien Inzaurralde,Jhaan Elker/The Washington Post)
In an interview in Washington on Saturday, Bannon warned Republican leaders to enthusiastically support Trump’s priorities on taxes, trade and funding a massive border wall — or risk the wrath of the president’s base, including Breitbart, to which Bannon returned Friday as executive chairman.
“If the Republican Party on Capitol Hill gets behind the president on his plans and not theirs, it will all be sweetness and light, be one big happy family,” Bannon said.
[After Charlottesville, Republicans remain stymied over what to do about Trump]
But Bannon added with a smile that he does not expect “sweetness” anytime soon — and described the turbulent political moment in the Republican Party and the country as a necessary battle over Trump’s priorities.
“No administration in history has been so divided among itself about the direction about where it should go,” Bannon said, adding that Trump’s base is frustrated by a congressional agenda that has dovetailed more with traditional Republican priorities than the agenda Trump championed.
In a pair of tweets on Saturday, the president wished Bannon well and thanked him for his service.
“He came to the campaign during my run against Crooked Hillary Clinton — it was great!” Trump said in the first, referring to Bannon’s role during the general election.
Several hours later, Trump predicted Bannon would be “a tough and smart new voice at @BreitbartNews . . . maybe even better than ever before,” adding: “Fake News needs the competition!”
Trump and Bannon had not yet spoken by phone as of early Saturday, according to people close to both men. It was not clear who had been reaching out to whom, the people said. Bannon spent the day in Washington meeting with friends and allies, and talking with Breitbart writers and executives, according to people close to him.
Several friends and former co-workers said that they expect Bannon to use the platform to attack his political opponents, including those he has derided as “globalists” and Democrats inside the White House.
“I think Steve is going to be more effective on the outside,” said Matt Schlapp, chairman of the American Conservative Union and a longtime friend of Bannon. “On the outside, if you are well-funded and you are feared and you have a platform, you are going to be a power player. Steve has all of that in spades.”
Trump and Bannon associates also expect Bannon to continue to have Trump’s ear, as has been the case with some other fired staffers such as Corey Lewandowksi, Trump’s first campaign manager, who periodically shows up at the White House.
“With Donald Trump, once he likes you, you’re either in his inner orbit, or you’re in his outer orbit,” said Christopher Ruddy, chief executive of Newsmax Media and a member of Trump’s Mar-a-Lago Club in Palm Beach, Fla. “You never leave altogether.”
In a White House that has had competing power centers, some Trump confidants argued that Bannon’s removal was necessary to bring a more regimented system to the White House, as Kelly has sought. They argued that with Bannon, who had a reputation of trying to undermine colleagues with more establishment views, this made particular sense.
[Trump, first lady to skip Kennedy Center Honors over concerns of ‘political distraction’]
“I think it raises the morale of staffers and brings more of a sense of normalcy to the White House on a day-to-day basis,” said one Republican strategist close to the White House, who spoke on the condition of anonymity to speak more candidly. “You don’t have such an unorthodox staffer breathing down people’s necks and creating tension every day.”
“What it does not do is remove the person who’s creating the most drama in the White House, and that’s Donald Trump,” the strategist added. “He’s going to continue to do what he’s going to do.”
The coming weeks should bring no shortage of drama.
Fallout is continuing from Trump’s remarks on Charlottesville, in which he blamed “both sides” for the violence and said some “fine people” marched alongside the neo-Nazis and white supremacists protesting the removal of a Confederate statue. The investigations into the Trump campaign’s ties with Russia also continue.
And next month, Congress returns to a full set of challenges, including legislation to raise the nation’s debt ceiling. If Trump and lawmakers become paralyzed by the task, they could spark an international crisis.
Trump also wants Congress to try to resurrect health-care legislation and take up tax reform, another shared priority but one also rife with intraparty division. He is also seeking funding for his marquee campaign promise of a wall on the U.S.-Mexico border.
On most of these issues, there is no evident strategy among Republicans on either side of Pennsylvania Avenue for bridging divisions and bringing Trump and congressional Republicans together.
“The reality of it is that even if there were no issues inside the White House, you still have an underlying divide in the Republican Party about how we’ll approach some of these issues,” said former Republican National Committee chairman Michael Steele. “To me, that’s the most disheartening part of this.”
While Bannon’s influence has been evident on some Trump policies — including trade, immigration and a decision to pull out of the Paris climate accord — he was much less a presence on health care, the issue that has most come to symbolize GOP dysfunction at a time when the party controls the presidency and both chambers of Congress.
In recent weeks, Trump has grown increasingly unhappy with Senate Majority Leader Mitch McConnell (R-Ky.) and rarely mentions House Speaker Paul D. Ryan (R-Wis.) in private conversations, blaming both for his legislative troubles, according to two people who have spoken with Trump.
On Friday, a flurry of bravado-filled interviews with Bannon appeared on various websites, including one in which he said he felt as if “I’ve got my hands back on my weapons” and was prepared to “crush the opposition.”
Advisers to senior congressional Republicans were taken aback that none of the combative language was countered by the White House.
“They just sat out there,” said one Republican aide. “That told me everything about whether the White House actually cares about making clear it’s on our side.”
Other Republican aides pointed out that there were other consequential openings on the staff beyond Bannon. While Bannon has been close to the conservative House Freedom Caucus, it was former chief of staff Reince Priebus and outgoing press secretary Sean Spicer who had deep friendships in the party going back to their days at the Republican National Committee.
Ever since Priebus left, many Republican officials have found it harder to engage the White House and to feel assured that the administration “understands the language of Republicans,” as one veteran Republican operative described the dynamic.
[The Fix: Where Republican senators stand on Trump’s views]
Bannon said he sees the roiling feuds inside the West Wing and in the GOP leadership ranks as somewhat but not entirely distinct from broader national divisions.
“The tensions in the White House are slightly different than the tensions in the country. It’s still a divided country. Fifty percent of the people did not support President Trump. Most of those people do not support his policies in any way, shape or form,” Bannon said.
Bannon said both Republicans and Democrats will need to pay close attention to the anxiety among many working people in the country over economic opportunity and national identity, even as they work to settle their turf fights in Washington.
The showdown in a special Senate race in Alabama offers a harbinger of the discord facing the GOP in 2018.
In a Sept. 26 primary runoff, Sen. Luther Strange (R-Ala.), an ally of Senate GOP leaders, has been endorsed by Trump but is disliked by many right-wing leaders, including Breitbart and talk-radio hosts such as Laura Ingraham.
Strange faces Roy Moore, a former state Supreme Court justice and longtime favorite of conservatives for his hard-line stands on same-sex marriage and allowing the Ten Commandants to be displayed in public.
Rather than rally behind Strange, several conservative leaders said privately Saturday that they expect their supporters to get behind Moore as a way of sending a signal to Trump that while they are with him philosophically, they will not follow his decisions blindly ahead of the 2018 mid-term elections.
Rep. Mo Brooks (R-Ala.), who finished third in last week’s Senate vote and did not make the runoff, acknowledged that many conservatives are urging him to get behind Moore to stop Strange and rattle GOP leaders.
“Have I made a decision? No, I have not,” Brooks said coyly in an interview. “But it looks like the establishment and Washington swamp have taken control of the White House with Bannon’s departure and with Luther Strange.”
Wagner reported from Bedminster, N.J. Paige Winfield Cunningham contributed to this report. ||||| Mr. Bannon fed Mr. Trump’s paranoid streak and shared the president’s penchant for believing in conspiracies. He viewed not just intelligence agencies but most of government as stocked with a devious bureaucratic underbelly, the “deep state.” Mr. Trump, who has never worked in government, eagerly adopted that view.
Mr. Bannon was notorious for maintaining his own, shadowy presence within the White House. He would frequently skip meetings where policy was discussed, injecting his views into the process in other ways, according to two administration officials. He did not use a computer, preferring to have paper printed and handed to his assistant to stay outside the formal decision-making process.
Mr. Bannon favored a culture similar to the one Mr. Trump brought with him from the business world to the White House — a flat structure with blurred lines of responsibility and competing power centers. And early on Mr. Bannon benefited from that structure, sitting at the top, free to slip unvetted materials to the president without a gatekeeper to get past.
“Theoretically, a more coherent staff should produce a more coherent policy,” said David Axelrod, who was President Barack Obama’s senior adviser and the person in a comparable role to Mr. Bannon in the White House. “But that presupposes a president who embraces the process and the policy.”
With little process to speak of, tensions over policy swelled. Ideological differences devolved into caustic personality clashes. Perhaps nowhere was the mutual disgust thicker than between Mr. Bannon and Mr. Trump’s daughter and son-in-law.
Mr. Bannon openly complained to White House colleagues that he resented how Ms. Trump would try to undo some of the major policy initiatives that he and Mr. Trump agreed were important to the president’s economic nationalist agenda, like withdrawing from the Paris climate accords. In this sense, he was relieved when Mr. Kelly took over and put in place a structure that kept other aides from freelancing.
“Those days are over when Ivanka can run in and lay her head on the desk and cry,” he told multiple people. | Steve Bannon had planned an orderly departure from the White House, but it was scuppered by the violence in Charlottesville, insiders say. Sources tell the New York Times that new White House chief of staff John Kelly told the White House strategist in July that he would have to leave and they agreed on a date in mid-August, marking a year since Bannon joined the Trump team. But after Charlottesville, Bannon sought to push back the Aug. 14 departure date and stay on until at least Labor Day, worried that it would look like his departure was a response to events, the insiders say. He ended up leaving within days anyway after contradicting Trump's foreign policy in an interview with a liberal magazine. The insiders say that Bannon's departure was hastened by the "mutual disgust" between himself and the couple he called "Javanka" behind their backs: Jared Kushner and Ivanka Trump. Bannon, who has now returned to Breitbart News, tells the Washington Post that he expects the turbulence in the Republican Party and the White House to continue. "No administration in history has been so divided among itself about the direction about where it should go," he says. According to Vanity Fair, Bannon now plans to use Breitbart to continue his feud with Kushner, Ivanka Trump, and other administration figures including National Security Adviser HR McMaster. (Here's what President Trump had to say about Bannon's departure.) |
Peer review is well established as a mechanism for assuring the quality, credibility, and acceptability of individual and institutional work products. This assurance is accomplished by having the products undergo an objective, critical review by independent reviewers. Peer review has long been used by academia, professional organizations, industry, and government. Within EPA, peer review has taken many different forms, depending upon the nature of the work product, the relevant statutory requirements, and office-specific practices and needs. In keeping with scientific custom and/or congressional mandates, several offices within EPA have used peer review for many years to enhance the quality of science within the agency. In response to a panel of outside academicians’ recommendations in 1992, EPA issued a policy statement in 1993 calling for peer review of the major scientific and technical work products used to support the agency’s rulemaking and other decisions. However, the Congress, GAO, and others subsequently raised concerns that the policy was not being implemented consistently across the agency. In response to these concerns, in 1994 EPA reaffirmed the central role that peer review plays in ensuring that the agency’s decisions are based on sound science and credible data and revised its 1993 policy. The new policy, while retaining the essence of the prior one, was intended to expand and improve the use of peer review throughout EPA. The 1994 policy continued to stress that major products should normally be peer reviewed, but it also recognized that statutory and court-ordered deadlines, resource limitations, and other constraints might limit or even preclude the use of peer review. The policy applied to major work products that are primarily scientific or technical in nature and that may contribute to the basis for policy or regulatory decisions. In contrast, other products used in decision-making are not covered by the policy, nor are the ultimate decisions themselves. While peer review can take place at several different points along a product’s development, such as during the planning stage, it should be applied to a relatively well-developed product. The 1994 policy also clarified that peer review is not the same thing as the peer input, stakeholders’ involvement, or public comment—mechanisms used by EPA to develop products, to obtain the views of interested and affected parties, and/or to build consensus among the regulated community. While each of these mechanisms serves a useful purpose, the policy points out that they are not a substitute for peer review because they do not necessarily solicit the same unbiased, expert views that are obtained through peer review. EPA’s policy assigned responsibility to each Assistant and Regional Administrator to develop standard operating procedures and to ensure their use. To help facilitate consistent EPA-wide implementation, EPA’s Science Policy Council—chaired by EPA’s Deputy Administrator—was directed to help the offices and regions develop their procedures and identify products that should be peer reviewed. The Council was also given the responsibility for assessing agencywide progress and developing any needed changes to the policy. However, the ultimate responsibility for implementing the policy was placed with the Assistant and Regional Administrators. We found that—2 years after EPA established its peer review policy— implementation was still uneven. We concluded that EPA’s uneven implementation was primarily due to (1) inadequate accountability and oversight to ensure that all products are properly peer reviewed by program and regional offices and (2) confusion among agency staff and management about what peer review is, what its significance and benefits are, and when and how it should be conducted. According to the Executive Director of the Science Policy Council, the unevenness could be attributed to a number of factors. First, while some offices within EPA—such as the Office of Research and Development (ORD)—have historically used peer review for many years, other program offices and regions have had little prior experience. In addition, the Director and other EPA officials told us that statutory and court-ordered deadlines, budget constraints, and problems in finding and obtaining qualified, independent peer reviewers also contributed to the problem. EPA’s oversight primarily consisted of a two-part reporting scheme that called for each office and region to annually list (1) the candidate products nominated for peer review during the upcoming year and (2) the status of the products previously nominated. If a candidate product was no longer scheduled for peer review, the list had to note this and explain why peer review was no longer planned. Although we found this to be an adequate oversight tool for tracking the status of previously nominated products, we pointed out that it does not provide upper-level managers with sufficient information to ensure that all products warranting peer review have been identified. This fact, together with the misperceptions about what peer review is and the deadlines and budget constraints that project officers often operate under, has meant that the peer review program to date has largely been one of self-identification, allowing some important work products to go unlisted. According to the Science Policy Council, reviewing officials would be much better positioned to determine if the peer review policy and procedures are being properly and consistently implemented if, instead, EPA’s list contained all major products along with what peer review is planned and, if none, the reasons why not. We noted that the need for more comprehensive oversight is especially important given the policy’s wide latitude in allowing peer review to be forgone in cases facing time and/or resource constraints. As explained by the Executive Director of EPA’s Science Policy Council, because so much of the work that EPA performs is in response to either statutory or court-ordered mandates and the agency frequently faces budget uncertainties or limitations, an office under pressure might argue for nearly any given product that peer review is a luxury the office cannot afford in the circumstances. However, as the Executive Director of the Science Advisory Board (SAB)told us, not conducting peer review can sometimes be more costly to the agency in terms of time and resources. He told us of a recent Office of Solid Waste rulemaking concerning a new methodology for delisting hazardous wastes in which the Office’s failure to have the methodology appropriately peer reviewed resulted in important omissions, errors, and flawed approaches in the methodology; these problems will now take from 1 to 2 years to correct. The SAB also noted that further peer review of the individual elements of the proposed methodology is essential before the scientific basis for this rulemaking can be established. Although EPA’s policy and procedures provide substantial information about what peer review entails, we found that some EPA staff and managers had misperceptions about what peer review is, what its significance and benefits are, and when and how it should be conducted. Several cases we reviewed illustrate this lack of understanding about what peer review entails. Officials from EPA’s Office of Mobile Sources (OMS) told the House Commerce Committee in August 1995 that they had not had any version of the mobile model peer reviewed. Subsequently, in April 1996, OMS officials told us they recognize that external peer review is needed and that EPA planned to have the next iteration of the model so reviewed. We found similar misunderstandings in several other cases we reviewed. EPA regional officials who produced a technical product that assessed the environmental impacts of tributyl tin told us that the contractor-prepared product had been peer reviewed. While we found that the draft product did receive some internal review by EPA staff and external review by contributing authors, stakeholders, and the public, it was not reviewed by experts independent of the product itself or of its potential regulatory ramifications. When we pointed out that—according to EPA’s policy and the region’s own peer review procedures—these reviews are not a substitute for peer review, the project director said that she was not aware of these requirements. In two other cases we reviewed, there were misunderstandings about the components of a product that should be peer reviewed. For example, in the Great Waters study—an assessment of the impact of atmospheric pollutants in significant water bodies—the scientific data were subjected to external peer review, but the study’s conclusions that were based on these data were not. Similarly, in the reassessment of dioxin—an examination of the health risks posed by dioxin—the final chapter summarizing and characterizing dioxin’s risks was not as thoroughly peer reviewed. In both cases, the project officers did not have the conclusions peer reviewed because they believed that the development of conclusions is an inherently governmental function that should be performed exclusively by EPA staff. However, some EPA officials with expertise in conducting peer reviews disagreed, maintaining that it is important to have peer reviewers comment on whether or not EPA has properly interpreted the results of the underlying scientific and technical data. EPA’s quality assurance requirements also state that conclusions should be peer reviewed. During our review, we found that EPA had recently taken a number of steps to improve the peer review process. Although we believed that these steps should prove helpful, we concluded that they did not fully address the previously-discussed underlying problems and made some recommendations for improvement. EPA agreed with our findings and recommendations and has recently undertaken steps to implement them. While it is too early to gauge the effectiveness of these efforts, we are encouraged by the attention peer review is receiving by the agency’s upper-level management. Near the completion of our review, in June 1996, EPA’s Deputy Administrator directed the Science Policy Council’s Peer Review Advisory Group and ORD’s National Center for Environmental Research and Quality Assurance to develop an annual peer review self-assessment and verification process to be conducted by each office and region. The self-assessment was to include information on each peer review completed during the prior year as well as feedback on the effectiveness of the overall process. The verification would consist of the signature of headquarters, laboratory, or regional directors to certify that the peer reviews were conducted in accordance with the agency’s policy and procedures. If the peer review did not fully conform to the policy, the division director or the line manager must explain significant variances and actions needed to limit future significant departures from the policy. The self-assessments and verifications were to be submitted and reviewed by the Peer Review Advisory Group to aid in its oversight responsibilities. According to the Deputy Administrator, this expanded assessment and verification process would help build accountability and demonstrate EPA’s commitment to the independent review of the scientific analyses underlying the agency’s decisions to protect public health and the environment. During our review, we also found a number of efforts under way within individual offices and regions to improve their implementation of peer review. For example, the Office of Water drafted additional guidance to further clarify the need for, use of, and ways to conduct peer review. The Office of Solid Waste and Emergency Response formed a team to help strengthen the office’s implementation of peer review by identifying ways to facilitate good peer review and addressing barriers to its successful use. Additionally, EPA’s Region 10 formed a Peer Review Group with the responsibility for overseeing the region’s reviews. We concluded that the above efforts should help address the problems we found. However, we also concluded that the efforts aimed at improving the oversight of peer review fell short by not ensuring that all relevant products had been considered for peer review and did not require documenting the reasons why products were not selected. Similarly, we noted that the efforts aimed at better informing staff about the benefits and use of peer review would be more effective if they were done consistently throughout the agency. EPA agreed with our findings and conclusions and has recently undertaken a number of steps to implement our recommendations. On November 5, 1996, the Deputy Administrator asked ORD’s Assistant Administrator, in consultation with the other Assistant Administrators, to develop proposals to strengthen the peer review process. In response, ORD’s Assistant Administrator proposed a three-pronged approach consisting of (1) audits of a select number of work products to determine how well the peer review policy was followed; (2) a series of interviews with office and regional staff involved with peer review to determine the processes used to implement the policy; and (3) training to educate and provide help to individuals to improve the implementation of the peer review policy. Significantly, the Deputy Administrator has echoed our message that EPA needs to improve its oversight to ensure that all appropriate products are peer reviewed. In a January 14, 1997, memorandum to the Assistant and Regional Administrators, the Deputy stated, “I want you to ensure that your lists of candidates for peer review are complete.” To help accomplish this goal, each organization is directed to use, among other things, EPA’s regulatory agenda and budget planning documents to help identify potential candidates for peer review. While we agree that this should prove to be a useful tool, we continue to encourage EPA to expand its existing candidate list to include all major work products, along with explanations of why individual products are not nominated for peer review. An all-inclusive list such as this will be extremely useful to those overseeing the peer review process to determine whether or not all products have been appropriately considered for peer review. In summary, peer review is critical for improving the quality of scientific and technical products and for enhancing the credibility and acceptability of EPA’s decisions that are based on these products. We are encouraged by the renewed attention EPA is giving to improving the peer review process. Although it is too early for us to gauge the success of these efforts, the involvement of the agency’s upper-level management should go a long way to ensure that the problems we identified are resolved. Mr. Chairman, this concludes my prepared statement. I will be happy to respond to your questions or the questions of Subcommittee members. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | GAO discussed its recent report on the Environmental Protection Agency's (EPA) implementation of its peer review policy, focusing on EPA's: (1) progress in implementing its peer review policy; and (2) efforts to improve the peer review process. GAO noted that: (1) despite some recent progress, peer review continues to be implemented unevenly; (2) although GAO found some cases in which EPA's peer review policy was properly followed, it also found cases in which key aspects of the policy were not followed or in which peer review was not conducted at all; (3) GAO believes that two of the primary reasons for this uneven implementation are: (a) inadequate accountability and oversight to ensure that all relevant products are properly peer reviewed; and (b) confusion among EPA's staff and management about what peer review is, its importance and benefits, and how and when it should be conducted; (4) EPA officials readily acknowledge this uneven implementation and, during the course of GAO's work, had a number of efforts under way to improve the peer review process; (5) although GAO found these efforts to be steps in the right direction, it concluded that EPA was not addressing the underlying problems that GAO had identified; (6) accordingly, GAO recommended that EPA ensure that: (a) upper-level managers have the information they need to know whether or not all relevant products have been considered for peer review; and (b) staff and managers are educated about the need for and benefits of peer review and their specific responsibilities in implementing policy; (7) EPA agreed with GAO's recommendations and has several efforts under way to implement them; (8) for example, EPA plans to initiate a peer review training program for its managers and staff in June 1997; and (9) while it is still too early to be certain if these efforts will be fully successful, GAO is encouraged by the high-level attention being paid to this very important process. |
Medicaid is the third largest social program in the federal budget and is also one of the largest components of state budgets. Although it is one federal program, Medicaid consists of 56 distinct state-level programs—one for each state, District of Columbia, Puerto Rico, and each U.S. territory. Each state has a designated Medicaid agency that administers its program under broad federal guidelines. The federal government matches state Medicaid spending for medical assistance according to a formula based on each state’s per capita income. The federal share can range from 50 cents to 83 cents of each Medicaid dollar spent. HCFA administers the Medicaid program at the federal level. In accordance with the Medicaid statute, it sets broad guidelines for the states, but within them, each state establishes its own eligibility standards; determines the type, amount, duration, and scope of covered services; sets payment rates; oversees the integrity of its program; and develops its administrative structure. States are required to describe the nature and scope of their program in a comprehensive written plan submitted to HCFA—with federal funding for state Medicaid services contingent on HCFA’s approval of the plan. HCFA is responsible for ensuring that state Medicaid programs meet all federal requirements. In addition to Medicaid, HCFA also has responsibility for administering Medicare, a federal health insurance program for certain disabled persons and those 65 years and older. While Medicaid and Medicare have different structures and governance, some low-income beneficiaries and many providers participate in both programs. There are also—in 47 states and the District of Columbia—separate MFCUs that are responsible for investigating and prosecuting Medicaid provider fraud, patient abuse, and financial fraud. In 1999, MFCUs received authority to investigate cases involving Medicare fraud as well. Most MFCUs are part of the state Attorney General’s office, and most prosecute the cases they investigate. MFCUs that have been federally certified for more than 3 years receive 75 cents in federal funding for every dollar they spend, up to a limit established by federal regulations. In addition to state Medicaid agencies and MFCUs, other state and federal agencies assist in dealing with Medicaid improper payments. Because of their responsibilities to ensure sound fiscal management in their states, state auditors or state inspectors general may become involved in Medicaid payment safeguard activities through efforts such as testing payment system controls or investigating possible causes of mispayment. At the federal level, the Federal Bureau of Investigation (FBI) and the OIG investigate, and U.S. Attorneys prosecute, certain Medicaid fraud cases, such as those that involve multiple states or also involve fraud against other health care programs. Funding for these agencies to pursue fraud and abuse in federal health care programs is available from the Health Care Fraud and Abuse Control Program (HCFAC). Established in 1996 by Section 201 of the Health Insurance Portability and Accountability Act (HIPAA), it funds, consolidates, and strengthens federal fraud control efforts under the Department of Justice (DOJ) and HHS. This fund provided $154.3 million in fiscal year 2000 to the OIG and DOJ. Separately, the FBI received an additional $76 million in HIPAA-specified funding for fiscal year 2000. Medicare has been the major focus of this effort, but Medicaid has also benefited. In its joint report with DOJ on the HCFAC fund, HHS reported returning nearly $45 million dollars to Medicaid as a result of these fraud control activities for fiscal years 1997 through 1999. With state and federal Medicaid payments projected to total $221.6 billion this fiscal year, even a small percentage loss due to improper payments represents a significant loss to taxpayers. The magnitude of improper payments throughout Medicaid is unknown, although a few states have attempted to determine the level by measuring the accuracy of their program’s payments. An even more difficult portion of improper payments to identify are those attributable to intentional fraud—recent cases in California and other states provide examples of losses due to fraudulent activities. There are no reliable estimates of the extent of improper payments throughout the Medicaid program. However, at least three states have conducted studies to try to measure their program’s payment accuracy rates and pinpoint where payment vulnerability occurs, with varied success. Illinois, in 1998, reported an estimated payment accuracy rate of 95.3 percent, with a margin of error of +/- 2.3 percentage points, of total dollars paid. The estimate was based on a sample of individual paid claims, for which the state reviewed medical records and interviewed patients to verify that services were rendered and medically necessary. As a result of this audit, the state identified key areas of weakness and targeted several areas needing improvement. For example, because the Illinois payment accuracy review indicated that nearly one-third of payments to nonemergency transportation providers were in error, the Illinois Medicaid program has taken a number of steps to improve the accuracy of payments to this provider type. Texas, also in 1998, reported an estimated payment accuracy rate of 89.5 percent in the acute medical care fee-for-service portion of the program. However, in making that estimate, reviewers had trouble locating many patients and records due to statutorily imposed time constraints. Further work led the state, in 1999, to revise the estimate to between 93.2 and 94 percent. In developing the estimate, the state identified ways to reduce improper payments through expanded use of computerized fraud detection tools, such as matching Medicaid eligibility records with vital statistics databases to avoid payments for deceased beneficiaries. In January 2001, Texas reported that a more recent study estimated a payment accuracy rate of 92.8 percent in its acute medical care fee-for-service payments. Kansas, in 2000, reported an estimated payment accuracy rate of 76 percent with a margin of error of +/- 9 percentage points. The estimate was based on a sample of individual paid claims, as in Illinois. The payment accuracy study recommended increased provider and consumer education, as well as improvements to computerized payment systems. In addition, Kansas officials undertook focused reviews of certain types of claims that were identified as vulnerable to abuse. In their payment accuracy studies, these states commonly identified errors such as missing or insufficient documentation to show whether the claim was claims for treatments or services that were not medically necessary; claims that should have been coded for a lower reimbursement amount; and claims for treatments or services that the program did not cover. Because payment accuracy studies can provide useful guidance toward developing cost-effective measures to reduce losses, HCFA has sought HCFAC funding for grants to states for such efforts. HCFA also has established a workgroup to develop guiding principles, definitions, and reporting protocols for payment accuracy studies. HCFA and its workgroup of state officials are also trying to assess whether, given the many differences among the various Medicaid programs, a common methodology can be developed that would allow valid comparison of error rates across states. State payment accuracy studies may not fully identify improper payments that might be related to fraud, due primarily to fraud’s covert nature. Losses due to fraudulent billing and other related practices are difficult to quantify. However, these amounts can be significant, as was demonstrated recently in California’s program, in which millions of dollars were paid to numerous fraudulent providers. Since July 1999, a state-federal task force targeting questionable pharmaceutical and durable medical equipment suppliers for improper billing has charged 115 providers, wholesalers, and suppliers in cases involving about $58 million in fraud. At least 69 individuals have been convicted and paid about $20 million in restitution. An additional 300 entities are being investigated for suspected fraud that could exceed $250 million. In one case, a family-run equipment company defrauded the program out of more than $9 million by submitting thousands of claims for equipment and supplies that were never delivered to patients. Investigators also found the following. “Bump and run” schemes in which individuals bill for a few months for services that are not rendered, stop billing before being detected, and then start again under a new name. Wholesalers who gave pharmacies and suppliers false invoices to substantiate false claims. Use of “marketers” who recruit and pay beneficiaries $100 or more to lend their Medicaid identification cards for use in improper billing. Use of beneficiary identification numbers stolen from a hospital to bill for services not provided. Use of identification from providers who had retired or moved out of the state. Purchase of an established business in order to fraudulently bill under its name. Administrative weaknesses in the California Medicaid program made these activities easier to accomplish. For example, the program was issuing new billing numbers to individuals with demonstrated histories of current or past questionable billing practices. The program allowed providers to have multiple numbers, and applicants did not have to disclose past involvement in the program or any ongoing audits. As a result, in some cases, individuals who had past questionable billings applied for a new provider number and were reinstated with full billing privileges. In addition, applicants for a billing number for a business that needed a license—such as a pharmacy— did not have to disclose that actual owners were not the licensed individuals. This allowed unlicensed individuals to pay medical professionals for the use of their licenses to obtain a provider number. California has taken steps to try to close such loopholes. In addition to single-state schemes, fraudulent activities sometimes involve large-scale multistate schemes. One case led to a $486 million civil settlement in early 2000—one of the largest health care settlements ever. It followed a 5-year investigation of a dialysis firm billing Medicare and several state Medicaid programs for intradialytic parenteral nutrition that was not necessary or not provided in the quantity claimed. The company had an ownership interest in a laboratory that also double-billed for unnecessary tests and paid kickbacks to nephrologists and clinics that used the laboratory. In another case, a national laboratory headquartered in Michigan was ordered to pay $6.8 million in a multistate settlement for billing Medicare and five Medicaid programs for bogus medical tests. Improper billing schemes such as the ones discussed above are the principal types of fraud cases developed by MFCUs, according to MFCU directors responding to our survey. Improper billing includes “upcoding,” in which the provider misrepresents treatment provided and bills for a more costly procedure; “ghost” or “phantom” billing, in which a provider bills for services never provided; and delivering more services than are either necessary or appropriate for the patient’s diagnosis. However, other types of fraud occur, including improper business practices—such as kickbacks for steering services to a provider—or misrepresentation of qualifications, such as an individual falsely claiming to be a physician. MFCU directors have found a wide variety of providers involved in fraud, including physicians, dentists, pharmacies, durable medical equipment providers, and transportation providers. Beneficiaries also engage in fraud, either by misrepresenting assets to become eligible for the program, lending or selling their identification numbers for another’s use, or obtaining products such as pharmaceuticals for resale. Fraud is not merely a financial concern—it can also pose a risk to the physical health of beneficiaries. For example, providers have drawn blood unnecessarily in order to better substantiate billing for tests that were not performed, and dentists have conducted extensive unnecessary dental work on beneficiaries in order to bill the program. The amount of resources and effort that state Medicaid programs devote to protecting the integrity of their programs varies. Some states have focused their efforts on preventing improper payments by strengthening their prepayment claims checking. States’ abilities to detect improper payments also vary, in part because some lack sophisticated information technology that can help them analyze and track instances of inappropriate billing. Strong leadership in certain states is resulting in stricter laws and restructured operations to better ensure that the Medicaid program pays claims appropriately. Resources for addressing improper Medicaid payments are generally modest. In our survey, 25 state Medicaid agencies reported spending one- tenth of 1 percent or less of program expenditures on these efforts. Others, such as California, spend about one-fourth of 1 percent of program expenditures on preventing and detecting improper payments. However, this is not unique to Medicaid. As we recently reported, the Medicare program devotes little more than one-fourth of 1 percent of its program expenditures to safeguarding payments. As a result, we recommended that the Congress increase funding for these important activities. All states forgo some of the federal funds available to help their MFCUs investigate and prosecute fraud. MFCUs, once federally certified and in operation for 3 years, are eligible for 75 cents in federal funds for every dollar they spend, up to a maximum federal contribution of the greater of $125,000 per quarter or one-fourth of 1 percent of the state Medicaid program’s total expenditures in the previous quarter. However, only 10 percent of MFCUs receive enough state funding to obtain even half of the allowed federal match. States ranged from having enough state funding to obtain less than 7 percent to having up to 86 percent of their allowed federal match. Many Medicaid state agency fraud control and MFCU officials reported gaps in staff, staff training, or technology acquisition. Many state officials said that they wanted to increase their workforce by hiring staff with specific skills, such as auditing, computer analysis, and clinical knowledge, and adding the technology to analyze large amounts of claims data. For example, in our survey, only 14 of 53 state agencies reported that they have statisticians to help collect, organize, and analyze data to spot improper billing practices. Further, although information technology to store and analyze large amounts of data easily has improved significantly in recent years, some states reported using very old information technology to assess program billing. Four state Medicaid agencies reported using software that is at least 15 years old to assess claims before payment, and three state Medicaid agencies reported using software at least that old to analyze claims after payment to ensure the billings were proper. While about half of the state agencies and a third of MFCUs reported that their program integrity unit budgets were steady or declining in the previous 3 years, we did learn that other states showed a more promising trend. In our survey, 8 state Medicaid agencies and 4 MFCUs reported that their budgets for program integrity activities had increased significantly, while another 15 state agencies and 27 MFCUs reported that their budgets had increased somewhat. As a result, they reported that they were able to hire additional staff and increase program safeguards. For example, Connecticut’s increased funding allowed the state Medicaid agency to hire additional staff to increase audits and site visits to providers. Georgia’s state Medicaid agency also received increased funding, which allowed it to increase staffing levels and to make a number of additional improvements, such as opening an office to cover the southern part of the state. Preventing improper payments can be a cost-effective way to protect program dollars. Prevention can help avoid what is known as “pay and chase” in which efforts must be made to detect and attempt to recover inappropriate payments after they have been made. Such postpayment efforts are often costly and typically recover only a small fraction of the identified misspent funds, although they can identify parts of the program where controls, such as on payments, may need strengthening. States use a variety of preventive approaches—such as prepayment computer “edits,” manual reviews, provider education, and thoroughly checking the credentials of individuals applying to be program providers—and the scope and effectiveness of these activities varies among the states. All 41 of the state Medicaid agencies responding to our survey about prepayment claims review reported that they use such reviews to varying degrees. These include automated computer “edits” and manual reviews to help ensure payment accuracy. Typically, their edits check the mathematical accuracy of claims, the correct use of payment codes, and patients’ Medicaid eligibility. Such reviews help ensure that the services listed on the claim are covered, medically necessary, and paid in accordance with state and federal requirements. For example, an edit can be used to deny a claim for obstetrical care for a male beneficiary. Some states have thousands of such edits in their payment systems that identify duplicate claims, invalid dates, missing codes, or claims for services that conflict with previous care provided to the beneficiary. Although widely used, recent experiences from several states that are aggressively working to detect overpayments suggest that their existing prepayment edits have not been catching various types of improper payments. A few states have hired a private contractor to help analyze claims data to uncover overpayments. For example, with the aid of this contractor, Florida learned that it was paying some pharmacies 10 times more than it should for asthma inhalant because its edit did not stop claims listing the amount in unit doses rather than in grams, as required. Following this contractor’s overpayment review, Kentucky made edit changes it estimates will prevent $2 million in improper payments. This same contractor assisted Washington in making edit and other policy changes that are anticipated to save $4 million. Investigations in other states have also identified the need for new and revised edits. Some MFCU officials reported that they had advised their state agencies to strengthen certain edits based on the cases they had investigated. For example, the North Carolina MFCU suggested an edit to its state agency to identify and bundle laboratory services that should not have been billed separately. Also, the Louisiana MFCU reported that it had recommended that its Medicaid agency develop an edit to prevent duplicate payment of children’s medical screenings and physician visits and to ensure that physicians and certified nurse practitioners working together do not send in duplicate claims for the same services. Manual reviews before claims are paid can further help prevent improper payments, but they are resource-intensive, thus limiting the number of such reviews that can be done cost effectively. Manual reviews involve a trained specialist—such as a nurse—examining documentation submitted with a claim and possibly requesting additional information from providers, beneficiaries, and other related parties. Because of the cost and time involved, manual prepayment review is often targeted to certain providers. For example, if a provider’s claims pattern is substantially different from his or her peers, or if there is a sudden increase in claims volume for a given provider, or if there is substantial evidence of abuse or wrongdoing, payment may be withheld until a reviewer determines whether the aberrations or increases are appropriate and can be substantiated. Table 1 shows examples of prepayment reviews currently being used by some states. Because billing mistakes can be inadvertent, educating providers on how to comply with program rules and file claims correctly can often prevent errors. For example, in our survey, almost all state Medicaid agencies reported initiating meetings with providers, usually to discuss coding and policy changes. Seventeen state Medicaid agencies reported that their staff met with providers to discuss safeguarding the confidentiality of provider and beneficiary Medicaid numbers. In addition, 17 state Medicaid programs alerted providers to prevalent fraud schemes. State Medicaid agencies also reported conveying information on proper billing procedures to providers through a variety of other means, such as letters, bulletins, Internet sites, and professional meetings. Some states use more extensive provider enrollment measures to help prevent dishonest providers from entering the Medicaid program and to ensure better control over provider billing numbers. While all states collect some basic information on providers, states have considerable latitude in how they structure their provider enrollment processes. In addition, states are required to check if those providers who should be licensed are licensed and whether the provider has been excluded from participating in other federal health programs. Checking a provider’s criminal record and business site has been found to be important by states such as Florida to ensure that providers entering the program are legitimate. Nine of the states responding to our survey reported having a provider enrollment process that included all four of these checks—licensure, excluded provider status, criminal record, and business location verification—in their provider enrollment processes. Table 2 provides examples of these activities. Most Medicaid agencies reported checking whether applicants whose practice requires licensure had a valid license and whether they had been excluded from participating in other federal health programs. However, less than half of the states responding to our survey reported checking whether applicants have criminal records. While conducting such checks on a targeted basis might be useful in helping to protect the program, they can be time-consuming and difficult to perform, according to states that have attempted them. This is due in part to often inaccurate and incomplete statewide databases containing records on criminal convictions. Nineteen of 52 state Medicaid programs reported that they conducted site visits to determine if an applicant had a bona fide operation. Of those that do conduct site visits, most limit them to particular types of providers they believe have a greater likelihood of abusing the program. For example, Kansas Medicaid officials reported that, based on a risk analysis, there is a greater risk that durable medical equipment suppliers are not legitimate providers and, therefore, the Medicaid program conducted site visits of these applicants. Many states allow providers, once enrolled, to bill the program indefinitely without updating information about their status. Poor control over provider billing numbers can make Medicaid programs more vulnerable to improper payment. In our survey, 26 states reported allowing providers to continue to bill indefinitely while other states had an enrollment time limit, which often varied by provider type. However, 33 states reported that they cancel inactive billing numbers—generally for providers who have not billed the program for more than 1 to 3 years. Such efforts can be important, as questionable providers have been known to keep multiple billing numbers “in reserve” in case their primary billing number is suspended. In California, some individuals falsely billed the Medicaid program using the numbers of retired practitioners. Just as states are uneven in their efforts to prevent improper payments, they also vary in their ability to detect improperly paid claims. Because prepayment reviews cannot catch all erroneous claims, Medicaid programs must have systems in place to retrospectively review paid claims. While some states are using software from the early 1980s to analyze paid claims, other states—such as Texas and Washington—are implementing state-of- the-art systems to improve their ability to detect and investigate potential improper payments. Each Medicaid state agency is required to have an automated claims processing and retrieval system that can be used to detect postpayment errors. These automated claims processing systems, known as Medicaid Management Information Systems (MMIS), contain a Surveillance and Utilization Review Subsystem (SURS) that state agency officials can use to identify providers with aberrant billing patterns. For example, these might include providers with a large increase in Medicaid activity or with billing patterns that are significantly different from their peers and that result in enhanced reimbursement. Almost all states reported conducting focused reviews or investigations when a provider’s billing was aberrant to determine if any improper payments had been made. State Medicaid officials told us that when their state Medicaid agency discovers that improper payments have been made, it takes action to recover the improper payment, and, if warranted, refers the provider to its state MFCU for possible criminal investigation and prosecution. Providers who have been identified as having significant billing problems generally receive continued scrutiny if they remain in the program. The systems used to uncover such aberrant billing—MMIS and SURS— were developed in the early 1980s when computer algorithms to identify potentially inappropriate claims were less sophisticated and analysis required more programming skill. Newer systems allow staff to use desktop computers to directly query large databases of claim, provider, and beneficiary information, without requiring the assistance of data processing professionals. Several state officials reported that buying or leasing these upgraded computer systems and hiring staff skilled in their use would be their top priority if they had more funding. Other states are already purchasing or leasing such systems, as the following examples illustrate. Texas is using private contractors to design, develop, install, and train staff to use a state-of-the-art system intended to integrate detection and investigation capabilities. It is intended to allow the state to uncover potentially problematic payment patterns that old SURS profiling methodologies would have missed. It also includes a “neural network” that is intended to “learn” from the data it analyzes and adjust its algorithms to identify previously overlooked aberrant payment patterns. The system is further enhanced with modules designed to help develop cases for prosecution. The first 2 years of the project cost Texas $5.8 million, but according to state Medicaid officials, Texas had already collected $2.2 million in overpayments in the system’s first year of operation. Kentucky has hired a private contractor to use an advanced computer system to analyze claims payment data. It is paying that contractor through contingency fees based on overpayment collections related to these efforts. Using claims data from January 1995 through June 1998, the contractor identified $137 million in overpayments, of which the state has collected between $4 and $5 million. That compares to previous recovery efforts by the state that, on average, netted about $75,000 a year. Under its new Payment Integrity Program, Washington is using a private contractor to design, develop, install, and train staff to analyze data on an advanced computer system. The system improves access to data and includes fraud and abuse identification software with prepackaged algorithms to analyze the data and identify overpayments, as well as develop leads that would need further investigation. It also allows agency staff to develop algorithms and perform their own online reviews. Since the program started in June 1999, the contractor and state agency staff have identified overpayments totaling more than $2.95 million. Some states have developed detection strategies that combine the use of advanced technology with special investigative protocols. For example, New Jersey conducted special audits of transportation services, cross- matching data on transportation claims to beneficiary medical appointments, and sometimes contacting providers to confirm that the beneficiary actually arrived and was treated. Also, using billing trend reports, New Jersey audited pharmacies with abnormally large numbers of claims for a newly covered high-priced drug, and then audited the pharmacies’ purchases from wholesalers, thus discovering that these pharmacies were billing for a larger amount of this drug than had been shipped to them. Beneficiaries can also play a role in helping state Medicaid agencies detect improper payments. Forty-two states reported having hotlines that beneficiaries could use to report suspected improprieties. Fourteen states reported alerting beneficiaries to certain types of fraudulent schemes. Twenty-seven reported taking other types of actions. For example, some states commented that they mail explanation-of-benefit statements to beneficiaries to increase awareness of the services being billed in their names, so that if beneficiaries are not receiving billed services, they will be able to inform the state. State Medicaid agencies are primarily responsible for conducting program integrity activities, but they share this responsibility with other agencies. For example, they are required to refer potential fraud cases to the MFCUs for investigation and prosecution. Cases that may involve improper billing of Medicare or private insurers as well as Medicaid may also require investigation by the OIG or the FBI, and may involve prosecution by DOJ. In addition, other state agencies, such as those responsible for licensure, can become involved in an investigative effort. Federal regulations require Medicaid agencies and MFCUs to have an agreement to cooperate; however, the actual level of cooperation between state Medicaid agencies and MFCUs varies. State Medicaid agencies are required to refer suspected fraud cases to MFCUs for investigation and possible prosecution, provide needed records to the MFCUs, and enter into a Memorandum of Understanding establishing procedures for sharing information and referring cases. In our survey, MFCUs generally reported that about one-third of the cases that they open are referred by their state Medicaid agency. The most common criterion reported by state agencies for referring cases to MFCUs was a belief of an intent to commit an impropriety on the part of a provider. The number of cases state agencies reported referring in their previous fiscal year varied substantially. This is not surprising because Medicaid agencies differ in size, organization, scope of services, and beneficiary eligibility requirements. They also operate in different states, each of which has its own legal system and business climate, differences that can affect the number and quality of fraud referrals made by the state agency. In addition to differences in referral patterns, the reported level of interaction between states’ Medicaid agencies and MFCUs also varied. For example, meetings between the two organizations to discuss pending cases are important for preventing agency actions that could compromise a fraud unit investigation or for alerting MFCU officials to cases the state agency is developing. Most state Medicaid agencies reported having joint meetings at least six times a year; however, eight states reported that they conduct such meetings only one to three times each year. New Jersey is a state where the Medicaid agency and MFCU have worked together to further each agency’s efforts through close cooperation. Medicaid agency staffers are sometimes detailed to the MFCU to continue working cases they have developed. The state agency and MFCU hold joint meetings monthly to discuss developing cases, case progress, and to plan strategies for investigations, prosecutions, and administrative actions. The MFCU tries to use search warrants and other methods to gather evidence in suspected fraud cases so that information can be shared with the Medicaid agency. This is in contrast to the use of another MFCU tool—grand jury investigations—which have secrecy rules to prevent disclosure of evidence. This level of cooperation allows the state Medicaid agency to take immediate administrative action to stop improper payments without disrupting criminal case development. The MFCU also works to have defendants who are pleading guilty sign a consent order debarring or disqualifying them from participating in Medicaid, eliminating the need for state agency debarment or disqualification proceedings. In contrast to New Jersey, in another state, the director of an MFCU reported to us that MFCU investigators were denied access to state Medicaid agency meetings, which made it more difficult for both agencies to develop potential fraud cases. State Medicaid and MFCU officials told us that close collaboration among state agencies or state and federal law enforcement agencies was particularly important for certain types of cases. In the handful of states whose MFCUs lack authority to serve warrants or prosecute cases, MFCUs must work with other agencies to ensure that these activities take place. When dealing with individuals whose fraudulent or abusive activities cross state lines, one MFCU may need to work with other states’ agencies or with federal officials. Some cases involve efforts to defraud both Medicare and Medicaid, which can require an MFCU to work with the OIG or FBI. Such interagency collaboration has been fostered by the HCFAC program, which has increased funding for federal health care law enforcement efforts. Implementing section 407 of the Ticket to Work and Work Incentives Improvement Act of 1999, which authorized MFCUs to address cases that involve Medicare as well as Medicaid fraud, will also likely necessitate enhanced cooperation between MFCUs and federal law enforcement officials. Nearly all MFCUs responding to our survey reported that they have conducted joint investigations with other organizations in the last 3 years. Most commonly, this involved conducting joint investigations with their state agency, state licensing boards, the OIG, FBI, or a federal task force. Cooperative efforts have led to joint prosecutions. Twenty-seven states reported jointly prosecuting criminal cases with federal attorneys in the previous 3 years—about half doing so at least four times. Such cooperation can augment state officials’ activities. This was demonstrated in California, where members of a task force created by the FBI, the U.S. Attorney’s office, the California State Controller’s office, the Attorney General’s office, and the state Department of Health uncovered numerous fraud and abuse cases in the Los Angeles area. The Controller’s staff audited suppliers and referred to the FBI those with insufficient inventories or purchase records to substantiate claims volume. The FBI investigated further and made referrals to the U.S. Attorney. Meanwhile, the governor created a fraud prevention bureau within the state agency that worked closely with on-site FBI agents to investigate provider operations. Once a case was developed, the FBI referred it to the MFCU and U.S. Attorney’s office for prosecution. During our review, we found that several states—including Georgia, New Jersey, North Carolina, and Texas—have enacted stricter rules or restructured operations to better ensure the integrity of their Medicaid programs. A few examples of their accomplishments follow. Legislative changes: Some states are enacting health-care-specific criminal and civil legislation—often modeled after federal law. With these statutes, prosecutors no longer must develop cases based on more generic mail fraud, racketeering, theft, or conspiracy statutes. For example, New Jersey enacted the Health Care Claims Fraud Act, which creates the specific crime of health care claims fraud and provides for 10-year prison sentences, fines of up to five times the amount gained through fraud, and professional license revocation. Meanwhile, civil statutes—such as one enacted in North Carolina and other states authorizing action against providers who “knowingly” submit false Medicaid claims for payment— allow prosecutors to take advantage of less stringent evidentiary requirements than those required by criminal statutes. Restructuring operations: Some states are enhancing their program safeguard operations through restructuring. Texas created an Office of Investigations and Enforcement in 1997 within the state Medicaid agency, giving it power to take administrative actions against providers. These actions cannot be appealed when the Office has tangible evidence of potential fraud, abuse, or waste. It also can impose sanctions and recover improper payments. Meanwhile, Georgia established an MFCU in 1995 that differs from most in that it includes auditors from the state Department of Audits, investigators from the state Bureau of Investigation, and prosecutors from the state Attorney General’s office. They work together as a discreet entity under memoranda of understanding signed by the three agencies. HCFA and the OIG—the agencies that are responsible for the Medicaid program at the federal level—are taking steps to promote effective Medicaid program integrity by providing technical help to the states to facilitate states’ efforts. These federal agencies also conduct some information gathering on state activities in order to guide state efforts. Many state agency and MFCU officials reported that their agencies had benefited greatly from federal technical assistance, guidance, and training, and would welcome more assistance. In 1997, HCFA began a new approach as a facilitator, enabler, and catalyst of states’ program integrity efforts. To do so, HCFA established the National Medicaid Fraud and Abuse Initiative, led by staff from HCFA’s southern consortium and headquarters, with designated, part-time coordinators for the Initiative in each of HCFA’s 10 regional offices. The strategy for the Initiative was to partner with the states and have state representatives work with HCFA staff to set the agenda and goals for the effort. The Initiative provides networking, information sharing, and training opportunities for state agencies and their program integrity partners. Participants in early Initiative meetings identified 10 major focus areas— including payment accuracy measurement, managed care, and information technology. Workgroups are developing recommendations in each area. The Initiative also includes the Medicaid Fraud and Abuse Control Technical Advisory Group, consisting of HCFA and state officials, which serves as an ongoing forum for sharing issues, solutions, resources, and expertise among states; advising HCFA on policies, procedures, and program development; and making recommendations on federal policy and legislative changes. The Initiative has resulted in several tangible products and events, including a fraud statute Web site, managed care guidelines, seminars on innovations and obstacles in safeguarding Medicaid, and a technology conference. These efforts are described in table 3. State Medicaid officials that we spoke with reported that Initiative activities are helping them with their program safeguard efforts by providing important networking, information sharing, and training opportunities. Our survey results indicated that staff from 41 state Medicaid agencies attended Initiative-sponsored training last year, and more than 40 percent of state agencies had staff serve on Initiative panels. In fact, nearly 75 percent of state Medicaid agency survey respondents would like more of the types of assistance HCFA has been providing, including additional training; technical assistance on use of technology; guidance on managed care fraud detection and prevention; and information on innovative practices in other states. According to HCFA and some state officials, this approach has been more effective than previous efforts to guide state activities. Prior to 1997, HCFA reviewed information systems—including state SURS unit activities— through formal “systems performance reviews” of program controls. These controls included those related to payment and program safeguard activities. HCFA could impose penalties on states that failed these reviews, and some HCFA and state officials told us that states found the reviews burdensome. Section 4753 of the Balanced Budget Act of 1997 repealed HCFA’s authority to conduct such reviews. State and federal officials agree that federal attention to state program protection efforts declined after these mandatory reviews were eliminated. HCFA officials told us that staff in HCFA’s regional offices continued to provide some oversight of state efforts, but not in a coordinated way. However, without a regular review of state activities to address improper payments, HCFA staff had little information with which to guide states where more effective efforts were needed. To get a more comprehensive and systematic view of state antifraud efforts, the regional Initiative coordinators conducted structured site reviews of certain program safeguards in eight states in fiscal year 2000. These reviews examined how state Medicaid agencies identify and address potential fraud or abuse, whether state agencies are complying with appropriate laws and regulations—such as how they check to ensure that only qualified providers participate in the program—and potential areas for improvement. Reviews in another eight states are being conducted in fiscal year 2001. However, these reviews, as with all of HCFA’s Initiative endeavors, focus only on state efforts to address potential fraud and abuse; they do not address all of the ways states may be trying to prevent or detect improper payments, and whether these efforts could be improved. The OIG initially certifies, and each year recertifies, that MFCUs are complying with federal requirements and are eligible for federal funding. The OIG determines whether an MCFU should be recertified primarily based on reports the MFCUs submit on their activities. The OIG assesses these reports to determine whether each unit has used federal funds effectively and has met a set of 12 performance standards. These standards, which the OIG developed in conjunction with the National Association of Medicaid Fraud Control Units, cover areas such as staffing, training, types of cases (whether they constitute potential fraud or physical abuse of beneficiaries), case flow, and monitoring of case outcomes. For example, in the area of staffing, the OIG checks whether an MFCU has the minimum number of staff required. This includes at least one attorney experienced in investigating criminal cases or civil fraud, one experienced auditor capable of supervising financial records reviews and assisting in fraud investigations, and one senior investigator with substantial experience in conducting and supervising criminal investigations. The OIG may also conduct site visits to observe MFCU operations or provide guidance. Eight MFCUs received such visits in fiscal year 1999. OIG officials said they rarely decertified MFCUs. If decertified, an MFCU can reapply for federal certification when officials believe it will meet the required standards. Such is the case with the District of Columbia’s MFCU, which was decertified in 1983 for “lack of productivity.” It was recertified in 2000. The MFCUs generally reported being satisfied with OIG oversight and guidance, but indicated several areas where the OIG could provide more assistance—especially by providing more training. More than 45 percent of MFCUs reported that their staff attended OIG-sponsored training in the past fiscal year. MFCUs also would like the OIG to do the following. MFCU officials wanted the OIG to provide more training and assistance in their new authority to address cases that involve both Medicare and Medicaid fraud. Survey respondents were particularly interested in learning more about Medicare program rules, how Medicare claims processing contractors operate, and recent Medicare fraud schemes. They also wanted help in working with HCFA and Medicare claims processing contractors to get timely, online access to Medicare claims data. The OIG has begun to provide training on Medicare related issues. MFCUs would like the OIG to increase the number of OIG staff in regions and local areas to increase their participation in joint investigations. Medicaid remains vulnerable to payment error and, while most states are taking steps to address their programs’ vulnerabilities, their efforts are uneven. Some states have worked diligently to prevent or detect improper payments, while others have not been as proactive. The federal government has provided technical assistance and a forum for information exchange for the states, as well as some guidance. Given that states are responsible for administering Medicaid and investigating and prosecuting any fraudulent activities, states must set their own course to ensure the integrity of their Medicaid programs. But the federal government has a responsibility to actively partner with states to ensure that they succeed. In recent years, HCFA and other federal investigative organizations have played a more active role as partners in this endeavor. We provided draft copies of this report to HHS for comment. HHS officials provided written comments (see appendix III). We also provided excerpts from the draft report that dealt with state activities to states that we had visited. The reviewing officials suggested some technical corrections, which we incorporated into the report where appropriate. In its written comments, HHS provided information on the Department’s most recent efforts to prevent improper payments and to combat fraud and abuse in the Medicaid program. Among other activities, these efforts include a resource guide for states, a summary report of the joint HHS-DOJ technology conference, and a data exchange project between Medicaid and Medicare. HHS highlighted efforts to review program integrity activities in states and indicated that it intends to broaden the scope of the review in future fiscal years. Both the OIG and HCFA have developed training for state officials, including training for MFCU officials on Medicare. Finally, HHS reported that it has established a Web site at www.hcfa.gov/medicaid/fraud to provide states with additional technical assistance and guidance in their efforts to prevent and detect improper payments and to address fraud and abuse. As agreed with your office, unless you announce this report’s contents earlier, we plan no further distribution until 30 days after the issue date. We will then send copies to the Honorable Tommy G. Thompson, Secretary of HHS; the Honorable Thomas Scully, Administrator of HCFA; Mr. Michael Mangano, Acting Inspector General; and other interested parties. We will make copies available to others upon request. If you or your staff have any questions about this report, please call me at (312) 220-7600 or Sheila K. Avruch at (202) 512-7277. Other major contributors to this report were Barrett Bader, Bonnie Brown, Joel Grossman, and Elsie Picyk. As we developed our work on this report, we focused on the risk of improper Medicaid fee-for-service payments, states’ efforts to address improper payments—including efforts to investigate and prosecute fraud— and the guidance and oversight the states are receiving from federal oversight agencies. To do this work, we used information from our surveys, state visits, interviews, and analyses of agency program integrity documents and literature. To address the risk of improper fee-for-service payments, we reviewed studies that Illinois, Kansas, and Texas have conducted to measure payment accuracy in their Medicaid programs, and we interviewed state officials on the studies’ methodologies, findings, and limitations. To gain information on the types of improper billing schemes and other types of fraud cases, we interviewed state officials and reviewed state and HCFA documents. We also used results from our state survey, described below. To find out about state activities and federal oversight from the states’ perspective, we analyzed the results of surveys we sent to the 56 state Medicaid agencies and the 47 federally certified MFCUs then in existence. Fifty-three of the 56 state Medicaid agencies and 46 of the 47 MFCUs responded to our surveys. An additional MFCU in the District of Columbia, which had been decertified in 1983, was recertified in March 2000 after we sent out our survey. To facilitate their answering our questionnaire, we asked respondents, in several questions on the surveys, to base their answers on data from their most recently completed fiscal years, whether state or federal. (See appendix II for copies of our questionnaires and results.) To supplement the survey analyses, we visited state Medicaid programs and MFCUs in four states: Georgia, New Jersey, Texas, and Washington. We chose these states to provide regional diversity, and because they were among the ones considered by federal officials to be particularly active in efforts to identify and respond to improper payment practices—either through the use of new technology or by other means. Also, by telephone, we interviewed Medicaid, MFCU, and state government officials in other states that have taken steps to strengthen their Medicaid program integrity efforts. To better understand efforts to control improper payments at the national level, we interviewed officials at HCFA’s Central Office and leaders of the agency’s National Medicaid Fraud and Abuse Initiative in HCFA’s Atlanta and Dallas regional offices, as well as officials at the OIG. To gain a more broad-based perspective on other joint agency investigations and prosecutions, we interviewed representatives of the FBI, the U.S. Attorneys office, and the Civil and Criminal Divisions of DOJ. In addition, we participated in several meetings on control of improper payments, including fraud, which were sponsored by HCFA and others. Finally, we interviewed representatives of provider and supplier groups and technology companies that have developed software that is useful in the detection of improper payments. In addition, we reviewed literature on health care fraud and abuse, including studies by the OIG, HCFA, and others. We performed our work from September 1999 through April 2001 in accordance with generally accepted government auditing standards. Major Management Challenges and Program Risks: Department of Health and Human Services (GAO-01-247, Jan., 2001). National Practitioner Data Bank: Major Improvements Are Needed to Enhance Data Bank’s Reliability (GAO-01-130, Nov. 17, 2000). Medicaid: State Financing Schemes Again Drive Up Federal Payments (GAO/T-HEHS-00-193, Sept. 6, 2000). Financial Management: Improper Payments Reported in Fiscal Year 1999 Financial Statements (GAO/AIMD-00-261-R, July 27, 2000). Medicaid: HCFA and States Could Work Together to Better Ensure the Integrity of Providers (GAO/T-HEHS-00-159, July 18, 2000). Medicaid In Schools: Improper Payments Demand Improvements in HCFA Oversight (GAO/HEHS/OSI-00-69, Apr. 5, 2000). Medicaid: Federal and State Leadership Needed to Control Fraud and Abuse (GAO/T-HEHS-00-30, Nov. 9, 1999). Financial Management: Increased Attention Needed to Prevent Billions in Improper Payments (GAO/AIMD-00-10, Oct. 29, 1999). The first copy of each GAO report is free. Additional copies of reports are $2 each. A check or money order should be made out to the Superintendent of Documents. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. Orders by mail: U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Orders by visiting: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders by phone: (202) 512-6000 fax: (202) 512-6061 TDD (202) 512-2537 Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. Web site: http://www.gao.gov/fraudnet/fraudnet.htm e-mail: [email protected] 1-800-424-5454 (automated answering system) | State Medicaid programs make a wide variety of payments to individuals, institutions, and managed health care plans for services provided to beneficiaries whose eligibility status may fluctuate because of changes in income. Because of the size and the nature of the program, Medicaid is potentially at risk for billions of dollars in improper payments. The exact amount is unknown because few states measure the overall accuracy of their payments. Some improper Medicaid payments by states are the result of fraud by billers or program participants, but such improper payments are hard to measure because of the covert nature of fraud. Efforts by state Medicaid programs to address improper payments are modestly and unevenly funded. Half of the states spend no more than 1/10th of one percent of program expenditures to safeguard program payments. States also differ in how they help prevent improper payments as well as the degree to which they coordinate their investigations and prosecutions of fraud. Federal guidance to the states relies largely on technical assistance. The Health Care Financing Administration has recently taken a more active role to facilitate states' efforts and provide a national forum to share information. |
Media playback is unsupported on your device Media caption The BBC's Ian Pannell reports from inside Saraqeb. Guidance: This video contains disturbing images
The BBC has been shown evidence apparently corroborating reports of a chemical attack in Syria last month.
A BBC correspondent who visited the northern town of Saraqeb was told by eyewitnesses that government helicopters had dropped at least two devices containing poisonous gas.
The government has vehemently denied claims it has used chemical agents.
The US had warned that such a development would be a "red line" for possible intervention.
President Barack Obama said the US had seen evidence of chemical weapons being used in Syria - but it was important to get more specific information about what happened.
In a meeting with Turkish Prime Minister Recep Tayyip Erdogan in Washington, he said all options, both diplomatic and military, were being considered.
The two leaders reaffirmed their support for Syria's opposition and their demands for President Bashar al-Assad to stand down.
"There's no magic formula for dealing with an extraordinarily violent and difficult situation like Syria's," Mr Obama said.
"If there was, I think the prime minister and I would already have acted upon it and it would already be finished."
Meanwhile UK Foreign Secretary William Hague reiterated that Syria must allow access to a UN team to investigate the chemical weapons claims.
'Suffocating smell'
We were taken to Maryam Khatib's house by one of her nephews. He showed us where the device is said to have landed. A small hole has been smashed into the tiled floor, a pair of disposable surgeon's gloves lie abandoned nearby. The plants around the site appear to have withered and died, showing signs of possible contamination Is Syria using chemical weapons?
On 29 April, Saraqeb, a town south-west of Aleppo, came under artillery bombardment from government positions.
Doctors at the local hospital told the BBC's Ian Pannell they had admitted eight people suffering from breathing problems. Some were vomiting and others had constricted pupils, they said. One woman, Maryam Khatib, later died.
A number of videos passed to the BBC appear to support these claims, but it is impossible to independently verify them. Tests are being carried out in France, the UK and Turkey on samples from the site of the attack.
Mrs Khatib's son Mohammed had rushed to the scene to help his mother and was also injured in the attack.
"It was a horrible, suffocating smell. You couldn't breathe at all. You'd feel like you were dead. You couldn't even see. I couldn't see anything for three or four days," Mr Khatib told the BBC.
A doctor who treated Mrs Khatib said her symptoms corresponded with organophosphate poisoning and that samples had been sent for testing.
Image caption Mohammed Khatib says he was badly affected by the attack
One device was said to have landed on the outskirts of Saraqeb, with eyewitnesses describing a box-like container with a hollow concrete casing inside.
In another video, a rebel fighter holds a canister said to be hidden inside the devices. Witnesses claim there were two in each container.
Another video shows parts of a canister on the ground, surrounded by white powder.
Competing claims
Hamish de Bretton-Gordon, a former commanding officer at the UK's Joint Chemical Biological Radiological Nuclear Regiment, said the testimony and evidence from Saraqeb was "strong, albeit incomplete".
Media playback is unsupported on your device Media caption Hamish de Bretton-Gordon, chemical weapons expert: "I gauge that they're not making it up"
In Saraqeb and in three similar events in Syria in recent weeks, "people have got ill and died and their symptoms are what we would expect to see from a nerve type of agent, be it sarin or be it organophosphate," Mr de Bretton-Gordon said.
On the available evidence, recent attacks in al-Otaybeh to the east of Damascus, in Adra near the town of Douma, and in the Sheikh Maqsoud district of Aleppo appear "virtually identical" to what happened in Saraqeb, according to Mr de Bretton-Gordon.
Mr de Bretton-Gordon has not visited the site or tested any of the alleged evidence but was given full access to the material gathered by the BBC.
Both the US and UK have spoken of growing evidence that the Syrian government has used chemical weapons.
Investigating chemical weapons attacks Techniques used by investigators include: Interviews with survivors of alleged attacks and other witnesses such as medical staff
Medical examinations of victims, and tests of blood and urine samples
Inspecting sites of alleged attacks to search for evidence such as remnants of shells or bombs and environmental samples
Material tested in mobile field laboratories or in one of an international network of laboratories maintained by the Organisation for the Prohibition of Chemical Weapons How to investigate chemical weapons allegations
Rebel fighters have also been accused of using them. They also have denied this.
In March, Syria's government and opposition called for an inquiry into an alleged chemical weapon attack in Khan al-Assal in the north of Syria which killed at least 27 people, with both sides blaming each other.
A 15-strong UN team headed by a Swedish scientist Ake Sellstrom has been assembled to investigate the claims.
However, the Syrian government has refused the team access. Syrian officials have been quoted as saying they want the team to look into the incident in Khan al-Assal, but the team has requested unconditional access with the right to inquire into all credible allegations.
The UN estimates that the two-year-old conflict has left at least 80,000 people dead. ||||| Organophosphate poisoning is poisoning due to organophosphates (OPs).[4] Organophosphates are used as insecticides, medications, and nerve agents.[4] Symptoms include increased saliva and tear production, diarrhea, vomiting, small pupils, sweating, muscle tremors, and confusion.[2] While onset of symptoms is often within minutes to hours, some symptoms can take weeks to appear.[5][1] Symptoms can last for days to weeks.[2]
Organophosphate poisoning occurs most commonly as a suicide attempt in farming areas of the developing world and less commonly by accident.[2] Exposure can be from drinking, breathing in the vapors, or skin exposure.[4] The underlying mechanism involves the inhibition of acetylcholinesterase (AChE), leading to the buildup of acetylcholine (ACh) in the body.[2] Diagnosis is typically based on the symptoms and can be confirmed by measuring butyrylcholinesterase activity in the blood.[2] Carbamate poisoning can present similarly.[2]
Prevention includes banning very toxic types of organophosphates.[2] Among those who work with pesticides the use of protective clothing and showering before going home is also useful.[6] In those who have organophosphate poisoning the primary treatments are atropine, oximes such as pralidoxime, and diazepam.[2][4] General measures such as oxygen and intravenous fluids are also recommended.[2] Attempts to decontaminate the stomach, with activated charcoal or other means, has not been shown to be useful.[2] While there is a theoretical risk of health care workers taking care of a poisoned person becoming poisoned themselves, the degree of risk appears to be very small.[2]
OPs are one of the most common causes of poisoning worldwide.[2] There are nearly 3 million poisonings per year resulting in two hundred thousand deaths.[2][3] Around 15% of people who are poisoned die as a result.[2] Organophosphate poisoning has been reported at least since 1962.[7]
Signs and symptoms [ edit ]
The symptoms of organophosphate poisoning include muscle weakness, fatigue, muscle cramps, fasciculation, and paralysis. Other symptoms include hypertension, and hypoglycemia.
Overstimulation of nicotinic acetylcholine receptors in the central nervous system, due to accumulation of ACh, results in anxiety, headache, convulsions, ataxia, depression of respiration and circulation, tremor, general weakness, and potentially coma. When there is expression of muscarinic overstimulation due to excess acetylcholine at muscarinic acetylcholine receptors symptoms of visual disturbances, tightness in chest, wheezing due to bronchoconstriction, increased bronchial secretions, increased salivation, lacrimation, sweating, peristalsis, and urination can occur.[8][9]
The effects of organophosphate poisoning on muscarinic receptors are recalled using the mnemonic SLUDGEM (salivation, lacrimation, urination, defecation, gastrointestinal motility, emesis, miosis)[10] An additional mnemonic is MUDDLES: miosis, urination, diarrhea, diaphoresis, lacrimation, excitation, and salivation.[11]
The onset and severity of symptoms, whether acute or chronic, depends upon the specific chemical, the route of exposure (skin, lungs, or GI tract), the dose, and the individuals ability to degrade the compound, which the PON1 enzyme level will affect.
Reproductive effects [ edit ]
Certain reproductive effects in fertility, growth, and development for males and females have been linked specifically to OP pesticide exposure. Most of the research on reproductive effects has been conducted on farmers working with pesticides and insecticdes in rural areas. For those males exposed to OP pesticides, poor semen and sperm quality have been seen, including reduced seminal volume and percentage motility, as well as a decrease in sperm count per ejacuate. In females menstrual cycle disturbances, longer pregnancies, spontaneous abortions, stillbirths, and some developmental effects in offspring have been linked to OP pesticide exposure. Prenatal exposure has been linked to impaired fetal growth and development. The effects of OP exposure on infants and children are at this time currently being researched to come to a conclusive finding.[12][13] Evidence of OP exposure in pregnant mothers are linked to several health effects in the fetus. Some of these effects include delayed mental development, Pervasive developmental disorder (PDD),[9] morphological abnormalities in the cerebral surface.[14]
Neurotoxic effects [ edit ]
Neurotoxic effects have also been linked to poisoning with OP pesticides causing four neurotoxic effects in humans: cholinergic syndrome, intermediate syndrome, organophosphate-induced delayed polyneuropathy (OPIDP), and chronic organophosphate-induced neuropsychiatric disorder (COPIND). These syndromes result after acute and chronic exposure to OP pesticides.
Cholinergic syndrome occurs in acute poisonings with OP pesticides and is directly related to levels of AChE activity. Symptoms include miosis, sweating, lacrimation, gastrointestinal symptoms, respiratory difficulties, shortness of breath, slowed heart rate, cyanosis, vomiting, diarrhea, trouble sleeping, as well as other symptoms. Along with these central effects can be seen and finally seizures, convulsions, coma, respiratory failure. If the person survives the first day of poisoning personality changes can occur, aggressive events, psychotic episodes, disturbances and deficits in memory and attention, as well as other delayed effects. When death occurs, it is most commonly due to respiratory failure from the combination of central and peripheral effects, paralysis of respiratory muscles and depression of the brain respiratory center. For people afflicted with cholinergic syndrome, atropine sulfate combined with an oxime is used to combat the effects of the acute OP poisoning. Diazepam is sometimes also administered in combination with the atropine and oximes.[15]
The intermediate syndrome (IMS) appears in the interval between the end of the cholinergic crisis and the onset of OPIDP. Symptoms associated with IMS manifest within 24–96 hours after exposure. The exact etiology, incidence, and risk factors associated with IMS are not clearly understood, but IMS is recognized as a disorder of neuromuscular junctions. IMS occurs when a person has a prolonged and severe inhibition of AChE and has been linked to specific OP pesticides such as methylparathion, dichlorvos, and parathion. Patients present with increasing weakness of facial, neck flexor and respiratory muscles.
OPIDP occurs in a small percentage of cases, roughly two weeks after exposure, where temporary paralysis occurs. This loss of function and ataxia of peripheral nerves and spinal cord is the phenomenon of OPIDP. Once the symptoms begin with shooting pains in both legs, the symptoms continue to worsen for 3–6 months. In the most severe cases quadriplegia has been observed. Treatment only affects sensory nerves, not motor neurons which may permanently lose function. The aging and phosphorylation of more than 70% of functional NTE in peripheral nerves is one of the processes involved in OPIDP.[11][15] Standard treatments for OP poisoning are ineffective for OPIDP.
COPIND occurs without cholinergic symptoms and is not dependent on AChE inhibition. COPIND appears with a delay and is long lasting. Symptoms associated with COPIND include cognitive deficit, mood change, autonomic dysfunction, peripheral neuropathy, and extrapyramidal symptoms. The underlying mechanisms of COPIND have not been determined, but it is hypothesized that withdrawal of OP pesticides after chronic exposure or acute exposure could be a factor.[15]
Pregnancy [ edit ]
Evidence of exposure to OP pesticides during gestation and early postnatal period have been linked to neurodevelopmental effects in animals, specifically rats. Animals exposed in utero to chlorpyrifos exhibited decreased balance, poorer cliff avoidance, decreased locomotion, delays in maze performance, and increased gait abnormalities. Early gestation is believed to be a critical time period for the neurodevelopmental effects of pesticides. OP's affect the cholinergic system of fetuses, so exposure to chlorpyrifos during critical periods of brain development potentially could cause cellular, synaptic, and neurobehavioral abnormalities in animals.[16] In rats exposed to methyl parathion, studies found reduced AChE activity in all brain regions and subtle alterations in behaviors such as locomotor activity and impaired cage emergence. Organophosphates as whole have been linked to decreases in the length of limbs, head circumference, and slower rates of postnatal weight gain in mice.[9]
Cancer [ edit ]
The International Agency for Research on Cancer (IARC), found that organophosphates may possibly increased cancer risk.[17] Tetrachlorvinphos and parathion were classified as "possibly carcinogenic", malathion, and diazinon.[17]
Cause [ edit ]
OP pesticide exposure occurs through inhalation, ingestion and dermal contact.[18] Because OP pesticides disintegrate quickly in air and light, they have been considered relatively safe to consumers.[19] However, OP residues linger on fruits and vegetables.[20] Certain OP pesticides have been banned for use on some crops, for example methyl parathion is banned from use on some crops while permitted on others.[21] The Environmental Working Group has developed lists for concerned consumers, identifying crops with the highest pesticide residue quantities and the lowest. The "Dirty Dozen" crops are updated yearly and in 2012 included apples, celery, sweet bell peppers, peaches, strawberries, imported nectarines, grapes, spinach, lettuce, cucumbers, domestic blueberries and potatoes.[22] Forty-five fruits and vegetables are listed by the Environmental Working Group as being regularly found with pesticide residue associated with OPs.
Examples [ edit ]
Exposure to any one of the above-listed organophosphates occurs on a daily basis through inhalation, absorption, and ingestion, most commonly of food that has been treated with an organophosphate herbicide or insecticide. Exposure to these chemicals can occur at public buildings, schools, residential areas, and in agricultural areas. The chemicals chlorpyrifos and malathion have been linked to reproductive effects, neurotoxicity, kidney/liver damage, and birth defects. Dichlorvos has also been linked to reproductive effects, neurotoxicity, and kidney/liver damage, as well as being a possible carcinogen.[23]
Pathophysiology [ edit ]
The health effects associated with organophosphate poisoning are a result of excess acetylcholine (ACh) present at different nerves and receptors in the body because acetylcholinesterase is blocked. Accumulation of ACh at motor nerves causes overstimulation of nicotinic expression at the neuromuscular junction. When there is an accumulation of ACh at autonomic ganglia synapses this causes overstimulation of muscarinic expression in the parasympathetic nervous system.
Organophosphates inhibit AChE, causing OP poisoning by phosphorylating the serine hydroxyl residue on AChE, which inactivates AChE. AChE is critical for nerve function, so the irreversible blockage of this enzyme, which causes acetylcholine accumulation, results in muscle overstimulation. This causes disturbances across the cholinergic synapses and can only be reactivated very slowly, if at all. Paraoxonase (PON1) is a key enzyme involved in OP pesticides and has been found to be critical in determining an organism's sensitivity to OP exposure.
PON1 can inactivate some OPs through hydrolysis. PON1 hydrolyzes the active metabolites in several OP insecticides such as chlorpyrifos oxon, and diazoxon, as well as, nerve agents such as soman, sarin, and VX. PON1 hydrolyzes the metabolites, not the parent compounds of insectides.[24] The presence of PON1 polymorphisms causes there to be different enzyme levels and catalytic efficiency of this esterase, which in turn suggests that different individuals may be more susceptible to the toxic effect of OP exposure. The level of PON1 plasma hydrolytic activity provides more protection against OP pesticides. Rats injected with purified PON1 from rabbit serum were more resistant to acute cholinergic activity than the control rats. PON1 knockouts in mice are found to be more sensitive to the toxicity of pesticides, like chlorpyrifos. Animal experiments indicate that while PON1 plays a significant role in regulating the toxicity of OPs its degree of protection given depends on the compound (i.e. Chlorpyrifos oxon or diazoxon). The catalytic efficiency with which PON1 can degrade toxic OPs determines the degree of protection that PON1 can provide for organism. The higher the concentration of PON1 the better the protection provided. PON1 activity is much lower in neonates, so neonates are more sensitive to OP exposure.[24] In 2006, reports up to a 13-fold variation was seen in PON1 levels in adults, as well as, specifically regarding sensitivity to diazoxon, a variation up to 26 and 14-fold was reported in a group of newborns and Latino mothers. This wide range in variability of enzyme levels determining a humans sensitivity to various OPs is being researched further.[25]
Diagnosis [ edit ]
A number of measurements exist to assess exposure and early biological effects for organophosphate poisoning. Measurements of OP metabolites in both the blood and urine can be used to determine if a person has been exposed to organophosphates. Specifically in the blood, metabolites of cholinesterases, such as butyrylcholinesterase (BuChE) activity in plasma, neuropathy target esterase (NTE) in lymphocytes, and of acetylcholinesterase (AChE) activity in red blood cells.[24] Due to both AChE and BuChE being the main targets of organophosphates, their measurement is widely used as an indication of an exposure to an OP. The main restriction on this type of diagnosis is that depending on the OP the degree to which either AChE or BuChE are inhibited differs; therefore, measure of metabolites in blood and urine do not specify for a certain OP.[24][26] However, for fast initial screening, determining AChE and BuChE activity in the blood are the most widely used procedures for confirming a diagnosis of OP poisoning.[26] The most widely used portable testing device is the Test-mate ChE field test,[27][28]:13 which can be used to determine levels of Red Blood Cells (RBC), AChE and plasma (pseudo) cholinesterase (PChE) in the blood in about four minutes. This test has been shown to be just as effective as a regular laboratory test and because of this, the portable ChE field test is frequently used by people who work with pesticides on a daily basis.[29]
Treatment [ edit ]
Current antidotes for OP poisoning consist of a pretreatment with carbamates to protect AChE from inhibition by OP compounds and post-exposure treatments with anti-cholinergic drugs. Anti-cholinergic drugs work to counteract the effects of excess acetylcholine and reactivate AChE. Atropine can be used as an antidote in conjunction with pralidoxime or other pyridinium oximes (such as trimedoxime or obidoxime),[30][31] though the use of "-oximes" has been found to be of no benefit, or possibly harmful, in at least two meta-analyses.[32][33] Atropine is a muscarinic antagonist, and thus blocks the action of acetylcholine peripherally.[34] These antidotes are effective at preventing lethality from OP poisoning, but current treatment lack the ability to prevent post-exposure incapacitation, performance deficits, or permanent brain damage.[35] While the efficacy of atropine has been well-established, clinical experience with pralidoxime has led to widespread doubt about its efficacy in treatment of OP poisoning.[36]
Enzyme bioscavengers are being developed as a pretreatment to sequester highly toxic OPs before they can reach their physiological targets and prevent the toxic effects from occurring. Significant advances with cholinesterases (ChEs), specifically human serum BChE (HuBChE) have been made. HuBChe can offer a broad range of protection for nerve agents including soman, sarin, tabun, and VX. HuBChE also possess a very long retention time in the human circulation system and because it is from a human source it will not produce any antagonistic immunological responses. HuBChE is currently being assessed for inclusion into the protective regimen against OP nerve agent poisoning.[35] Currently there is potential for PON1 to be used to treat sarin exposure, but recombinant PON1 variants would need to first be generated to increase its catalytic efficiency.
One other agent that is being researched is the Class III anti-arrhythmic agents. Hyperkalemia of the tissue is one of the symptoms associated with OP poisoning. While the cellular processes leading to cardiac toxicity are not well understood, the potassium current channels are believed to be involved. Class III anti-arrhythmic agents block the potassium membrane currents in cardiac cells, which makes them a candidate for become a therapeutic of OP poisoning.[37]
Epidemiology [ edit ]
Organophosphate pesticides are one of the top causes of poisoning worldwide, with an annual incidence of poisonings among agricultural workers varying from 3-10% per country.[38]
History [ edit ]
Ginger Jake [ edit ]
A striking example of OPIDN occurred during the 1930s Prohibition Era when thousands of men in the American South and Midwest developed arm and leg weakness and pain after drinking a "medicinal" alcohol substitute. The drink, called "Ginger Jake," contained an adulterated Jamaican ginger extract containing tri-ortho-cresyl phosphate (TOCP) which resulted in partially reversible neurologic damage. The damage resulted in the limping "Jake Leg" or "Jake Walk" which were terms frequently used in the blues music of the period. Europe and Morocco both experienced outbreaks of TOCP poisoning from contaminated abortifacients and cooking oil, respectively.[39][40]
Gulf War syndrome [ edit ]
Research has linked the neurological abnormalities found in Persian Gulf War veterans who suffer from chronic multisymptom ilnesses to exposure to wartime combinations of organophosphate chemical nerve agents. Before, it was believed that veterans were suffering from a psychologically based disorder or depression, most likely post-traumatic stress disorder (PTSD). Many veterans were given pyridostigmine bromide (PB) pills to protect against nerve gas agents such as sarin and soman. During the war veterans were exposed to combinations of organophosphate pesticides and nerve agents, which produced symptoms associated with chronic organophosphate-induced delayed polyneuropathy (OPIDP) syndrome. Similar symptoms found in the veterans were the same symptoms reported for individuals in occupational settings who were acutely poisoned by organophosphates, such as chlorpyrifos. Studies found veterans experienced deficits in intellectual and academic abilities, simple motor skills, memory impairment, and impaired emotional function. These symptoms indicate brain damage, not a psychologically based disorder.[41][42][43]
Society and culture [ edit ]
United States [ edit ]
Under a 1988 amendment to the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), the U.S. Environmental Protection Agency (EPA) regulates organophosphate pesticides[44] Its focus was initially on registering pesticides for use on food crops. No pesticide can be sold in the United States before the EPA has reviewed the manufacture's application for registration and determined that the use of the product will not present an unreasonable risk to the public or the environment.[45] In 1996, with the passage of the Food Quality Protection Act, Congress required the EPA to reassess all existing pesticide tolerances with specific consideration for children.[46] This resulted in a 10-year review process of the health and environmental effects of all pesticides, beginning with the organophosphates. As part of that process, in 1999 the EPA announced a ban the use of organophosphate pesticide methyl parathion and significant restrictions on the use of another OP, azinphos methyl, in what they called "kid's food".[47] The review process was concluded in 2006 and eliminated or modified thousands of other uses of pesticides.[48] Other legislative action has been taken to protect children from the risks of organophosphates.
Many non-governmental and research groups, as well as the EPA's Office of Inspector General, have published concerns that the review did not take into account possible neurotoxic effects on developing fetuses and children, an area of developing research. OIG report. A group of leading EPA scientists sent a letter to the chief administrator, Stephen Johnson, decrying the lack of developmental neurotoxicity data in the review process. EPA Letter EHP article New studies have shown toxicity to developing organisms during certain "critical periods" at doses much lower than those previously suspected to cause harm.[49]
Even the restrictions that did successfully pass have been controversial. For example, in 1999 the EPA restricted the use of chlorpyrifos in households (under the commercial name Dursban). However, the EPA did not limit its use in agriculture. Chlorpyrifos remains one of the most widely used pesticides.[50] This may soon change. On February 8, 2013 the EPA requested comment on a preliminary evaluation of the potential risks to children and other bystanders from volatilization of chlorpyrifos from treated crops[51]
Vulnerable groups [ edit ]
Some populations are more vulnerable to pesticide poisoning. In the United States, farmworkers can be exposed via direct spray, drift, spills, direct contact with treated crops or soil, or defective or missing protective equipment.[52] Migrant workers may be at an especially high risk of chronic exposure as over the course of a growing season, they may work at multiple farms, thus increasing their exposure to pesticides.[52] Farmworkers in more permanent positions may receive more safety training and/or more “consistent reinforcement of safety behaviors than seasonal farmworkers or day laborers.”[6] For migrant farmworkers, language barriers and/or education level could be a barrier to understanding posted warning signs, labels and safety warnings located on the pesticides, or understanding any safety training that is provided.[6]
Other factors that may lead to greater exposure for the migrant farmworker population include: limited or no access to safety equipment, little to no control over pesticide use, cultural factors, and fear of job loss if they report potential hazards.[53][52][6] Studies have also shown that there are some key beliefs by farmworkers that may exacerbate pesticide exposure, including the belief that “pesticides must be felt, seen, tasted, or smelled to be present; the skin blocks absorption and body openings facilitate it; exposure occurs only when a pesticide is wet;…and acute, not low-level chronic exposure is the primary danger.”[6]
This, coupled with the difficulty or uncertainty of recognizing and/or diagosing chronic pesticide poisoning by the medical community,[54] makes it difficult for exposed workers to receive an effective remedy.[52] Migrant workers may also be hesitant to seek-out medical care due to lack of health insurance, language barriers, immigration status, cost, cultural factors, lack of transportation, fear of job loss, and lack of awareness of workers’ compensation benefits.[53]
Research [ edit ]
Currently, more research is being done on animal fetuses to determine the effects of OP's during critical periods of development[citation needed]. Due to children's decreased size, faster rate of respiration, and continuing organ development, this area is important to research. Research to determine the variability on the PON1 enzyme in humans is also currently being researched.
The use of the organophosphates in aviation lubricating oils and hydraulic fluids and its impact on health and flight safety is currently being researched. Aerotoxic syndrome is a medical condition allegedly caused by exposure to contaminated bleed air.
Purdey (1998) suggested that organophosphates, in particular Phosmet, induced the transmissible spongiform encephalopathy epidemic of BSE.[55][unreliable medical source?] A European Union food safety Scientific Steering Committee examined the evidence and did not find a link.[56] | Government helicopters dropped chemical weapons last month on the Syrian town of Saraqeb, eyewitness testimony strongly suggests. A BBC correspondent visited the town, and was regaled with accounts and videos of box-like devices being dropped out of helicopters and emitting deadly gas. "It was a horrible, suffocating smell," said the son of a woman killed in the attack. "You couldn't breathe at all. You'd feel like you were dead." Doctors at nearby hospitals attested to having treated eight people suffering from symptoms consistent with organophosphate poisoning. The accounts of the Saraqeb attack appear to be "virtually identical" to those in three other cities in recent weeks, a former commanding officer at the UK military's chemical warfare division. "When you put them all together you start to see a picture that is very much more conclusive," he said, and after listening to the witnesses and doctors, "I gauge that they're not making it up." The alleged use of helicopters in the attacks would appear to implicate the Assad regime as the culprits, but the UN thinks Syrian rebels have also used chemical weapons. |
President Donald Trump: "It’s working out very nicely. You see it at the airports, you see it all over.” | Getty Judge blocks deportations as Trump order sparks global outrage White House faces legal challenges over executive order after travelers with visas to enter the U.S. were detained.
NEW YORK — A judge has blocked the federal government from deporting citizens of seven countries who were detained at U.S. airports over the past day or so as a result of an executive order President Donald Trump issued Friday.
Advocates said 100 to 200 travelers from those Muslim-majority countries were being held at various airports around the U.S. as a result of Trump’s order, which was billed as an anti-terrorism measure. The detentions sparked protests outside many international airports, including John F. Kennedy Airport in New York and Dulles Airport outside Washington.
Story Continued Below
U.S. District Court Judge Ann Donnelly issued her injunction over the government’s objection during an emergency hearing Saturday night as several hundred people opposed to Trump's order chanted and milled about outside the Brooklyn, N.Y., federal courthouse.
During the brief court session, the judge said it was difficult to see the harm in allowing the newly arrived immigrants to stay since they were being routinely admitted just a couple of days ago.
"If they had come in two days ago, we wouldn't be here, am I right? ... These are all people who have been through a vetting process," the judge said.
"Explain to me how these petitioners won't suffer irreparable damage if I don't grant this stay?" Donnelly asked.
Assistant U.S. Attorney Susan Riley complained that the court proceeding was unduly rushed. "This has unfolded with such speed, we haven't had an opportunity to address any of the important legal issues," Riley said.
However, American Civil Liberties Union lawyer Lee Gelernt said the immigrants affected were essentially the victims of bad timing that caused them to be caught in limbo just as Trump's order was being issued.
"These people were caught in transit," Gelernt said. "The government is putting someone back on a plane to Syria now."
Donnelly, an appointee of President Barack Obama, said she was freezing the status quo by blocking the deportations.
"The whole point of this hearing is to preserve the status quo. I don't think it's unduly burdensome to identify people we are talking about here," the judge declared. "Nobody is to be removed in this class."
The White House had no immediate comment on the legal setback for one of the new president's signature policy moves. Justice Department spokespeople did not immediately indicate whether an appeal was planned.
Donnelly's order does not appear to interfere with most of Trump's directive, since the judge only moved to protect a limited number of individuals who were already on or were about to board flights to the U.S. when Trump signed his measure. Now, such travelers will likely be blocked from boarding flights in the first place.
Several other judges also stepped into the legal fray over the implementation of Trump’s executive order Saturday night and into the wee hours of Sunday morning. A federal judge in Alexandria, Va., issued an order barring the deportation of all green card holders being detained at Dulles Airport In Virginia for seven days. Judge Leonie Brinkema’s order also required that Customs and Border Protection grant lawyers access to those individuals.
"Department of Homeland Security officials are refusing to allow lawyers to talk with the detained people, who are legal permanent residents, even though the judge’s order requires the government to permit lawyer access,” one of the attorneys involved, Andrew Pincus, said later Saturday night.
Also, a federal judge in Seattle blocked the deportation of two immigrants from the airport there until a hearing set for Friday.
Early Sunday morning, two federal judges in Massachusetts issued an edict that seemed to further undermine Trump’s order. The restraining order from U.S. District Court Judge Susan Burroughs and Magistrate Judge Judith Dein appeared to be the first one to require the actual release of people being detained under Trump’s order.
Burroughs and Dein ruled that for the next seven days immigration officials “shall not by any manner or means detain or remove individuals” with valid visas, or green cards, or refugees who would be permitted to enter the U.S. in the absence of Trump’s order.
The Massachusetts federal judges’ order appeared to apply nationwide, although a portion of it focused on instructions for airlines serving Boston’s Logan Airport. The judges instructed Customs and Border Protection to advise those airlines that “individuals on these flights will not be detained or returned based solely on the Executive Order.”
The early-morning judicial order came shortly after the Department of Homeland Security issued a statement indicating plans to release all green-card holders who had arrived in the United States on Friday or Saturday who were detained under the Trump order. However, the Massachusetts judges’ order included categories beyond green-card holders. It was not immediately clear whether the Massachusetts federal judges’ order effectively guaranteed the rights of green-card holders to board flights headed for the U.S. or even for Boston.
If that order doesn't free all the immigrants being detained as a result of Trump’s executive action, the legal battle will likely move to a series of individual cases filed in New York, Chicago and elsewhere Saturday, where immigrants will be seeking to be released from detention to travel or settle in the U.S.
Donnelly acted on a petition filed early Saturday in the Eastern District of New York, seeking to release Hameed Khalid Darweesh and Haider Sameer Abdulkhaleq Alshawi from detention at JFK Airport. The case was filed by the ACLU, the International Refugee Assistance Project the National Immigration Law Center and a Yale Law School legal clinic.
Darweesh was released early Saturday afternoon, according to aides to New York Democratic Reps. Jerry Nadler and Nydia Velazquez, who went to JFK to try and free the men. Alshawi was released Saturday night, said a Nadler spokesman who indicated earlier that at least 10 others had been detained at the airport.
“This should not happen in America," the two lawmakers said in a statement earlier Saturday. "We shouldn’t have to demand the release of refugees one by one. We must fight this executive order in the streets, in the courts, anywhere, anytime. We must resist. We must fight. We must keep working to keep America the land of the free and the home of the brave.”
Pandemonium over Trump's new executive order erupted at airports nationwide on Saturday, with reports of dozens of immigrants and travelers stranded or turned back in Philadelphia, Washington, D.C., New York and Dallas as demonstrators flooded airports to denounce Trump's directive. One Syrian Christian family who had been working with Rep. Charlie Dent (R-Pa.) were detained at Philadelphia International Airport and then subsequently forced to leave, according to the congressman.
During a press conference at Dulles International Airport, Virginia Gov. Terry McAuliffe said one family had been detained as he slammed Trump's order as one that will "breed hatred toward Americans around the globe." Fifty people were being held at Dallas/Fort Worth International Airport, according to local reports.
Protesters rally at a demonstration against the new ban on immigration issued by President Donald Trump at Logan International Airport in Boston on Jan. 28. | Getty
But at the White House, Trump said his order was being carried out just as he planned.
“It’s not a Muslim ban, but we were totally prepared," Trump said. "It’s working out very nicely. You see it at the airports, you see it all over.”
Customs and Border Protection agents who detained the men at JFK pointed to Trump’s executive order, telling the immigrants’ attorneys: “Mr. President. Call Mr. Trump,” according to the 20-page lawsuit.
Darweesh, now 53, worked on behalf of the U.S. military in Iraq for a decade as an interpreter and electrical engineer, earning him a so-called “special immigrant visa” that are allotted to Iraqi nationals who aided the U.S. government during the Iraq War and now face threats staying there. Darweesh applied for the visa in Oct. 1, 2014, which was issued on Jan. 20, the same day Trump was inaugurated.
And Alshawi, 33, was granted a visa Jan. 11 to join his wife and son, who have already been resettled as refugees in Houston.
The lawsuit argues that the detention of two men is “part of a widespread pattern applied to many refugees and arriving aliens detained after the issuance of” Trump’s executive order on Friday.
On a call with reporters Saturday, Abed Ayoub, legal and policy director for the American-Arab Anti-Discrimination Committee, said CBP officials had told advocates dozens of people were being held at JFK as a result of the executive order.
He also cited reports of people being held at airports in Atlanta, Detroit, Houston and Washington, D.C.
“We’re already hearing about hundreds of people being detained at airports,” said Marielena Hincapie, the executive director of the National Immigration Law Center. “It got issued late on a Friday afternoon, it was not released to the public for several hours and then here on a Friday night over the weekend, we’re dealing with hundreds of people who have been arriving with no guidance to Border Patrol personnel.”
Trump’s far-reaching executive order does allow for some exemptions at the discretion of administration officials, including “when the person is already in transit and denying admission would cause undue hardship.” But advocates such as Hincapie say the messy rollout of Trump’s controversial directive is triggering confusion and chaos at airports nationwide, since border patrol officers have received little guidance on how to implement the order.
“They failed to inform airports about what to do,” Hincapie said.
Darweesh’s wife and three children were also granted visas and traveled with him, but were not detained. They are supposed to resettle in Charlotte, N.C. And neither men had been allowed to contact their lawyers, the lawsuit says.
Iraq is one of seven countries whose citizens, under Trump’s executive order released late Friday, are barred from entering the United States for 90 days, along with Iran, Libya, Somalia, Sudan, Syria and Yemen.
Ted Hesson contributed to this report. ||||| President Donald Trump speaks on the phone with German Chancellor Angela Merkel, Saturday, Jan. 28, 2017, in the Oval Office at the White House in Washington. (AP Photo/Andrew Harnik) (Associated Press)
President Donald Trump speaks on the phone with German Chancellor Angela Merkel, Saturday, Jan. 28, 2017, in the Oval Office at the White House in Washington. (AP Photo/Andrew Harnik) (Associated Press)
WASHINGTON (AP) — The Latest on U.S. President Donald Trump and his ban on refugees from Muslim-majority countries (all times local):
3 a.m.
The Homeland Security Department says a New York court order temporarily barring the U.S. from deporting people from nations subject to President Donald Trump's travel ban will not affect the overall implementation of the White House executive action.
The agency said the court order affected a relatively small number of travelers who were inconvenienced by security procedures upon their return.
The department's statement said: "President Trump's Executive Orders remain in place— prohibited travel will remain prohibited, and the U.S. government retains its right to revoke visas at any time if required for national security or public safety," according to the DHS statement.
Stephen Miller, a senior adviser to the White House, said that nothing in the judge's order "in anyway impedes or prevents the implementation of the president's executive order which remains in full, complete and total effect."
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11 p.m.
Foreign-born U.S. residents who could have been barred from re-entering the United States under President Donald Trump's immigration order have been allowed back into the country.
That's according to a Department of Homeland Security official who briefed reporters on Saturday night. The official spoke on condition of anonymity because the official wasn't authorized to publicly discuss details of the matter.
Trump's order Friday barred citizens of seven Muslim-majority nations from entering the United States for 90 days. That meant that even those with permanent residency "green cards" or other visas risked not being let back in to the United States.
However, the official said all green card holders from the seven countries who sought to enter the U.S. Saturday were granted special permission.
It's not clear if other green card holders will be admitted. The official said cases are being reviewed individually.
— Alicia Caldwell
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9:40 p.m.
A federal judge in New York has issued an emergency order temporarily barring the U.S. from deporting people from nations subject to President Donald Trump's travel ban.
U.S. District Judge Ann Donnelly issued the order Saturday evening after lawyers for the American Civil Liberties Union filed a court petition on behalf of people from seven predominantly Muslim nations who were detained at airports across the country as the ban took effect.
Cheers broke out in a crowd of demonstrators outside a Brooklyn courthouse as the decision, effective nationwide, was announced.
The order barred U.S. border agents from removing anyone who arrived in the U.S. with a valid visa from Iraq, Syria, Iran, Sudan, Libya, Somalia and Yemen.
It also covered anyone with an approved refugee application.
It was unclear how quickly the order might affect people in detention.
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7 p.m.
New York City's Kennedy Airport became a scene of anguish Saturday for relatives of people detained after arriving in the U.S. from nations subject to President Donald Trump's travel ban.
Lawyers and advocates working at the airport say they didn't have a hard count on the number of people taken into custody after getting off their flights.
Yosre Ghaled was among about a dozen distraught people waiting at a terminal Saturday to see if loved ones would be released or deported.
She says her mother-in-law's sister had been detained.
The 67-year-old Yemeni citizen had flown to the U.S. to live with family because she is sick from heart problems and diabetes.
Two members of congress joined hundreds of protesters at the airport, demonstrating against the detentions.
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1 a.m.
The government of Mexican President Enrique Pena Nieto is taking exception to the Israeli prime minister's praise of a border wall to keep out illegal immigration.
Prime Minister Benjamin Netanyahu said on Twitter Saturday that "President Trump is right" for building a wall.
"I built a wall along Israel's southern border," he wrote. "It stopped all illegal immigration. Great success. Great idea."
Mexico's Foreign Ministry said in a communique that it had expressed its "profound surprise, rejection and disappointment in the prime minister's message on Twitter" to Israel's ambassador. "Mexico is Israel's friend and should be treated as such."
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12:20 a.m.
President Donald Trump says his crackdown on refugees and citizens from seven majority-Muslim countries "is not a Muslim ban."
A day after signing an executive order implementing the ban immediately, Trump says it's "working out very nicely."
But confusion, worry and outrage boiled over Saturday as airlines blocked people from traveling to the United States and legal challenges were mounted.
Included is a 90-day ban on travel to the U.S. by citizens of Iraq, Syria, Iran, Sudan, Libya, Somalia and Yemen. The U.S. refugee program is suspended for 120-days.
Trump's order imposed the most aggressive ban on Syrians, indefinitely blocking entry to the U.S. by anyone from that country, including those fleeing civil war.
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12:10 a.m.
Airlines around the world are turning away passengers, refunding tickets and rebooking flights in the aftermath of President Donald Trump's immigration order.
The order signed Friday included a 90-day ban on travel to the U.S. by citizens of Iraq, Syria, Iran, Sudan, Libya, Somalia or Yemen. It also suspended the U.S. refugee program for four months.
That forced airlines to tell some customers they couldn't proceed on flights to the U.S.
Dubai-based Emirates said a small number of its passengers were affected Saturday, and it was helping them rebook. Delta Air Lines and British Airways both said they were offering refunds for passengers who couldn't complete their trips.
Several airlines, including Qatar Airways, posted travel alerts on their websites warning customers about the changes.
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11:50 p.m.
In Tehran, Iranian Foreign Minister Mohammad Javad Zarif says his country's decision to not issue give Americans visas will not be retroactive.
Zarif says on Twitter: "Unlike the U.S., our decision is not retroactive. All with valid Iranian visa will be gladly welcomed."
U.S. visa restrictions that took effect on Saturday for people from several countries, including Iran, ban travel even for those who already had American visas.
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11:20 p.m.
Canadian Prime Minister Justin Trudeau has a message for refugees rejected by U.S. President Donald Trump: Canada will take you.
Trudeau tweeted Saturday "To those fleeing persecution, terror & war, Canadians will welcome you, regardless of your faith. Diversity is our strength #WelcomeToCanada ."
Trudeau also tweeted a picture of him greeting a Syrian child at Toronto's airport.
Trudeau oversaw the arrival of more than 39,000 Syrian refugees soon after he was elected in late 2015.
The young prime minister has been reluctant to criticize President Donald Trump. His government has been trying to balance his liberal view of the world while not offending the new Trump administration.
More than 75 percent of Canada's exports are to the U.S.
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10:20 p.m.
An Iraqi who was detained overnight at a New York City airport because of President Donald Trump's ban on refugees from certain Muslim nations has called America "the land of freedom" after being released from custody.
Hameed Khalid Darweesh worked as an interpreter for the U.S. Army when it invaded Iraq in 2003. Later he was a contract engineer for the U.S.
He was granted permission to relocate to the U.S., but was detained along with another traveler from Iraq after arriving at John F. Kennedy Airport Friday night.
Lawyers petitioned a federal court early Saturday to let them go. Two Democratic U.S. Representatives, Nydia Velazquez and Jerrold Nalder, were at the airport trying to get 11 other detainees released.
After he was freed Saturday, Darweesh told a waiting crowd that "America is the greatest nation, the greatest people in the world."
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9:50 p.m.
In Somalia, people are reacting with dismay and warnings that countries could retaliate against the United States' new immigration and visa policies with restrictive policies of their own.
"I am shocked beyond words. This will mean that my new husband will never be able to join me in the U.S.," said Fatima Ashkir, a Somali-American woman from Florida who came to Mogadishu to marry her Somali boyfriend.
Others say they are not surprised at President Donald Trump's executive order imposing a three-month ban on refugees from seven Muslim-majority countries, including Somalia.
"His intentions of hurting rather than to help were clear from the very beginning," said Ahmed Abdullahi, a university student in Mogadishu. "But you have to know that this will have a serious effect on relations between Americans and the Muslim world. A tit-for-tat response by Muslim countries, in which Americans could be barred from entering countries affected, is likely to be seen."
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8:30 p.m.
Iran's foreign ministry is suggesting the country will limit issuing visas to American tourists in retaliation for U.S. President Donald Trump's suspension of immigration and visas for nationals from Muslim countries including Iran.
The official IRNA news agency Saturday carried a statement by the Iranian foreign ministry that says Iran will resort to "counteraction" to Trump's executive order.
The statement says: "Iran, to defend the dignity of the great Iranian nation, will implement the principle of reciprocity until the removal of the insulting restriction against Iranian nationals."
The statement adds: "It will apply corresponding legal, consular and political actions."
The two countries have had no diplomatic relations since 1979 when militants stormed the U.S. embassy.
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8 p.m.
Cairo airport officials say five U.S.-bound Iraqi migrants from one family who have been prevented from boarding an EgyptAir flight to New York's John F. Kennedy airport would return to Iraq.
They said the five will spend Saturday night at Cairo airport and leave for Irbil, capital of Iraq's Kurdish region, Sunday morning.
They added that the sixth U.S.-bound migrant, a Yemeni national, left the airport to return to Cairo, where he resides.
The officials said Saturday's action by the airport was the first since President Donald Trump imposed a three-month ban on refugees from seven Muslim-majority countries: Iraq, Syria, Iran, Sudan, Libya, Somalia and Yemen.
The officials said the six migrants, escorted by officials from the U.N. refugee agency, were stopped from boarding the plane after authorities at Cairo airport contacted their counterparts in JFK airport.
The officials spoke on condition of anonymity because they were not authorized to brief the media.
(This story corrects the number of U.S.-bound Iraqi migrants to five, not six)
— Hamza Hendawi.
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7:05 p.m.
Dutch airline KLM says it has had to turn away seven would-be passengers because they would no longer have been accepted into the United States under President Donald Trump's ban on immigration from seven Muslim-majority nations.
Manel Vrijenhoek, at KLM's press office, said: "We would love to bring them there. That's not the problem. It's just that this is what the U.S. sprang on the rest of the world — that these people are no longer welcome."
She said the seven were due to fly with KLM from different airports around the world. Vrijenhoek said she had no specifics on their nationalities, although she confirmed they were from countries affected by the three-month immigration ban: Iraq, Syria, Iran, Sudan, Libya, Somalia and Yemen.
Trump signed the order Friday.
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6:40 p.m.
A U.S. federal law enforcement official says any non-U.S. citizen from Iraq, Syria, Iran, Sudan, Libya, Somalia or Yemen is now barred from entering the United States.
That covers legal permanent residents — green card holders — and visa-holders from those seven countries who are out of the United States after Friday, when President Donald Trump signed an executive order with the temporary ban. They cannot return to the U.S. for 90 days.
The official says there's an exemption for immigrants and legal permanent residents whose entry is in the U.S. national interest, but it's unclear how that exemption will be applied.
The official says visa and green card holders already in the U.S. will be allowed to stay.
The official wasn't authorized to publicly discuss the details of how Trump's order is being put in place and spoke only on condition of anonymity.
Customs and Border Protection is notifying airlines about passengers whose visas had been canceled or legal residents scheduled to fly back to the U.S., and the airlines are being told to keep them off those flights.
— Alicia Caldwell
___
6:35 p.m.
Israel's leader has endorsed President Donald Trump's plan to build a wall along the Mexican border.
Prime Minister Benjamin Netanyahu tweeted Saturday that Israel's wall along its border with Egypt has been successful in stopping a swell of African migrants.
"President Trump is right. I built a wall along Israel's southern border. It stopped all illegal immigration. Great success. Great idea," he wrote, with images of the Israeli and American flag.
The tweet marked a rare public foray for the Israeli leader into a charged American domestic affair. The two leaders spoke earlier this week and Netanyahu is planning to visit Trump in the White House next month.
After repeated clashes with President Obama, Netanyahu has high expectations for Trump, who has signaled he will take a kinder approach.
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5:45 p.m.
Malala Yousafzai, shot in the head by the Pakistani Taliban in 2012 to stop her campaigning for girls' education and co-winner of the 2014 Nobel peace prize, says she is heart-broken by U.S. President Donald Trump's ban on refugees from entering the United States for four months.
The order Friday suspends a program that saw around 85,000 people displaced by war, political oppression, hunger and religious prejudice resettled in the U.S. last year. Trump indefinitely blocked people fleeing Syria's civil war, and imposed a 90-day ban on U.S. entry from seven Muslim majority nations.
In a statement Saturday, Yousafzai implores Trump "not to turn his back on the world's most defenseless children and families."
Refugees and immigrants, she says, have "helped build your country."
Trump's mother was born in Scotland.
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5:15 p.m.
Qatar Airways is advising passengers bound for the United States from seven newly banned majority Muslim countries that they need to have either a U.S. green card or diplomatic visa to travel.
A statement on the company's website says: "Nationals of the following countries: Sudan, Libya, Somalia, Syria, Iran, Iraq, Yemen ... may travel to the U.S. only if they are in possession of a permanent resident card (Green card) or any of the below visas."
It listed foreign government, United Nations, international organization and NATO visas.
President Donald Trump has issued a 90-day ban on all entry to the U.S. from countries with terrorism concerns, including Syria, Iraq and Libya.
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3 p.m.
Cairo airport officials say seven U.S.-bound migrants — six from Iraq and one from Yemen — have been prevented from boarding an EgyptAir flight to New York's John F. Kennedy Airport.
The officials said the action Saturday by the airport was the first since President Donald Trump imposed a three-month ban on refugees from seven Muslim-majority countries: Iraq, Syria, Iran, Sudan, Libya, Somalia and Yemen.
The officials said the seven migrants, escorted by officials from the U.N. refugee agency, were stopped from boarding the plane after authorities at Cairo airport contacted their counterparts at the Kennedy airport.
The officials spoke on condition of anonymity because they were not authorized to brief the media.
— Hamza Hendawi.
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2:45 p.m.
The head of a leading refugee aid agency says President Donald Trump's decision to ban Syrian refugees hurts innocents fleeing violence.
Jan Egeland of the Norwegian Refugee Council tells The Associated Press on Saturday that Trump's decision "will not make America safer, it will make America smaller and meaner."
Trump on Friday suspended refugee admissions for four months and indefinitely banned those from war-torn Syria, pending program changes that are to ensure refugees won't harm national security.
Egeland says the decision dealt a "mortal blow" to the idea of international responsibility for those fleeing persecution. He says the U.S. is leading a "race to the bottom" in which politicians in wealth countries provide "zero moral leadership."
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1 p.m.
Iran's President Hassan Rouhani says the time has come for removing walls between nations rather that building new ones.
Rouhani did not name any particular country but his remarks come shortly after President Donald Trump's executive order Friday suspending all immigration and visa processes for nationals from a handful of countries with terrorism concerns, including Iran, for 90 days.
Rouhani said Saturday that, "It is not the day for creating distance among nations."
Speaking at a tourism conference broadcast on state TV, Rouhani said that those seeking to create such walls, "have forgotten that the Berlin Wall collapsed years ago."
___
12:30 p.m.
The International Rescue Committee is calling President Donald Trump's suspension of the U.S. refugee resettlement program a "harmful and hasty" decision.
In a statement issued late Friday night after the suspension was announced, IRC President David Miliband said, "America must remain true to its core values. America must remain a beacon of hope."
The IRC statement declared that the U.S. vetting process for prospective refugees is already robust — involving biometric screening and up to 36 months of vetting by "12 to 15 government agencies."
Miliband praised The United States' record as a resettlement destination and said, "This is no time for America to turn its back on people ready to become patriotic Americans." | With chaos reigning and scores of travelers being held in the nation's airports in the wake of President Trump's executive order banning travelers from seven countries, a federal judge issued an injunction barring the government from deporting anyone, reports Politico. During an emergency hearing Saturday night in Brooklyn, US District Court Judge Ann Donnelly appeared to focus on the timing, and Politico notes that the scope of her ruling is limited, applying to people who were already in transit when the executive order was made. "If they had come in two days ago, we wouldn't be here, am I right? ... These are all people who have been through a vetting process," she said. A federal judge in Alexandria, Va., also moved to block the deportation of green card holders being held at Dulles airport, as well as force the government to provide them with lawyers, while another judge in Seattle blocked the deportation of two immigrants being held until a hearing could take place. The Department of Homeland Security, meanwhile, said that green card holders from the affected nations were granted special exemption Saturday and allowed to enter the country, reports the AP. For his part, Trump had this to say: "It’s not a Muslim ban, but we were totally prepared. It’s working out very nicely. You see it at the airports, you see it all over." |
Buying Your Vote Dark Money and Big Data
May 20: Listen to ProPublica editor-in-chief Steve Engelberg talk to Kim Barker in a podcast about this story.
May 17: This post has been updated.
***
The same IRS office that deliberately targeted conservative groups applying for tax-exempt status in the run-up to the 2012 election released nine pending confidential applications of conservative groups to ProPublica late last year.
The IRS did not respond to requests Monday following up about that release, and whether it had determined how the applications were sent to ProPublica.
In response to a request for the applications for 67 different nonprofits last November, the Cincinnati office of the IRS sent ProPublica applications or documentation for 31 groups. Nine of those applications had not yet been approved—meaning they were not supposed to be made public. (We made six of those public, after redacting their financial information, deeming that they were newsworthy.)
On Friday, Lois Lerner, the head of the division on tax-exempt organizations, apologized to Tea Party and other conservative groups because the IRS’ Cincinnati office had unfairly targeted them. Tea Party groups had complained in early 2012 that they were being sent overly intrusive questionnaires in response to their applications.
That scrutiny appears to have gone beyond Tea Party groups to applicants saying they wanted to educate the public to “make America a better place to live” or that criticized how the country was being run, according to a draft audit cited by many outlets. The full audit, by the Treasury Department’s inspector general for tax administration, will reportedly be released this week. (ProPublica was not contacted by the inspector general’s office.) (UPDATE May 14: The audit has been released.)
Before the 2012 election, ProPublica devoted months to showing how dozens of social-welfare nonprofits had misled the IRS about their political activity on their applications and tax returns. Social-welfare nonprofits are allowed to spend money to influence elections, as long as their primary purpose is improving social welfare. Unlike super PACs and regular political action committees, they do not have to identify their donors.
In 2012, nonprofits that didn’t have to report their donors poured an unprecedented $322 million into the election. Much of that money — 84 percent — came from conservative groups.
As part of its reporting, ProPublica regularly requested applications from the IRS’s Cincinnati office, which is responsible for reviewing applications from nonprofits.
Social welfare nonprofits are not required to apply to the IRS to operate. Many politically active new conservative groups apply anyway. Getting IRS approval can help with donations and help insulate groups from further scrutiny. Many politically active new liberal nonprofits have not applied.
Applications become public only after the IRS approves a group’s tax-exempt status.
On Nov. 15, 2012, ProPublica requested the applications of 67 nonprofits, all of which had spent money on the 2012 elections. (Because no social welfare groups with Tea Party in their names spent money on the election, ProPublica did not at that point request their applications. We had requested the Tea Party applications earlier, after the groups first complained about being singled out by the IRS. In response, the IRS said it could find no record of the tax-exempt status of those groups — typically how it responds to requests for unapproved applications.)
Just 13 days after ProPublica sent in its request, the IRS responded with the documents on 31 social welfare groups.
One of the applications the IRS released to ProPublica was from Crossroads GPS, the largest social-welfare nonprofit involved in the 2012 election. The group, started in part by GOP consultant Karl Rove, promised the IRS that any effort to influence elections would be “limited.” The group spent more than $70 million from anonymous donors in 2012.
Applications were sent to ProPublica from five other social welfare groups that had told the IRS that they wouldn’t spend money to sway elections. The other groups ended up spending more than $5 million related to the election, mainly to support Republican presidential candidate Mitt Romney. Much of that money was spent by the Arizona group Americans for Responsible Leadership. The remaining four groups that told the IRS they wouldn’t engage in political spending were Freedom Path, Rightchange.com II, America Is Not Stupid and A Better America Now.
The IRS also sent ProPublica the applications of three small conservative groups that told the agency that they would spend some money on politics: Citizen Awareness Project, the YG Network and SecureAmericaNow.org. (No unapproved applications from liberal groups were sent to ProPublica.)
The IRS cover letter sent with the documents was from the Cincinnati office, and signed by Cindy Thomas, listed as the manager for Exempt Organizations Determinations, whom a biography for a Cincinnati Bar Association meeting in January says has worked for the IRS for 35 years. (Thomas often signed the cover letters of responses to ProPublica requests.) The cover letter listed an IRS employee named Sophia Brown as the person to contact for more information about the records. We tried to contact both Thomas and Brown today but were unable to reach them.
After receiving the unapproved applications, ProPublica tried to determine why they had been sent. In emails, IRS spokespeople said ProPublica shouldn’t have received them.
“It has come to our attention that you are in receipt of application materials of organizations that have not been recognized by the IRS as tax-exempt,” wrote one spokeswoman, Michelle Eldridge. She cited a law saying that publishing unauthorized returns or return information was a felony punishable by a fine of up to $5,000 and imprisonment of up to five years, or both.
In response, ProPublica’s then-general manager and now president, Richard Tofel, said, "ProPublica believes that the information we are publishing is not barred by the statute cited by the IRS, and it is clear to us that there is a strong First Amendment interest in its publication.”
ProPublica also redacted parts of the application to omit financial information.
Jonathan Collegio, a spokesman for Crossroads GPS, declined to comment today on whether he thought the IRS’s release of the group’s application could have been linked to recent news that the Cincinnati office was targeting conservative groups.
Last December, Collegio wrote in an email: “As far as we know, the Crossroads application is still pending, in which case it seems that either you obtained whatever document you have illegally, or that it has been approved.”
This year, the IRS appears to have changed the office that responds to requests for nonprofits’ applications. Previously, the IRS asked journalists to fax requests to a number with a 513 area code — which includes Cincinnati. ProPublica sent a request by fax on Feb. 5 to the Ohio area code. On March 13, that request was answered by David Fish, a director of Exempt Organizations Guidance, in Washington, D.C.
In early April, a ProPublica reporter’s request to the Ohio fax number bounced back. An IRS spokesman said at the time the number had changed “recently.” The new fax number begins with 202, the area code for Washington, D.C.
For more on the IRS and nonprofits active in politics, read our story on how the IRS's nonprofit division got so dysfunctional, Kim Barker's investigation, "How nonprofits spend millions on elections and call it public welfare", our Q&A; on dark money, and our full coverage of the issue.
We followed up on the issue, and the IRS sent this statement:
“When these two issues were previously raised concerning the potential unauthorized disclosures of 501(c)(4) application information, we immediately referred these cases to TIGTA [Treasury Inspector General for Tax Administration] for a comprehensive review. In both instances, TIGTA found these instances to be inadvertent and unintentional disclosures by the employees involved.”
The IRS did not respond to questions on who had been disciplined and how. TIGTA did not respond to requests for comment. ||||| Buying Your Vote Dark Money and Big Data
In a confidential 2010 filing, Crossroads GPS — the dark money group that spent more than $70 million from anonymous donors on the 2012 election — told the Internal Revenue Service that its efforts would focus on public education, research and shaping legislation and policy.
The group's application for recognition as a social welfare nonprofit acknowledged that it would spend money to influence elections, but said "any such activity will be limited in amount, and will not constitute the organization's primary purpose."
Political insiders and campaign-finance watchdogs have long questioned how Crossroads, the brainchild of GOP strategist Karl Rove, had characterized its intentions to the IRS.
Now, for the first time, ProPublica has obtained the group's application for recognition of tax-exempt status, filed in September 2010. The IRS has not yet recognized Crossroads GPS as exempt, causing some tax experts to speculate that the agency is giving the application extra scrutiny. If Crossroads GPS is ultimately not recognized, it could be forced to reveal the identities of its donors.
The tax code allows groups like Crossroads to spend money on political campaigns — and to keep their donors private — as long as their primary purpose is enhancing social welfare.
Crossroads' breakdown of planned activities said it would focus half its efforts on "public education," 30 percent on "activity to influence legislation and policymaking" and 20 percent on "research," including sponsoring "in-depth policy research on significant issues."
This seems at odds with much of what the group has done since filing the application, experts said. Within two months of filing its application, Crossroads spent about $15.5 million on ads telling people to vote against Democrats or for Republicans in the 2010 midterm elections.
"That statement of proposed activities does not seem to align with what they actually did, which was to raise and spend hundreds of millions to influence candidate elections," said Paul S. Ryan, senior counsel for the Campaign Legal Center, who reviewed the group's application at ProPublica's request.
Officials with Crossroads GPS would not answer specific questions about the material in the application or whether the IRS had sent a response to it.
"As far as we know, the Crossroads application is still pending, in which case it seems that either you obtained whatever document you have illegally, or that it has been approved," Jonathan Collegio, the group's spokesman, said in an email.
The IRS sent Crossroads' application to ProPublica in response to a public-records request. The document sent to ProPublica didn't include an official IRS recognition letter, which is typically attached to applications of nonprofits that have been recognized. The IRS is only required to give out applications of groups recognized as tax-exempt.
In an email Thursday, an IRS spokeswoman said the agency had no record of an approved application for Crossroads GPS, meaning that the group's application was still in limbo.
"It has come to our attention that you are in receipt of application materials of organizations that have not been recognized by the IRS as tax-exempt," wrote the spokeswoman, Michelle Eldridge. She cited a law saying that publishing unauthorized returns or return information was a felony punishable by a fine of up to $5,000 and imprisonment of up to five years, or both. The IRS would not comment further on the Crossroads application.
"ProPublica believes that the information we are publishing is not barred by the statute cited by the IRS, and it is clear to us that there is a strong First Amendment interest in its publication," said Richard Tofel, ProPublica's general manager.
ProPublica has redacted parts of the application to omit Crossroads' financial information.
With its sister group, the super PAC American Crossroads, Crossroads GPS has helped remake how modern political campaigns are financed.
American Crossroads, which does identify its donors, spent almost $105 million on election ads in the 2012 cycle. For its part, Crossroads GPS poured more than $70 million into ads and phone calls urging voters to pick Republicans — outlays that were reported to the Federal Election Commission. It also announced spending an additional $50 million on ads critical of President Barack Obama that ran outside the FEC's reporting window.
Based on the extent of Crossroads GPS' campaign activities, Obama's re-election campaign asked the FEC in June to force it to register as a political action committee and disclose its donors. The FEC has yet to rule on the request.
Politically active social welfare nonprofits like Crossroads have proliferated since the Supreme Court's Citizens United decision in January 2010 opened the door to unlimited political spending by corporations and unions.
Earlier this year, a ProPublica report showed that many of these groups exploit gaps in regulation between the IRS and the FEC, using their social welfare status as a way to shield donors' identities while spending millions on political campaigns. The IRS' definition of political activity is broader than the FEC's, yet our investigation showed many social welfare groups underreported political spending on their tax returns.
It's impossible to know precisely how Crossroads has directed its efforts, but the breakdown of expenses on its tax returns from June 2010 to December 2011 gives some indications.
During those 19 months, Crossroads spent a total of $64.7 million, of which $1.4 million — or just 2 percent — was identified as being spent on research. That compares with the 20 percent of effort Crossroads said it would devote to research in its application.
A tax return covering this year isn't due until November 2013.
The IRS rarely pursues criminal charges against nonprofits based on statements in their applications. It's more common for the agency to deny recognition or revoke a group's tax-exempt status.
In a letter to Congress in September, the IRS said it was engaged in "more than 70 ongoing examinations" of social welfare nonprofits. Earlier, in its work plan for the 2012 fiscal year, the agency said it was taking a hard look at social welfare nonprofits with "serious allegations of impermissible political intervention."
Campaign finance watchdog Fred Wertheimer, who runs Democracy 21 and has filed several complaints to the IRS about Crossroads, said the group's application for recognition showed why more aggressive enforcement is needed.
"When you read what they say on their application, there are a lot of words there. But I find them to be disingenuous and to have little to do with why Karl Rove founded this organization," Wertheimer said. "If you believe this is a social welfare organization, I have a rocket that can get you to the moon very quickly and at very little cost." ||||| Buying Your Vote Dark Money and Big Data
Jan. 4: This post has been updated.
Five conservative dark money groups active in 2012 elections previously told tax regulators that they would not engage in politics, filings obtained from the IRS show.
The best known and most controversial of the groups is Americans for Responsible Leadership, an Arizona-based organization. Not long after filing an application to the IRS pledging — under penalty of perjury — that it would not attempt to sway elections, the group spent more than $5.2 million, mainly to support Republican presidential candidate Mitt Romney.
The California Fair Political Practices Commission has accused Americans for Responsible Leadership of "campaign money laundering" for failing to disclose the origin of $11 million it funneled to a group trying to influence two state ballot propositions.
The other groups that filed applications for IRS recognition of tax-exempt status saying they wouldn't engage in politics are Freedom Path, Rightchange.com II, America Is Not Stupid and A Better America Now.
Much hangs on these applications, all of which are still pending. The tax code allows social welfare nonprofits to engage in political activities as long as public welfare, not politics, is their primary purpose. If the IRS ultimately decides not to recognize these groups, they could have to disclose their donors.
Such decisions, along with IRS' oversight of social welfare nonprofits overall, have come under increasing scrutiny as these groups have assumed an ever larger role in elections, pouring an unprecedented $322 million into the 2012 cycle.
ProPublica has documented how some social welfare nonprofits underreport their political activities, characterizing them to the IRS as "education" or "issue advocacy." Other groups have popped up, spent money on elections and then folded before tax regulators could catch up with them.
The IRS sent the applications submitted by the five groups to ProPublica in response to a public records request, although the agency is only required to supply these records after groups are recognized as tax-exempt. (ProPublica also obtained the pending application of Crossroads GPS, the dark money group launched by GOP strategist Karl Rove that spent more than $70 million on the 2012 elections, which we wrote about separately.)
The IRS confirmed that none of the groups had been recognized as tax-exempt and referred ProPublica to its earlier response about Crossroads' application. In that email, the IRS cited a law that says publishing unauthorized tax returns or return information is a felony punishable by up to five years in prison or a fine of up to $5,000, or both.
A lawyer for Americans for Responsible Leadership, Jason Torchinsky, cited the same law in an email.
"If you willfully to (sic) print or publish in any manner any information about Americans for Responsible Leadership that you do not lawfully possess — and which may or may not be complete — you will be doing so in violation of (the law) and we will not hesitate to report such unlawful publication to the appropriate law enforcement officials," Torchinsky wrote.
The other groups for which ProPublica obtained IRS applications did not respond to calls or emails for comment.
ProPublica has published the applications of all five groups, but redacted parts to omit financial information.
"As we said when we published our story on the Crossroads application, ProPublica believes that the information we are publishing is not barred by the statute cited by the IRS, and it is clear to us that there is a strong First Amendment interest in its publication," said Richard Tofel, ProPublica's president.
Social welfare nonprofits do not need IRS recognition, though most opt to apply for it. They can operate, and spend money on politics, while their applications are under consideration.
Americans for Responsible Leadership incorporated in Arizona in July 2011 and applied for IRS recognition last September.
By that time, the group had already spent $5,300 on get-out-the-vote efforts for Sen. Orrin Hatch, R-Utah, and given $57,500 to two Republican political committees in Arizona.
Nonetheless, its IRS application said the group hadn't spent any money to influence elections, nor would it. It also said the group planned to split its efforts between influencing policy and educating the public, in part by "promoting a more ethical and transparent government."
According to Federal Election Commission filings, the group spent more than $5.2 million on campaign activities in October and early November, mostly on phone calls urging the defeat of President Barack Obama. In addition to the millions it pumped into California ballot measures, the group also spent $1.5 million on two Arizona propositions.
While the IRS doesn't classify spending on ballot measures as political, California election authorities do.
When ProPublica read the group's description of its activities on its IRS application to Ann Ravel, the chairwoman of the California Fair Political Practices Commission, she laughed.
"Wow," she said, upon hearing that the group said it would not try to influence elections. "That's simply false."
The California commission pressed Americans for Responsible Leadership to identify who contributed the funds it aimed at the California ballot measures, a battle that reached the state Supreme Court. Just before Election Day, the court ordered the group to reveal its donors.
So, who were they? Another Arizona social welfare nonprofit, which got its money from a Virginia trade association, which also didn't have to report its donors. California regulators are still trying to peel back the group's layers, to see who's behind the money.
Update (Jan. 4): In a Jan. 2 email to the editor at the Arizona Capitol Times, Jason Torchinsky, an attorney for Americans for Responsible Leadership, said the group had submitted an amended application for recognition of tax-exempt status to the IRS that "corrected the error that was the central feature" of ProPublica's story.
Contacted by ProPublica, Torchinsky said he could not confirm that this was accurate without his client's authorization. Torchinsky also would not say when the group submitted the amended filing, or what was changed.
ProPublica has requested that Americans for Responsible Leadership provide us with the corrected application or give the IRS permission to do so. So far, we have not received a reply. | More trouble for the IRS: The same office that singled out conservative groups applying for tax-exempt status also leaked confidential information about conservative groups last year, ProPublica reports. How does ProPublica know? Well, because the nine pending applications were leaked to ProPublica in the first place. The investigative site had asked to see the applications for 67 nonprofits and the IRS' Cincinnati office sent over 31, nine of which had not been approved yet, meaning they were supposed to be confidential. ProPublica was interested in the applications because it was revealing how social-welfare nonprofits, which don't have to identify their donors and can spend money on elections as long as social welfare is their primary goal, misled the IRS when applying for tax-exempt status. Among the applications released to ProPublica: Karl Rove's Crossroads group, which had promised to spend only "limited" money on 2012 elections and ended up spending more than $70 million. Also included were five other groups that all claimed they would not spend any money to sway the elections and spent more than $5 million. ProPublica reported on all six (here and here). Interestingly, the New York Times reported today that Crossroads and other larger groups were not subjected to the same intense scrutiny the IRS applied to small Tea Party groups; click for more on that. |
CLOSE Skip in Skip x Embed x Share Mosquito control officials in Miami brace for the first locally aquired Zika virus transmitted by mosquito. AP
The CDC and the surgeon general have reiterated warnings to travelers of Rio about the mosquito-borne Zika virus. (Photo: Yuri Cortez, AFP/Getty Images)
Four people infected with Zika in South Florida likely contracted the virus from local mosquitoes, marking the first time the disease has been transmitted by the insects in the continental U.S., Florida Gov. Rick Scott said Friday.
Florida's Department of Health believes the mosquitos that transmitted the virus are active in a small area just north of downtown Miami, Scott said at a news conference in Orlando. No mosquitoes in the state have tested positive for Zika, he added.
The four Zika patients work in the same area, although not at the same company, and are not related, said Thomas Frieden, director of the Centers for Disease Control and Prevention.
“All the evidence we have seen indicates that this is mosquito-borne transmission that occurred several weeks ago in several blocks in Miami,” he said.
More than 1,650 people in the U.S. have contracted Zika, but until now all were linked to travel to areas outside the U.S. with outbreaks of the virus. Zika, which can cause devastating birth defects, is spreading rapidly in more than 30 countries and territories in the Caribbean and Latin America.
The virus primarily spreads through bites from infected mosquitoes, but can also be spread through sex. Only one in five people with Zika develop symptoms, which include rash, fever, muscle aches and headaches.
The four cases in South Florida involved one woman and three men in Miami-Dade and Broward counties, Scott said.
"If you live in this area and want to be tested, I urge you to contact the county health department, which stands ready to assist you," he said.
Florida Commissioner of Agriculture and Consumer Services Adam H. Putnam called on residents to eliminate any standing water around their homes, get rid of old tires in their yards that could hold water and make good use of insect repellant.
He said the situation in Florida is far different than in many Latin American countries, which may not have widespread use of air conditioning and window screens.
Florida Surgeon General Celeste Philip said officials don't believe expect ongoing transmission of the virus, but they will monitor the situation.
“As with most emerging health threats, we learn more about Zika each day, but we recognize that the unknown can be scary, especially for pregnant women," she said. "We’re committed to sharing as much as we can as soon as we can. Our top priority is the safety and well-being of all people in Florida."
Frieden said the CDC would continue to support Florida's efforts to investigate and respond to Zika cases and will reassess the situation and its recommendations daily.
The Food and Drug Administration on Thursday asked all blood centers in Miami-Dade, Broward and surrounding areas to stop taking donations until they can be tested for the virus.
Blood collection centers across the country also shouldn't accept any donations from people who have traveled to Miami-Dade and Broward counties within the past four weeks, the FDA added.
OneBlood, Florida's main blood supplier, said in a statement it would work as quickly as possible to comply with the FDA's "unanticipated" request. The company said it would start testing all its collections Friday.
CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Genetically modified mosquitoes could battle Zika virus in Florida | 0:47 Officials want to use the mosquitoes to combat Zika, but some residents question the safety of the modified pests. Video provided by Newsy Newslook 1 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Miami Doctors Monitor Zika Infected Pregnancy | 1:10 Doctors say that so far there the unborn baby girl's head is developing normally, but they will continue to monitor fetal development. (Oct. 23) AP 2 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Zika is no longer an international health emergency | 0:37 But the World Health Organization says this announcement doesn't mean the virus isn't still a threat. Newslook 3 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Zika Vaccine Trials Begin In Baltimore | 1:46 Zika vaccine trials began Tuesday at the University of Maryland’s School of Medicine in Baltimore. Some volunteers say they are doing it in hopes that pregnant women one day will not have to fear the virus linked to severe birth defects. (Sept. 13) AP 4 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Obama: Hopeful After Zika, Budget Talks | 1:08 President Obama wrapped up a meeting with congressional leaders Monday by declaring himself hopeful that an agreement can be struck to keep the government running and provide money to take care of the worsening Zika crisis. (Sept. 12) AP 5 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Miami residents voice support for Zika spraying | 1:17 Aerial insecticide spraying to combat mosquitoes carrying the Zika virus is underway in Miami Beach. Despite some residents’ opposition to the spraying, others think it is the right thing to do. (Sept. 9) AP 6 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Funding for Zika Stalled on Capitol Hill | 1:41 Senate leaders from both parties came out Wednesday blaming the other side for not getting a bill approved with much needed funding for Zika. (Sept. 7) AP 7 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Congressman brings mosquitoes to House floor | 0:34 "This is the fear of Floridians, right here" Time 8 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Ryan: Senate totally partisan with Zika funding | 0:35 House Speaker Paul Ryan called out Senate members for being 'blatantly political' in blocking Republican measures to fund Zika prevention. (Sept. 7) AP 9 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Residents Protest Zika Spraying in Miami | 0:37 Some residents in Florida protested the aerial spraying oF an insecticide called naled for the second time this week. The protests prompted officials to delay the spraying by a day to Friday. (Sept. 9) AP 10 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS WHO: Zika Virus Still Spreading | 1:17 The World Health Organization said Friday that the Zika virus remains an international health emergency, as the virus continues to spread to new countries. (Sept. 2) AP 11 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS The latest on Zika, from America’s point man on infectious diseases | 7:34 Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, discusses prospects for a Zika vaccine with USA TODAY medical reporter Liz Szabo. Rene Alston 12 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS A public health emergency is declared for Puerto Rico | 0:45 The U.S. Department of Health and Human Services has declared a public health emergency for Puerto Rico which will free up funding to help with the fight against the Zika virus. Kelly Jordan, USA TODAY 13 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Could massive flooding in Louisiana increase the risk for Zika? | 1:07 Once the floodwaters start to recede, there could be a different threat waiting. Video provided by Newsy Newslook 14 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Obama administration to transfer $34 million to fund Zika vaccine efforts | 0:38 Obama will transfer over $30 million to help with Zika vaccines. USA TODAY 15 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC encouraged by first aerial spraying for Zika | 1:44 The head of the U.S. Centers for Disease Control and Prevention says aerial spraying of the insecticide naled is killing many mosquitoes in a Miami neighborhood where the insects apparently transmitted Zika to 15 people. (Aug. 4) AP 16 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Obama: Zika is 'serious threat to Americans' | 2:10 As Zika escalates into a public health crisis, President Barack Obama on Thursday sought to pressure congressional Republicans over funding, encouraging voters to "call your members of Congress and tell them to do their job." (Aug. 4) AP 17 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Zika cases growing in Florida | 0:21 There are now 14 people with the Zika virus in south Florida. Florida Governor Rick Scott is calling on the CDC for an emergency response team. 18 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC: Killing Zika-Spreading Mosquito Difficult | 2:48 CDC director Dr. Tom Frieden said Tuesday that it is proving harder than expected to eradicate mosquitoes in an area of Miami where the insects have been found to be spreading the Zika virus. (Aug. 2) AP 19 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Pregnant women getting tested for Zika in Miami | 2:10 Fearing devastating birth defects associated with the Zika virus, hundreds of pregnant women living near downtown Miami are getting tested. Obstetricians are handing out kits that include bug spray with DEET. (Aug. 2) AP 20 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Raw: Mosquito Spraying in Miami's Wynwood Area | 0:59 Mosquito spraying continues in Miami's Wynwood section. It's believed mosquitoes infected 14 people in Florida with Zika, all in that area. Pregnant women are warned to stay away. Zika infections in pregnant women can cause birth defects. (Aug. 2) AP 21 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Florida's Zika problem could be much bigger than numbers suggest | 1:06 Florida announced a second wave of Zika cases from local mosquitoes. Ten more cases have been confirmed after the first four were announced Friday. Video provided by Newsy Newslook 22 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS First cases of locally transmitted Zika confirmed in Florida | 0:56 More than 1,600 cases have been reported in the continental U.S. alone. Video provided by Newsy Newslook 23 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Rubio urges federal government for Zika funding | 1:41 Florida Sen. Marco Rubio urged both Congress and the Obama administration to take action on funding to combat the spread of the Zika virus. (Aug. 3) AP 24 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Baby with Zika virus born in New Jersey | 0:47 On Tuesday officials at Hackensack University Medical Center in New Jersey revealed that a mother with the Zika virus gave birth to a baby with microcephaly at the hospital. USA TODAY 25 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS It looks like Zika Numbers have tripled in the U.S. in one week | 1:03 The Centers for Disease Control and Prevention now says pregnancies can be affected even if women don't show symptoms. Video provided by Newsy Newslook 26 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Rio Mayor Tries to Ease Zika Fears | 1:05 Visitors to this year's Olympic Games in Brazil are safe from the Zika virus, according to the Mayor of Rio de Janeiro, However, one medical expert disagrees. (May 16) AP 27 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS 6 Things To Know About Zika Virus | 2:39 CDC Director Dr. Tom Frieden answers questions about the Zika virus and new guidelines issued by the health agency on Friday. (Feb. 5) AP 28 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS White House taps Ebola funds to temporarily stave off Zika | 1:08 The Obama administration says transferring over $500 million from the Ebola fight still won't be enough to properly combat Zika.Video provided by Newsy Newslook 29 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS The fight against the Zika Virus starts with mosquito control | 3:21 Following a Dengue Fever outbreak in 2009 the Key West Mosquito Control District ramped up their domestic mosquito control program to target the Aedes aegytpi mosquito which is also the mosquito most responsible for spreading the Zika Virus. Kelly Jordan, USA TODAY 30 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Dr. Anthony Fauci warns funding stalemate threatens to slow effort to contain Zika virus | 10:50 NAIAD Director Dr. Anthony Fauci, the nation’s top expert on infectious diseases, warned that a continuing funding stalemate between the White House and Congress threatens to slow efforts to contain the Zika virus "to a dangerous level". 31 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS U.S. swimmers address Zika, Michael Phelps, Rio Olympics | 1:44 Members and hopefuls from the 2016 U.S. Olympic swimming team address concerns over the Zika virus, Michael Phelps' return and competing in the Olympics for the first time. USA TODAY Sports 32 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS AP: Insecticide Shipments Stopped As Zika Spread | 2:38 An Associated Press investigation has found that Brazil's fight against Zika was hampered last fall because the Health Ministry ran out of larvicide. Shipments across the country were suspended between August and October. (March 18) AP 33 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Olympic media summit: Zika virus on athletes' minds | 1:56 USA TODAY Sports' Rachel Axon recaps it all. 34 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Rio de Janeiro firefighters, drones join Zika battle | 1:07 Firefighters in the state of Rio de Janeiro will use drones to identify potential Zika mosquito breeding areas Video provided by AFP Newslook 35 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Zika: Pain and panic in Brazil | 4:28 USA Today Sports travels across Brazil and finds out what action is being taken to combat Zika and its potential heartbreaking complications. USA TODAY Sports 36 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS WHO director: Zika is 'mysterious and tricky virus' | 1:11 USA TODAY Sports' Martin Rogers reporting from Brazil, where the Director General of the World Health Organization is addressing the growing Zika virus crisis. USA TODAY Sports 37 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Fauci: US Transmission of Zika Expected | 2:08 Disease expert Dr. Anthony Fauci, said Friday that there have not yet been any cases of locally transmitted Zika virus in the continental United States, bud added he wouldn't be surprised if that changes. (Feb. 12) AP 38 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS US Olympic Teams Preparing for Zika Threat | 1:17 The CEO of USA Track and Field says Olympic teams are looking into ways to minimize the threat of the Zika virus when athletes travel to Rio de Janeiro for this year's Olympic games. (Feb. 11) AP 39 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Hopes for Zika Vaccine Trials By Late Summer | 1:04 The director of the U.S. National Institute of Allergy and Infectious Diseases (NIAID) says that he hopes to have a Zika vaccine enter a "Phase 1 clinical trial" by late summer. (Feb. 11) AP 40 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Pa. Student Has Recovered After Contracting Zika | 1:11 Lehigh University said in a message to students, staff and faculty on Wednesday that a student had traveled abroad over winter break and later tested positive for Zika virus, but has since recovered "and is feeling well." (Feb. 11) AP 41 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS USOC addresses Zika virus concerns | 0:47 The USOC will add disease specialists to address added concerns about the spread of the Zika virus in Rio. USA TODAY Sports 42 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC: Expect 'significant number' of Zika cases | 1:41 CDC Director Thomas Frieden told a congressional committee Wednesday that the U.S. should expect to see "significant numbers" of infections of the Zika virus in territories including Puerto Rico. (Feb. 10) AP 43 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Zika virus could keep Hope Solo out of Olympics | 0:56 Due to the spreading Zika virus, U.S. goalkeeper Hope Solo told SI.com, If I had to make the choice today, I wouldn't go [to the Olympics]." Time_Sports 44 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Officials confirm first case of Zika virus in Indiana | 2:40 Zika virus, which has been linked to thousands of birth defects in Latin America, has spread rapidly and made its way to North America. Indiana has its first confirmed case of the Zika virus, state health officials said Feb 9, 2016. (Produced by Joe Wochit 45 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS The White House is asking For $1.8B to counter The Zika virus | 0:56 The money would go to mosquito control programs, research for a vaccine, health services for low-income pregnant women and more. Newslook 46 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Brevard Officials Give Tips on Helping Fight Against Zika Virus | 0:47 Bruh-VARD County officials are enlisting help from the public to fight the spread of the ZEE-ka virus. Virginia Barker, the county's Natural Resources Management Department director, says best defense is to reduce standing water outdoors. The wate Wochit 47 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS FL Residents Take Steps to Prep Against Zika | 1:41 Preparing for a fight against the mosquito-born virus Zika, concerned residents in Florida hire exterminators and get educated. (Feb. 5) AP 48 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Experts Call For More Resources to Combat Zika | 1:57 President Barack Obama is asking Congress for more than $1.8 billion in emergency funding to fight the Zika virus and the mosquitoes that spread it here and abroad. (Feb. 8) AP 49 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Sexually transmitted Zika virus reported in Texas | 2:38 The Dallas County health department has confirmed two people in the Texas county have tested positive for the Zika virus. One patient had sexual contact with another infected individual; the other patient contracted the virus while in Venezuela. WFAA-TV 50 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Zika Spread Through Blood Transfusion in Brazil | 1:13 2 people in Brazil contracted the Zika virus through blood transfusions, a municipal health official says, presenting a fresh challenge to efforts to contain the virus on top of the disclosure of a case of sexual transmission in the US. (Feb. 4) AP 51 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Guarding your home from the Zika virus | 1:10 A USA TODAY motion graphic showing how to prevent your home from becoming a breeding ground for the Aedes mosquito, known to spread the Zika virus. Source: National Environmental Health Association Ramon Padilla Berna Elibuyuk and Liz Szabo, USA TODAY 52 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Expert: Majority of Blood Supply Safe from Zika | 1:27 With Brazilian officials confirming two people contracted Zika virus through blood transfusions, there is concern more cases could appear. Experts say there are ways to pre-screen blood donors to "cut down significantly on the risk." (Feb. 4) AP 53 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Doctor: Many More Will Be Infected With Zika | 1:20 A sexually transmitted case of Zika in Texas has scientists scrambling to understand how much of a risk infection through sex is for the usually mosquito-spread illness. (Feb. 4) AP 54 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Wisc Mother Shares Experience with Microcephaly | 2:22 The Zika virus is drawing worldwide attention to a devastating birth defect that until now has gotten little public notice. A Wisconsin mother is all too familiar with the condition_ her infant son has microcephaly. (Feb. 4) AP 55 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Olympic committee dealing with Zika virus | 0:56 Update on the Zika virus and how it may impact the Summer Olympics in Rio. USA TODAY Sports 56 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC Emergency Op. Center Tracks Zika Virus | 1:11 The Associated Press gets a look inside the Centers for Disease Control and Prevention, which is monitoring the spread of the Zika virus from their Emergency Operations Center. (Feb. 3) AP 57 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Health ministers convene in Uruguay over Zika | 0:43 Health ministers representing 15 countries from Latin America and the Caribbean gathered in the Uruguayan capital, Montevideo on Wednesday to discuss a common policy to combat the regional expansion of the Zika virus. (Feb. 3) AP 58 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS 5 things to know about Zika virus | 1:00 Zika virus, which has been linked to thousands of birth defects in Latin America, has spread rapidly and made its way to North America. Here are five things you need to know about the virus. VPC 59 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Genetically modified mosquitoes released to take on Zika Virus | 2:07 Feb. 3 -- A small British biotech firm is taking a leading role in the fight against the Zika virus - by releasing genetically modified mosquitoes into affected areas. Bloomberg's Tom Mackenzie visited their breeding lab near Oxford to find out more Bloomberg 60 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Dallas County Patient Gets Zika Virus From Sex | 1:19 Health officials say a patient in Dallas County, Texas, has acquired the Zika virus through sex. Officials confirm the patient was infected after having sexual contact with an ill person who returned from a country where Zika was present. (Feb. 3) AP 61 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS WHO Expert says Zika Vaccine Likely "Years Away" | 1:22 A senior World Health Oranization (WHO) doctor on Tuesday told journalists that a vaccine for the Zika virus "may be years not months away." Dr. Antony Costello said it depends on the biology of the virus. (Feb. 2) AP 62 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Brevard Prepared to Fend Off Zika Virus | 0:30 The World Health Organization announced on Monday that the explosive spread of the Zika virus in the Americas is an "extraordinary event" that merits being declared an international emergency. (Feb. 1) AP The same type of mosquito spreading the Zik Wochit 63 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Sexually transmitted Zika virus reported in Texas | 2:38 The Dallas County health department has confirmed two people in the Texas county have tested positive for the Zika virus. One patient had sexual contact with another infected individual; the other patient contracted the virus while in Venezuela. 64 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS WHO declares Zika outbreak a global emergency | 1:55 The World Health Organization announced on Monday that the explosive spread of the Zika virus in the Americas is an "extraordinary event" that merits being declared an international emergency. (Feb. 1) AP 65 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Zika virus: 5 things you need to know | 1:00 Zika, a virus transmitted through mosquito bites, is affecting multiple countries in Latin America, and is expected to spread to the U.S. VPC 66 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Zika virus prompts Brazilian petition For more legal abortion access | 1:09 The Zika virus outbreak in Brazil prompted a petition for more access to legal abortion. Video provided by Newsy Newslook 67 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS WHO Holds Crisis Meeting on Zika Virus | 1:28 The World Health Organization (WHO) has begun a crisis meeting considering whether the explosive spread of the mosquito-borne Zika virus, which is linked to birth defects in the Americas, should be declared a global health emergency. (Feb. 1) AP 68 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Expert Says Zika Outbreak Not Likely in the U.S. | 1:45 Dr. Anthony S. Fauci, the Director of the National Institute of Allergy and Infectious Diseases, said the chances of a Zika outbreak in the United States is not likely. Fauci spoke at a luncheon event in Washington, DC on Friday. (Jan. 29) AP 69 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Heat, Poverty, Fuel Brazil Zika Outbreak | 1:29 In Recife, Brazil, the epicenter of the country's Zika outbreak, authorities struggle to control the mosquitoes that spread the virus, while families struggle with birth defects that may be linked to the disease. (Jan. 29) AP 70 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Mosquitoes are spreading a rare virus | 0:44 In the past year, Zika has spread from Africa and Asia through the Americas. In Brazil, the number of infants born with shrunken, malformed brains has gone up by a factor of 10 since Zika entered the country. USA TODAY 71 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC: Pregnant Women at Greatest Risk for Zika | 3:34 Officials at the Centers for Disease Control and Prevention are warning pregnant women to postpone travel plans to areas where Zika virus has been reported in the hopes of reducing risks of birth defects and spread of virus. (Jan. 28) AP 72 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Concerns Zika Virus Could Spread Through Americas | 2:33 The Zika virus, which is spread by mosquitoes, has been found in nearly two dozen Latin American countries. The virus is suspected of causing birth defects. Health officials are concerned it could spread to the US and Canada. (Jan. 28) AP 73 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Rio Olympics monitoring spread of Zika virus | 0:35 With the Rio Olympics seven months away, daily inspections of stagnant water in Brazil are ongoing where mosquitoes spread the Zika virus. 74 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS WHO To Hold Emergency Session on Zika Virus | 2:14 The World Health Organisation (WHO) on Thursday said it was convening an emergency committee on Monday to decide if the Zika virus outbreak should be declared an international health emergency. (Jan. 28) AP 75 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Recruiting Students in Fight Against Zika | 2:51 The mosquitoes that can spread Zika are already buzzing among us. The U.S. government could use some help figuring out exactly where. No experience is necessary for what the USDA envisions as a nationwide experiment in citizen-science. (May 16) AP 76 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC Discusses Rise in Emerging Zika Virus | 2:09 The CDC says there is growing concern about the emerging, mosquito-borne Zika virus after a surge in cases of a rare brain defect among babies in Brazil. Although cases of the Zika virus are still rare in the U.S., they're on the rise. (Jan. 20) AP 77 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Texas border town prepares for Zika outbreak | 2:00 The U.S./Mexico border town of Brownsville, Texas is preparing for a full-on outbreak of the Zika virus as cases trickle north. 78 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Fighting the ZIka Virus with tiny fish | 0:45 The Florida Keys Mosquito Control District is fighting the Zika Virus with a tiny fish called gambusia or mosquitofish. The gambusia eat the larvae of the Aedes aegypti mosquito which is the one most responsible for the spread of the Zika Virus. Kelly Jordan, USA TODAY 79 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC: Zika definitely causes severe birth defects | 1:28 US health officials say there is no longer any doubt that the Zika virus causes babies to born with abnormally small heads and other severe brain defects. (April 13) AP 80 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Miami-Dade Takes Steps to Prevent Spread of Zika | 1:49 After the Centers for Disease Control announced a more ominous situation of the Zika virus, Miami-Dade officials are trying to be proactive in managing its spread, evaluating waterlogged areas and trying to control mosquito populations. (April 12) AP 81 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS Miami-Dade Officials Proactive Against Zika | 0:59 Miami-Dade Officials Proactive Against Zika AP 82 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS 5 things you may not know about the Zika virus | 1:04 The CDC announced that the Zika virus may be 'scarier than we initially thought,' saying the mosquito-borne virus could be linked to more birth defects than previously believed. 83 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC: Zika virus scarier than we thought | 1:36 The Centers for Disease Control and Prevention said Puerto Rico could see "hundreds of thousands of cases of Zika virus." Officials also said the rest of the country needs to be prepared for possible outbreaks. (April 11) AP 84 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS White House Urges Congress to Act on Zika | 1:35 The Obama administration has been urging Congress to come up with nearly $2 billion dollars in emergency funding to combat the Zika virus. Wednesday, it announced that it's transferring leftover money from the recent fight against Ebola. (April 6) AP 85 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC Hosts Zika Action Plan Summit in Atlanta | 1:57 The CDC hosted hundreds of state and local officials and experts for the Zika Action Plan Summit to provide information and tools to improve preparedness and response to the Zika virus. (April 1) AP 86 of 87 CLOSE Skip in Skip x Embed x Share ZIKA VIRUS IN THE NEWS CDC: Sex can wait if you've been near Zika | 1:22 Americans who might have been exposed to Zika and are trying to get pregnant should know these new government guidelines. 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Read or Share this story: http://usat.ly/2ahmqaz ||||| With Zika moving through nearly every country in the Western Hemisphere over the past year and a half, it was only a matter of time before the virus made its way to the continental US.
At the end of July, health officials announced that a handful of Zika infections had originated from mosquitoes in Miami, Florida. As of August 22, there were 37 locally-acquired cases in Florida, mostly concentrated in a one square mile area of Miami's Wynwood neighborhood.
Zika was discovered in the 1940s, but most people had never heard of it until last year. That's because for decades, Zika outbreaks were sporadic and tiny, and the disease seemed to do little harm.
That changed in 2015. A massive outbreak in Brazil altered the scientific community's view of the mosquito-borne virus. Scientists learned that Zika can actually be a lot more dangerous than anyone thought, causing devastating birth defects in fetuses and even miscarriages. In light of that, the World Health Organization declared a public health emergency on February 1 this year.
Meanwhile, the virus has been on the move. To date, more than 60 countries and territories have reported mosquito transmission of the virus, and 11 countries have seen sexual transmission of Zika. The US is only the latest country to grapple with a Zika virus outbreak.
1) Zika is spreading locally in Florida — but don't expect it to go very far
Here's a quick recap of what's going on in Florida, the only state so far with native Zika transmission: On July 19, health officials announced that a woman living in Miami-Dade County, Florida, had tested positive for the mosquito-borne and sexually transmitted virus. But unlike all of the other Zika cases reported in the US at the time, she had no travel history to a country with Zika.
Since then, a small number of people in the area seem to have been similarly infected by local mosquitoes. The 37 cases are mostly concentrated in a one square mile area of Miami's Wynwood neighborhood.
But the virus is spreading. On August 19, health officials confirmed that five new cases had sprung up in the Miami Beach area — outside the one square mile in Wynwood. Another case has since popped up near Tampa, on the other side of Florida.
In response, the CDC expanded their travel advisory, warning pregnant women to avoid the part of Miami Beach where Zika is spreading, as well as the Wynwood area. They've also advised pregnant women and their partners to consider avoiding nonessential travel to Miami-Dade. According to the New York Times, this is likely to "threaten tourism in South Florida and deepen fears among pregnant women living in the area."
A small Zika outbreak in Florida wouldn't exactly be surprising. Zika has been identified in mosquitoes in more than 60 countries and territories over the past year, and the CDC has warned that the southeastern part of the US — particularly Florida and Texas — was at risk of outbreaks during mosquito season this year. It’s the region where the Zika-carrying Aedes aegypti mosquitoes thrive in the greatest concentrations.
There have already been more than 2,200 travel-related Zika cases in the US, while some 8,000 people in US territories (mainly Puerto Rico) have acquired the virus locally.
But don't panic. Officials expect that Zika will likely follow the same pattern in the continental US as dengue fever, leading to small outbreaks in the southeastern US.
"Better housing construction, regular use of air conditioning, use of window screens and door screens and state and local mosquito control efforts helped to eliminate [mosquito-borne infections like malaria] from the mainland," said Lyle Petersen, director of the CDC's division of vector-borne diseases, in a statement this year. All these factors are expected to prevent widespread transmission here.
2) About 80 percent of people don't experience any symptoms with Zika
The vast majority of people who get Zika won’t even know they have it. A minority — roughly 20 percent — show relatively minor symptoms: a low-grade fever, sore body, and headache, as well as red eyes and a body rash. More rarely, this might include abdominal pain, nausea, and diarrhea. These symptoms usually appear two to 12 days after a bite and go away within a week, and with the same type of care as the flu — bed rest, fluids, etc.
There’s no vaccine or cure for the virus. But severe disease requiring hospitalization is uncommon, as is death from the virus. Once a person has been infected with Zika, they are thought to develop lifelong immunity.
But that's not the whole story. In rare occasions, Zika causes really serious health complications.
In both the Brazil and French Polynesia outbreaks, researchers noted that some people infected with the virus were later diagnosed with Guillain-Barré, a rare and sometimes deadly neurological condition in which people's immune systems damage their nerve cells, leading to muscle weakness and even paralysis. The symptoms can last weeks, months, or even years.
Again, though, this is rare: about one in 4,000 Zika cases, according to the WHO. And it’s not unique to Zika. Other viral diseases — like dengue and chikungunya — also cause Guillain-Barré.
More worryingly, Zika seems to have a particular appetite for the neurological cells of fetuses. When a pregnant woman catches the virus, her fetus faces a risk of severe birth defects, including microcephaly, which is characterized by a shrunken head and incomplete brain development.
The association between microcephaly and Zika has been seen in this outbreak in Brazil, as well as in reanalyses of the data from previous outbreaks, such as one in the French Polynesian islands in 2013 to 2014.
In addition, researchers have found that the virus seems to kill off the tissue in entire regions of the fetus’s brain, damage babies' eyes and ears, and heighten the risk of miscarriage.
3) One percent of pregnant women who get Zika will have birth complications
The risk of birth complications is low. The WHO estimates that the fetuses of one in 100 women with Zika will go on to develop microcephaly or other abnormalities. And researchers believe the risks of Zika-related birth defects are greatest if a woman is infected in the first trimester of her pregnancy.
Zika isn’t the first virus to cause microcephaly. Rubella famously caused an epidemic of birth defects before the advent of the vaccine, and cytomegalovirus (CMV) can damage fetuses too.
But Zika is the first mosquito-borne virus to threaten fetuses. And even if these birth defects turn out to be a very rare complication of Zika, the risk to fetuses was enough to prompt the WHO to declare a rare global public health emergency earlier this year.
4) We don't fully understand all the ways Zika spreads
Zika is mainly carried by a specific type of mosquito called Aedes aegypti, which spreads the disease through bites.
What makes the Aedes aegypti a unique threat is that it is remarkably effective at carrying viruses — it's also the primary vector of the yellow fever, dengue, and chikungunya viruses.
Aedes mosquitoes are incredibly well-adapted to thrive alongside humans. They can breed and rest in small pools of water and moist environments around people's homes. (You can see examples of the mosquito's main aquatic habitats here, ranging from rain-filled cavities in trees to outdoor pots and animal drinking pans.) This is different from other types of mosquitoes, which prefer larger bodies of water.
Mosquito transmission, while thought to be the primary method, is not the only way to spread the virus.
As we’ve discussed already, Zika can also be passed from mother to child.
And it can be spread through sex. There have been more than 20 cases of Zika sexual transmission in 10 countries, involving oral, anal, and vaginal sex, and the virus has been shown to spread from women to men, men to men, and men to woman.
People can contract Zika through blood transfusions. In Brazil, there have been multiple reports of Zika spreading through blood transfusions, according to the CDC.
Finally, it's possible Zika can spread through saliva or urine, since live virus has been isolated from these bodily fluids, but there’s not a lot of clarity yet about this mode of transmission.
Researchers are also exploring other potential routes Zika spreads. In a mysterious recent case in Utah, a man who died from Zika passed it on to his caregiver, though the two didn’t engage in sex (the caregiver was reportedly the man’s son) and officials don't believe Aedes mosquitoes, which carry the virus, were involved, since they aren’t established in Utah.
5) Zika can be sexually transmitted — but simple precautions can reduce the risk
The virus stays in the blood for 11 days on average, and potentially much longer in other bodily fluids.
In men, the virus can persist in semen for more than 180 days (though it's unclear for how long it remains infectious). In women, researchers have found Zika in vaginal fluid 11 days after a woman showed symptoms of infection.
According to Margaret Honein, the CDC’s co-lead of the Pregnancy and Birth Defects Task Force for the Zika response, the latest reported time that a man was able to spread the virus through sex after a Zika illness was between 32 and 41 days.
6) Women exposed to Zika should wait at least eight weeks before becoming pregnant
First things first: If you’re pregnant, avoid mosquito bites, practice safe sex with your partner, and stay out of areas where the virus is spreading.
Researchers believe pregnant women are at the greatest risk of having babies with birth defects if they are infected in the first trimester. (More from the CDC here.)
For couples who are thinking of becoming pregnant soon, the CDC’s recommendations for waiting to conceive vary depending on your likelihood of infection:
7) Men should avoid infecting a partner who may become pregnant
Again, the most important risk is really to pregnant women and their babies. So for men, the key concern is infecting a partner with Zika who may become pregnant. Either abstain from sex or use condoms for at least a period of eight weeks if you were in a place with Zika but showed no signs of infection, and up to six months if you had symptoms or were diagnosed with the virus (see the above chart for details).
8) If you're at risk of Zika, clean up your house, wear mosquito repellent, and practice safe sex
Since Zika is carried by mosquitoes and there's no vaccine, the best way to prevent outbreaks is to prevent mosquitoes that carry the virus from biting people.
The Aedes mosquitoes that carry Zika prefer small bodies of water around people's homes, so there are measures you can take to really limit mosquitoes' habitats, says Janet McAllister, a researcher in the division of vector-borne diseases at the CDC.
McAllister recommends "just generally keeping your yard clean and in shape, getting rid of debris or things stored outside that can hold water, or adjusting them so that they no longer hold water." She adds, "It's also important to maintain the vegetation in your yard — to keep the grass mowed and bushes trimmed, with good air flow."
Inside the home, the CDC recommends making sure you have screens on windows and doors that aren't punctured in any way. Wearing protective clothing, using insect repellents, and keeping your house cool with air conditioning also helps.
Since Zika can be spread through sexual contact, practicing safe sex (using condoms) with partners that may have come into contact with the virus is recommended, too. (See points 6 and 7.)
9) Before 2007, there were only 14 documented Zika cases
Zika is actually an old virus that only recently began to worry health experts. It was discovered in 1947 when it was isolated from monkeys in the Zika forest in Uganda. And for decades thereafter, it seemed to be barely bother humans.
Prior to 2007, there were only 14 documented Zika cases. But then the first big outbreak erupted on Yap island in Micronesia, with 49 confirmed cases. And from there, the virus was on the move.
Soon cases popped up in other Pacific islands, including a large outbreak in 2013-'14 in French Polynesia (388 cases). By May 2015, health officials had detected the virus in Brazil.
Zika has since spread to more than 60 countries and territories — mostly concentrated in Central and South America and the Caribbean.
All this means that we're in the throes of the biggest Zika outbreaks in history, and there's still a lot we have to learn about the virus.
Save | The troubling signs have been building up, and on Friday, health officials confirmed: Florida mosquitoes are transmitting the Zika virus, the first time the virus has been known to be transmitted in the continental US. Four people so far in Miami-Dade and Broward counties have gotten the virus from local mosquitoes, state health officials have confirmed, although they have not yet been able to trap any mosquitoes that have tested positive for the virus. "If you live in this area and want to be tested, I urge you to contact the county health department, which stands ready to assist you," Florida Gov. Rick Scott said at a press conference, per USA Today. Officials believe local transmission is so far confined to one single ZIP code, but an investigation continues to determine whether others are infected, and there are restrictions on blood donations from donors who live in or have recently traveled to the affected area. Officials have long stated that though US transmission of the virus was inevitable, the problem won't be as widespread as it is in other areas, thanks to mosquito-control efforts, improved housing construction, window and door screens, and the proliferation of air-conditioning. Vox offers up nine reasons not to panic, including the fact that only 1% of pregnant women who get Zika will experience complications with their babies. |
In the last decade, weapon systems have increasingly been developed, produced, and marketed internationally through government-sponsored cooperative development programs and a variety of industry linkages. These linkages include international subcontracting, joint ventures, teaming arrangements, and cross-border mergers and acquisitions. Also, the Department of Defense (DOD) and other agencies have shared certain highly classified information with allied governments. U.S. government policy allows foreign investment as long as it is consistent with national security interests. Foreign companies from many countries have acquired numerous U.S. defense companies and have legitimate business interests in them. Some of these foreign-owned companies are working on highly classified defense contracts, such as the B-2, the F-117, the F-22, and military satellite programs. Recognizing that undue foreign control or influence over management or operations of companies working on sensitive classified contracts could compromise classified information or impede the performance of classified contracts, DOD requires that foreign-owned U.S. firms operate under control structures known as voting trusts, proxy agreements, and special security agreements (SSA). Each of these agreements requires that the foreign owners select and DOD approve cleared U.S. citizens to be placed on the board of directors of the foreign-owned company to represent DOD’s interests by ensuring against (1) foreign access to classified information without a clearance and a need to know and (2) company actions that could adversely affect performance on classified contracts. In February 1995, the government issued the National Industrial Security Program Operating Manual (NISPOM) to replace the DOD Industrial Security Manual and various agencies’ industrial security requirements. The NISPOM’s section dealing with foreign ownership, control, or influence (FOCI) contains many provisions on voting trusts, proxy agreements, and SSAs similar to those in the DOD Industrial Security Regulation (ISR). The ISR will continue to apply in its current form until it is amended to reflect the NISPOM. Both the ISR and NISPOM require a company to obtain a facility clearance before it can work on a classified DOD contract and prescribe procedures for defense contractors to protect classified information entrusted to them. DOD’s policy provides that a firm is ineligible for a facility clearance if it is under FOCI. However, such a firm may be eligible for a facility clearance if actions are taken to effectively negate or reduce associated risks to an acceptable level. When the firm is majority foreign-owned, the control structures used to negate or reduce such risks include voting trusts, proxy agreements, and SSAs. The Defense Investigative Service (DIS) administers the DOD Industrial Security Program and is required to conduct compliance reviews of defense contractors operating under voting trusts, proxy agreements, and SSAs. This oversight function requires a DIS security inspection of the cleared facility every 6 months and an annual FOCI review meeting between DIS and the trustees of the foreign-owned firm. These reviews are aimed at ensuring compliance with special controls, practices, and procedures established to insulate the facility from foreign interests. Under a voting trust agreement, the foreign owners transfer legal title to the stock of the foreign-owned U.S. company to U.S. citizen trustees. Under the ISR and NISPOM, voting trusts must provide trustees with complete freedom to exercise all prerogatives of ownership and act independently from the foreign owners. Under the ISR and NISPOM, five actions may require prior approval by the foreign owner: the sale or disposal of the corporation’s assets or a substantial part thereof; pledges, mortgages, or other encumbrances on the capital stock of the corporate mergers, consolidations, or reorganization; the dissolution of the corporation; or the filing of a bankruptcy petition. Under the ISR, the trustees were to act independently without consultation with, interference by, or influence from the foreign owners, but the NISPOM allows for consultation between the trustees and foreign owners. The proxy agreement is essentially the same as the voting trust, with the exception of who holds title to the stock. Under the voting trust, the title to the stock is transferred to the trustees. Under the proxy agreement, the owners retain title to the stock, but the voting rights of the stock are transferred to the DOD-approved proxy holders by a proxy agreement. The powers and responsibilities of the proxy holders are the same as those of the trustees under a voting trust. From a security or control perspective, we saw no difference between the voting trust and the proxy agreement. DOD and company officials stated that from the companies’ perspective, the difference between these two agreements is largely a tax issue. The third type of control structure for majority foreign-owned firms is the SSA. Unlike a voting trust or proxy agreement, the SSA allows representatives of the foreign owner to be on the U.S. contractor’s board of directors. This representative, known as an inside director, does not need a DOD security clearance and can be a foreign national. In contrast, outside directors are U.S. citizens and must be approved by and obtain security clearances from DOD. Under DOD policy, outside directors are to ensure that classified information is protected from unauthorized or inadvertent access by the foreign owners and that the U.S. company’s ability to perform on classified contracts is not adversely affected by foreign influence over strategic decision-making. Because SSAs allow the foreign owners a higher potential for control over the U.S. defense contractor than proxies or voting trusts, firms operating under SSAs are generally prohibited from accessing highly classified information such as Top Secret and Sensitive Compartmented Information. However, DOD can grant exceptions to this prohibition and can award contracts at these highly classified levels if it determines it is in the national interest. DOD. The visitation agreement was to identify the representatives of the foreign owners allowed to visit the cleared U.S. firm, the purposes for which they were allowed to visit, the advance approval that was necessary, and the identity of the approval authority. In 1993, DOD eliminated visitation agreements as separate documents and incorporated visitation control procedures as a section of each voting trust, proxy agreement, and SSA. Voting trust agreements, proxy agreements, SSAs, and their attendant visitation agreements are negotiated between the foreign-owned company and DOD. Although DOD has boilerplate language that can be adopted, according to a DOD official, many cases have unique circumstances that call for flexible application of the ISR provisions. DOD’s flexible approach leads to negotiations that can result in company-specific agreements containing provisions that provide stronger or weaker controls. Generally, the foreign owners negotiate to secure the least restrictive agreements possible. DOD has approved more lenient visitation agreements and procedures over time. A DOD official explained that DOD’s flexible approach to FOCI arrangements and the resulting negotiations have probably caused the visitation controls to become relaxed. Each negotiated visitation agreement that relaxed controls became the starting point for subsequent negotiations on new agreements as the foreign-owned companies’ lawyers would point to the last visitation agreement as precedent. We recognize the need to tailor the agreements to specific company circumstances and to permit international defense work, but the lack of a baseline set of controls in the agreements made DIS inspections very difficult, according to DIS inspectors. Almost all the foreign-owned U.S. firms we reviewed possessed unclassified information and technologies that are export-controlled by the Departments of State and Commerce. DOD deemed some of these technologies to be militarily critical, such as carbon/carbon material manufacturing technology and flight control systems technology. Many classified defense contracts involve classified applications of unclassified export-controlled items and technologies. The ISR and most agreements were not designed to protect unclassified export-controlled information. As such, DIS does not review the protection of unclassified export-controlled technology during its inspections of cleared contractors. In fact, the U.S. government has no established means to monitor compliance with and ensure enforcement of federal regulations regarding the transfer of export-controlled technical information. In light of what is known about the technology acquisition and diversion intentions of certain allies (see ch. 2) and the high degree of contact with foreign interests at foreign-owned U.S. defense contractors (see ch. 3), enforcement of export control regulations is important. The new NISPOM reflects this concern and requires trustees in future voting trusts, proxy agreements, and SSAs to take necessary steps to ensure the company complies with U.S. export control laws. As of August 1994, 54 foreign-owned U.S. defense contractors were operating under voting trusts, proxy agreements, or SSAs. Six of these companies operate under voting trusts, 15 under proxy agreements, and 33 under SSAs. These 54 firms held a total of 657 classified contracts, valued at $5.4 billion. The largest firm operating under these agreements (as measured by the value of the classified contracts it held) is a computer services company that operates under a proxy agreement and held classified contracts valued at $2.5 billion. The foreign owners of the 54 firms are from Australia, Austria, Canada, Denmark, France, Germany, Israel, Japan, the Netherlands, Sweden, Switzerland, and the United Kingdom. Currently, three of the companies are wholly or partially owned by foreign governments. Our review was conducted at the request of the former Chairman and Ranking Minority Member, Subcommittee on Oversight and Investigation, House Committee on Armed Services (now the House Committee on National Security). Our objective was to assess the structure of voting trusts, proxy agreements, and SSAs and their implementation in the prevention of unauthorized disclosure of classified and export-controlled information to foreign interests. We did not attempt to determine whether unauthorized access to classified or export-controlled data/technology actually occurred. Rather, we examined the controls established in the ISR, the draft NISPOM, and the agreements’ structures and the way they were implemented at each of 14 companies we selected to review. We discussed security issues involving foreign-owned defense contractors and information security with officials from the Office of the Deputy Assistant Secretary of Defense (Counterintelligence, Security Countermeasures and Spectrum Management); DIS; and information security officials from the Air Force, the Army, and the Navy. We also discussed the performance of Special Access and Sensitive Compartmented contracts by foreign-owned companies with an official from the office of the Assistant Deputy Under Secretary of Defense (Security Policy). To obtain information on the threat of foreign espionage against U.S. defense industries, we interviewed officials and reviewed documents from the Central Intelligence Agency (CIA), Defense Intelligence Agency (DIA), and Federal Bureau of Investigation (FBI). In selecting the 14 companies for our judgmental sample, we included 5 companies that were wholly or partially owned by foreign governments. We selected the nine additional foreign-owned firms on the basis of (1) the sensitivity of the information they held, (2) agreement types, (3) country of origin, and (4) geographic location. One company we reviewed operated under a voting trust, five operated under proxy agreements, and six operated under SSAs. In addition, one firm transitioned from an SSA to a proxy agreement during our review, and we found that another firm operated under a different control structure, a memorandum of agreement (MOA). Table 1.1 shows the countries of ownership and agreement type of the companies we reviewed. This judgmental sample reflects the distribution of agreement type and country of ownership of the 54 companies operating under voting trusts, proxy agreements, and SSAs. However, due to the small size of our sample and the nonrandom nature of its selection, the results of our review cannot be projected to the universe of all companies operating under these agreements. We were initially told that an aerospace company operated under an SSA, and selected the company for our sample based on foreign government ownership of companies that are its partial owners. We subsequently learned that the company operated under a unique arrangement—an MOA . Because of the foreign government ownership component and the sensitivity of the information accessed by this aerospace company, we retained the company in our sample. When we present statistics in our report on the number of companies operating under voting trusts, proxy agreements, and SSAs and the number of contracts they hold and the contracts’ value, this company is not included in those numbers.However, we include the company in the discussions of control structures and their implementation (see chs. 3 and 4). In those instances, we specifically refer to the MOA. We compared the agreements of the 14 companies to each other and to boilerplate agreements provided by DIS. We also examined the agreements’ provisions to determine if they met the requirements of the ISR, the regulation in force at the time. We examined the visitation approval procedures and standard practice procedures manuals at the companies we reviewed to determine how the companies controlled foreign visitors and their access to the cleared facilities. We also interviewed company management, security personnel, and the company trustees to determine how they implemented the agreements. To assess implementation of the agreements, we reviewed annual company implementation reports, board of directors minutes, defense security committee minutes, visitation logs, international telephone bills, and various internal company correspondence and memorandums. To assess trustee involvement, we interviewed trustees and reviewed visitation approvals, as well as trustee meeting minutes, which showed the frequency of meetings, individuals’ attendance records, and topics of discussion. We also discussed each company’s implementation of the agreements and its information security programs with the cognizant DIS regional management and inspectors and reviewed their inspection reports. During our review, we had limited access to certain information. Foreign-owned contractors were working on various contracts and programs classified as Special Access Programs or Sensitive Compartmented Information. We were told by an official from the Office of the Assistant Deputy Under Secretary of Defense (Security Policy) that in some instances, it is not possible to acknowledge the existence of such contracts to individuals who are not specifically cleared for the program. As a result, we may not know of all foreign-owned firms involved in highly classified work. DOD provided written comments on a draft of this report. The complete text of those comments and our response is presented in appendix I. We performed our review from August 1992 through February 1995 in accordance with generally accepted government auditing standards. Some close U.S. allies actively seek to obtain classified and technical information from the United States through unauthorized means. Through its National Security Threat List program, the FBI National Security Division has determined that foreign intelligence activities directed at U.S. critical technologies pose a significant threat to national security. As we testified before the House Committee on the Judiciary in April 1992, sophisticated methods are used in espionage against U.S. companies.Unfortunately, the companies targeted by foreign intelligence agencies may not know—and may never know—that they have been targeted or compromised. “The risk in each of these situations is that foreign entities will exploit the relationship in ways that do not serve our overall national goals of preserving our technological advantages and curtailing proliferation. These goals generally include keeping certain nations from obtaining the technical capabilities to develop and produce advanced weapon systems and from acquiring the ability to counter advanced US weapon systems. In cases where U.S. national interests require the sharing of some of our capabilities with foreign governments, security safeguards must ensure that foreign disclosures do not go beyond their authorized scope. Safeguards must also be tailored to new proliferation threats and applied effectively to the authorization of foreign investment in classified defense industry and the granting of access by foreign representatives to our classified facilities and information.” Contractors owned by companies and governments of these same allied countries are working on classified DOD contracts under the protection of voting trusts, proxy agreements, and SSAs. These companies perform on DOD contracts developing, producing, and maintaining very sensitive military systems, and some of them have access to the most sensitive categories of U.S. classified information. Contracts requiring access to classified information at the levels shown in table 2.1 have been awarded to foreign-owned U.S. defense contractors. The following are examples of some sensitive contract work being performed by the 14 foreign-owned U.S. companies we reviewed: development of computer software for planning target selection and aircraft routes in the event of a nuclear war (a Top Secret contract); maintenance of DOD’s Worldwide Military Command and Control System ((WWMCCS) - the contract was classified TS, SCI, and COMSEC because of the information the computer-driven communications system contains); production of signal intelligence gathering radio receivers for the U.S. production of command destruct receivers for military missiles and National Aeronautics and Space Administration rockets (to destroy a rocket that goes off course); production of carbon/carbon composite Trident D-5 missile heat shields; production of the flight controls for the B-2, the F-117, and the F-22. Some of the contracts these foreign-owned U.S. companies are working on are Special Access Programs. Due to the special access requirements of these contracts, the contractors could not tell us what type of work they were doing, what military system the work was for, or even the identity of the DOD customer. Some of the contracts performed by companies we examined involve less sensitive technologies. For example, one company we visited had contracts requiring access to classified information because it cast valves for naval nuclear propulsion systems, and it needed classified test parameters for the valves. Another firm operating under an SSA is required to have a Secret-level clearance because it installs alarm systems in buildings that hold classified information. In addition to classified information, most of the 14 foreign-owned companies we reviewed possessed unclassified technical information and hardware items that are export-controlled by the State or Commerce Departments. DOD deemed many of these technologies to be militarily critical. Reports and briefings provided during 1993 by U.S. intelligence agencies showed a continuing economic espionage threat from certain U.S. allies.Eight of the 54 companies operating under voting trusts, proxy agreements, and SSAs and working on classified contracts are owned by interests from one of these countries. The following are intelligence agency threat assessments and examples illustrating this espionage. According to a U.S. intelligence agency, the government of Country A conducts the most aggressive espionage operation against the United States of any U.S. ally. Classified military information and sensitive military technologies are high-priority targets for the intelligence agencies of this country. Country A seeks this information for three reasons: (1) to help the technological development of its own defense industrial base, (2) to sell or trade the information with other countries for economic reasons, and (3) to sell or trade the information with other countries to develop political alliances and alternative sources of arms. According to a classified 1994 report produced by a U.S. government interagency working group on U.S. critical technology companies, Country A routinely resorts to state-sponsored espionage using covert collection techniques to obtain sensitive U.S. economic information and technology. Agents of Country A collect a variety of classified and proprietary information through observation, elicitation, and theft. The following are intelligence agency examples of Country A information collection efforts: An espionage operation run by the intelligence organization responsible for collecting scientific and technologic information for Country A paid a U.S. government employee to obtain U.S. classified military intelligence documents. Several citizens of Country A were caught in the United States stealing sensitive technology used in manufacturing artillery gun tubes. Agents of Country A allegedly stole design plans for a classified reconnaissance system from a U.S. company and gave them to a defense contractor from Country A. A company from Country A is suspectecd of surreptitiously monitoring a DOD telecommunications system to obtain classified information for Country A intelligence. Citizens of Country A were investigated for allegations of passing advanced aerospace design technology to unauthorized scientists and researchers. Country A is suspected of targeting U.S. avionics, missile telemetry and testing data, and aircraft communication systems for intelligence operations. It has been determined that Country A targeted specialized software that is used to store data in friendly aircraft warning systems. Country A has targeted information on advanced materials and coatings for collection. A Country A government agency allegedly obtained information regarding a chemical finish used on missile reentry vehicles from a U.S. person. According to intelligence agencies, in the 1960s, the government of Country B began an aggressive and massive espionage effort against the United States. The 1994 interagency report on U.S. critical technology companies pointed out that recent international developments have increased foreign intelligence collection efforts against U.S. economic interests. The lessening of East-West tensions in the late 1980s and early 1990s enabled Country B intelligence services to allocate greater resources to collect sensitive U.S. economic information and technology. Methods used by Country B are updated versions of classic Cold War recruitment and technical operations. The Country B government organization that conducts these activities does not target U.S. national defense information such as war plans, but rather seeks U.S. technology. The motivation for these activities is the health of Country B’s defense industrial base. Country B considers it vital to its national security to be self-sufficient in manufacturing arms. Since domestic consumption will not support its defense industries, Country B must export arms. Country B seeks U.S. defense technologies to incorporate into domestically produced systems. By stealing the technology from the United States, Country B can have cutting-edge weapon systems without the cost of research and development. The cutting-edge technologies not only provide superior weapon systems for Country B’s own use, but also make these products more marketable for exports. It is believed that Country B espionage efforts against the U.S. defense industries will continue and may increase. Country B needs the cutting-edge technologies to compete with U.S. systems in the international arms market. The following are intelligence agency examples of Country B information collection efforts: In the late 1980s, Country B’s intelligence agency recruited agents at the European offices of three U.S. computer and electronics firms. The agents apparently were stealing unusually sensitive technical information for a struggling Country B company. This Country B company also owns a U.S. company operating under a proxy agreement and performing contracts for DOD classified as TS, SAP, SCI, and COMSEC. Country B companies and government officials have been investigated for suspected efforts to acquire advanced abrasive technology and stealth-related coatings. Country B representatives have been investigated for targeting software that performs high-speed, real-time computational analysis that can be used in a missile attack system. Information was obtained that Country B targeted a number of U.S. defense companies and their missile and satellite technologies for espionage efforts. Companies of Country B have made efforts, some successful, to acquire targeted companies. The motivation for Country C industrial espionage against the United States is much like that of Country B: Country C wants cutting-edge technologies to incorporate into weapon systems it produces. The technology would give Country C armed forces a quality weapon and would increase the weapon’s export market potential. The Country C government intelligence organization has assisted Country C industry in obtaining defense technologies, but not as actively as Country B intelligence has for its industry. One example of Country C government assistance occurred in the late 1980s, when a Country C firm wanted to enter Strategic Defense Initiative work. At that time, the Country C intelligence organization assisted this firm in obtaining applicable technology. The Country D government has no official foreign intelligence service. Private Country D companies are the intelligence gatherers. They have more of a presence throughout the world than the Country D government. However, according to the 1994 interagency report, the Country D government obtains much of the economic intelligence that Country D private-sector firms operating abroad collect for their own purposes. This occasionally includes classified foreign government documents and corporate proprietary data. Country D employees have been quite successful in developing and exploiting Americans who have access to classified and proprietary information. The following are examples of information collection efforts of Country D: Firms from Country D have been investigated for targeting advanced propulsion technologies, from slush-hydrogen fuel to torpedo target motors, and attempting to export these items through intermediaries and specialty shipping companies in violation of export restrictions. Individuals from Country D have been investigated for allegedly passing advanced aerospace design technology to unauthorized scientists and researchers. Electronics firms from Country D directed information-gathering efforts at competing U.S. firms in order to increase the market share of Country D in the semiconductor field. Intelligence community officials stated that they did not have indications that the intelligence service of Country E has targeted the United States or its defense industry for espionage efforts. However, according to the 1994 interagency report, in 1991 the intelligence service of this country was considering moving toward what it called “semi-overt” collection of foreign economic intelligence. At that time, Country E’s intelligence service reportedly planned to increase the number of its senior officers in Washington to improve its semi-overt collection—probably referring to more intense elicitation from government and business contacts. The main counterintelligence concern cited by one intelligence agency regarding Country E is not that its government may be targeting the United States with espionage efforts, but that any technology that does find its way into Country E will probably be diverted to countries to which the United States would not sell its defense technologies. The defense industry of this country is of particular concern in this regard. It was reported that information diversions from Country E have serious implications for U.S. national security. Large-scale losses of technology were discovered in the early 1990s. Primary responsibility for industrial security resides in a small staff of the government of Country E. It was reported that this limited staff often loses when its regulatory concerns clash with business interests. The intelligence agency concluded that the additional time needed to eradicate the diversion systems will consequently limit the degree of technological security available for several years. The question suggested by this situation is, if technology from a U.S. defense contractor owned by interests of Country E is transferred to Country E, will this U.S. defense technology then be diverted to countries to which the United States would not sell? Foreign ownership or control of U.S. firms performing classified contracts for DOD poses a special security risk. The risk includes unauthorized or inadvertent disclosure of classified information available to the U.S. firm. In addition, foreign owners could take action that would jeopardize the performance of classified contracts. To minimize the risks, the ISR and NISPOM require voting trusts and proxy agreements to insulate the foreign owners from the cleared U.S. defense firm or SSAs to limit foreign owners’ participation in the management of the cleared U.S. firm. The ISR also required visitation agreements to control visitation between foreign owners and their cleared U.S. firms. The new industrial security program manual does not address visitation control agreements or procedures. DOD eliminated separate visitation agreements in favor of visitation procedures in the security agreements themselves. In May 1992, a former Secretary of Defense testified before the House Committee on Armed Services that under proxy agreements and voting trusts, the foreign owners of U.S. companies working on classified contracts had “virtually no say except if somebody wants to sell the company or in very major decisions.” He indicated that for the purposes of the foreign parent company, proxy agreements and voting trusts are essentially “blind trusts.” Further, he testified that a number of companies were “functioning successfully” under SSAs. Of the three types of arrangements used to negate or reduce risks in majority foreign ownership cases, SSAs were the least restrictive. Accordingly, SSA firms pose a somewhat higher risk associated with classified work. The ISR and the NISPOM generally prohibit SSA firms from being involved in Top Secret and other highly sensitive contracts, but allow for exceptions if DOD determines they are in the national interest. SSA firms we reviewed were working on 47 contracts classified as TS, SCI, SAP, RD, and COMSEC. In addition, we observed that ISR-required visitation agreements permitted significant contact between the U.S. firms and the foreign owners. Unlike voting trusts and proxy agreements, which insulate foreign owners from the management of the cleared firm, SSAs allow foreign owners to appoint a representative to serve on the board of directors. Called an “inside director,” this individual represents the foreign owners and is often a foreign national. The inside director is to be counterbalanced by DOD-approved directors, called the “outside directors.” The principal function of the outside directors is to protect U.S. security interests. Inside directors cannot hold a majority of the votes on the board, but because of their connection to the foreign owners, their views about the company’s direction on certain defense contracts or product lines reflect those of the owners. Depending on the composition of the board, the inside director and the company officers on the board could possibly combine to out vote the outside directors. In addition, unlike voting trusts and proxy agreements, the SSAs we examined allow the foreign owner to replace “any member of the [SSA company] Board of Directors for any reason.” DOD recently provided us with new boilerplate SSA language that will require DIS to approve the removal of a director. Foreign owners of SSA firms can also exercise significant influence over the U.S. companies they own in other ways. For example, at two SSA firms we examined, the foreign owners used export licenses to obtain unclassified technology from the U.S. subsidiary that was vital to the U.S. companies’ competitive positions. Officers of the U.S. companies stated that they did not want to share these technologies, but the foreign owners required them to do so. Subsequently, one of these U.S. companies faced its own technology in a competition with its foreign owner for a U.S. Army contract. Because of the additional risk previously mentioned, companies operating under SSAs are normally ineligible for contracts allowing access to TS, SAP, SCI, RD, and COMSEC information. However, during our review, 12 of the 33 SSA companies were working on at least 47 contracts requiring access to this highly classified information. Before June 1991, DOD reviewed an SSA firm to determine whether it would be in the national interest to allow the firm to compete for contracts classified TS, SCI, SAP, RD, or COMSEC. New guidance was issued in June 1991 requiring the responsible military service to make a national interest determination each time a highly classified contract was awarded to an SSA firm. We found only one contract-specific national interest determination had been written since the June 1991 guidance. According to DOD officials, the other 46 highly classified contracts performed by SSA companies predated June 1991 or were follow-on contracts to contracts awarded before June 1991. Since information on some contracts awarded to SSA companies is under special access restrictions, DOD officials may be authorized to conceal the contracts from people not specifically cleared for access to the program. We, therefore, could not determine with confidence if the requirement for contract-specific national interest determinations was carried out. One company performs on contracts classified as TS, SCI, SAP, RD, and COMSEC under an alternative arrangement called an MOA. The MOA (a unique agreement) was created in 1991 because the company has classified DOD contracts and, although foreign interests do not hold a majority of the stock, they own 49 percent of the company and have special rights to veto certain actions of the majority owners. Normally, under the ISR, minority foreign investment in a cleared U.S. defense contractor required only a resolution of the board of directors stating that the foreign interests will not require, nor be given, access to classified information. DOD did not consider the board resolution appropriate for this case, partially because of the board membership of the foreign owners and their veto rights over certain basic corporate decisions. The company board of directors consists of six representatives appointed by the U.S. owners and one representative for each of the four foreign minority interests. Any single foreign director can block any of 16 specified actions of the board of directors. These actions include the adoption of a company strategic plan or annual budget as well as the development of a new product that varies from the lines of business set forth in the strategic plan. In addition, any two foreign directors can block an additional 11 specified actions. These veto rights could give the foreign interests significantly more control and influence over the U.S. defense contractor in certain instances than would be permitted in an SSA. In 1991, DIS objected to an agreement less stringent than an SSA because of the veto rights of the foreign directors and, unlike an SSA, an MOA does not require any DOD-approved outside members on the board of directors. However, the Office of the Under Secretary of Defense for Policy determined that the company would not be under foreign domination and that the MOA was a sufficient control. DOD reexamined the MOA during a subsequent (1992) foreign investment in the company and made some modifications. Although the MOA does not provide for outside members on the board, it does require DOD-approved outside members on a Defense Security Committee to oversee the protection of classified and export-controlled information. The first version of the MOA did not give the outside security committee members the right to attend any board of directors meetings. Under the revised (1992) version of the MOA, the outside security committee members still do not have general rights to attend board meetings; however, their attendance at board meetings is required if the foreign interests are to exercise their veto rights. Also, the first version of the MOA did not require any prior security committee approval for representatives of the foreign interests to visit the cleared U.S. defense contractor. The newer version requires prior approval when the visits concern performance on a classified contract. “In every case where a voting trust agreement, proxy agreement, or special security agreement is employed to eliminate risks associated with foreign ownership, a visitation agreement shall be executed . . .” “The visitation agreement shall provide that, as a general rule, visits between the foreign stockholder and the cleared U.S. firm are not authorized; however, as an exception to the general rule, the trustees, may approve such visits in connection with regular day-to-day business operations pertaining strictly to purely commercial products or services and not involving classified contracts.” The visitation agreements are to guard against foreign owners or their representatives obtaining access to classified information without a clearance and a need to know. At all 14 companies we reviewed, visitation agreements permitted the foreign owners and their representatives to visit regarding military and dual-use products and services. The visitation agreements permitted visits to the U.S. company (1) in association with classified contracts if the foreign interests had the appropriate security clearance and (2) under State or Commerce Department export licenses. The large number of business transactions between the U.S. defense contractors and their foreign owners granted representatives of the foreign owners frequent entry to the cleared U.S. facilities. Eight of the 14 firms we reviewed had contractual arrangements with their foreign owners that led to a high (often daily) degree of contact. In one case, the U.S. company sold and serviced equipment produced by the foreign firm, so the two firms had almost continual contact at the technician level to obtain repair parts and technical assistance. During a 3-month period in 1993, this company approved 167 extended visit authorizations. At one SSA firm we reviewed, 236 visits occurred between the U.S. firm and representatives of the foreign owners over a 1-year period, averaging about 7 days per visit. At a proxy company, there were 322 approved requests for contact with representatives of the owners during a 1-year period; 94 of the requests were blanket requests for multiple contacts over the subsequent 3-month period. Not all foreign-owned defense contractors had this degree of contact with representatives of their foreign owners. One SSA firm had only 44 visits with representatives of its foreign owners during a 1-year period. Some visitation agreements permitted long-term visits to the cleared U.S. companies by employees of the foreign owners. Five companies we reviewed had employees of the foreign owners working at the cleared U.S. facilities. In a number of these cases, they were technical and managerial staff working on military and dual-use systems and products under approved export licenses. One company covered by a proxy agreement had a foreign national technical manager from the foreign parent firm review the space and military technologies of the U.S. defense contractor to determine if there were opportunities for technical cooperation with the foreign parent firm. At another firm we reviewed, representatives of the foreign partners are permanently on site. At yet another company, a foreign national employee of the foreign parent company worked on a computer system for the B-2 bomber and had access to export-controlled information without the U.S. company obtaining the required export license. Post-visit contact reports are the primary means for DIS and the trustees to monitor the substance of contacts between the foreign-owned U.S. contractor and representatives of its foreign owners. Such records should be used to determine if the contact with representatives of the foreign owners was appropriate and in accordance with the ISR and the visitation agreement. Some visitation agreements do not require employees of the U.S. firm to document and report the substance of the discussions with employees of the foreign parent firm. At three of the firms we reviewed, the only record of contact between employees of the U.S. company and the foreign owners were copies of forms approving the visit. However, at other foreign-owned U.S. defense contractors, post-visit contact reports were available for DIS to review when it inspected the firms and when DIS held its annual agreement compliance review with the foreign-owned companies. The ISR, the NISPOM, and most of the visitation agreements we reviewed do not require telephonic contacts between the U.S. defense contractor and representatives of its foreign owners to be controlled and documented. One of the firms covered by a proxy agreement documented 1,912 telephonic contacts between the U.S. company and representatives of its foreign owners for a 1-year period. After examining telephone bills at other companies, we found 1 SSA company had over 550 telephone calls to the country of the foreign owners in 1 month. Company officials said these calls were primarily to representatives of the foreign owners. In contrast, our review of telephone bills at another SSA company showed only 47 telephone calls to the country of the foreign owners during 1 month in 1993. If an individual intends to breach security, it would be easier to transfer classified or export-controlled information by telephone, facsimile, or computer modem than it would be in person. Documenting telephone contacts would not prevent such illegal activity, but might make it easier to detect. During our review, DIS also recognized this and asked companies to establish a procedure for documenting telephonic contacts with representatives of their foreign owners. We were initially told the NISPOM section dealing with foreign ownership, control, and influence would replace the FOCI section of the ISR. The new manual does not address visitation control agreements or procedures to restrict visitation between the cleared U.S. defense contractor and representatives of its foreign owners. Instead, it appears to allow unlimited visitation. However, in its comments on our report, DOD stated that the ISR will be retained and revised to reflect the NISPOM. DOD also said that the revised ISR will require visitation approval procedures, but instead of separate visitation agreements, these procedures will be incorporated into each voting trust, proxy agreement, and SSA. Under the ISR and the new NISPOM, majority foreign-owned facilities cleared to perform classified contracts must enter into agreements with DOD to negate, or at least reduce to an acceptable level, the security risks associated with foreign ownership, control, and influence. Voting trusts and proxy agreements are designed to insulate cleared U.S. defense firms from their foreign owners. SSAs limit the foreign owners’ participation in company management. None of these security arrangements is intended to deny U.S. defense contractors the opportunity to do business with their foreign owners. However, the frequent contact engendered by legitimate unclassified business transactions can heighten the risk of unauthorized access to classified information. Also, existing visitation agreements and procedures permit a high degree of contact. Often this contact is at the technical and engineer level where U.S. classified information could most easily be compromised. The draft NISPOM does not address visitation controls, but DOD has stated that a visitation approval procedures section will be included in the revised ISR. At a few of the 14 companies we reviewed, DOD-approved trustees were actively involved in company management and security oversight. At most of the companies, however, the trustees did little to protect classified or export-controlled information from access by foreign owner representatives. At proxy agreement companies, we observed cases where foreign owners were exercising more control than the ISR allowed and foreign-owned U.S. defense firms whose independence was degraded because of their financial reliance on the foreign owners. We also observed that some DOD-approved trustees appeared to have conflicts of interest. Finally, DIS did not tailor its inspections of these foreign-owned facilities to specifically address FOCI issues or the implementation of the control agreements, but has recently promulgated new inspection guidelines to address these issues. Some DOD-approved trustees were more actively involved in management and security oversight than others. For example, at some companies, the trustees retained, and did not delegate, their responsibility for approving all visits by representatives of the foreign owners as required in the visitation agreements. The more active trustees also reviewed post-visit contact reports and interviewed a sample of technical staff who met with the foreign owners’ representatives to ascertain the substance of their discussions, questioned potentially adverse business conditions caused by arrangements with the foreign parent, and attended business meetings at the company more often than quarterly. At most of the companies we reviewed, however, the trustees (or proxy holders or outside directors) did little to ensure that company management was not unduly influenced by the foreign owners or that the control structures in the security agreements were being properly implemented. Instead, they viewed their role as limited to ensuring that policies exist within the company to protect classified information. At six of the firms we reviewed, monitoring the security implementation and the business operations of the company by the trustees ranged from limited to almost nonexistent. In only two of the firms did the trustees appear to be actively involved in company management and security oversight. The need for trustee oversight of the business management of foreign-owned companies was highlighted at one SSA firm we examined. At this company, the foreign owners exercised their SSA powers to replace two successive director/presidents of the U.S. company. The first claimed he was terminated because he attempted to enforce the SSA. The second president contested his dismissal because the outside directors were not given prior notice of the owners’ intent to replace him. The owners stated that in both cases, poor business performance was the cause for termination and, in these cases, the outside directors agreed. Nevertheless, outside directors need to remain actively involved in monitoring the companies’ business management to ensure that foreign owners exercise these powers only for legitimate business reasons and not for reasons that could jeopardize classified information and contracts. Implementation and monitoring of the information security program was usually left to the facility security officer (FSO), an employee of the foreign-owned U.S. company. At the companies we reviewed, a variety of personnel served as FSO, including a general counsel, secretaries, and professional security officers. In any case, the FSO often performed the administrative functions of security and lacked the knowledge to determine the proper parameters for the substance of classified discussions, given a cleared foreign representative’s need to know. This limitation and the FSO’s potential vulnerability as an employee of the foreign-owned company pose a risk without active trustee involvement. Another potential problem associated with trustees relinquishing implementation and monitoring responsibilities to the FSO was illustrated at an SSA firm we reviewed. At the SSA firm, the FSO wanted to establish a new security procedure, but was overruled by the president of the foreign-owned U.S. defense company. In this instance, the FSO had enough confidence in the outside directors to go to them and complain. The outside directors agreed with the need for the new control and required its implementation. In this case, the outside directors led the officials of the foreign-owned firm to believe that the new security measure was an outside director initiative. If the circumstances and individuals had been different, the FSO might have lacked the confidence to seek the assistance of the outside directors. At the foreign-owned companies we reviewed, trustees were paid between $1,500 and $75,000 a year. In return for this compensation, the usual trustee involvement was attendance at four meetings annually. Typically, one of the trustees is designated to approve requests for visits with representatives of the foreign owners. This additional duty involves occasionally receiving, reviewing, and transmitting approval requests by facsimile machine. The ISR requires that a trustee approve visitation requests. However, in most of the firms we reviewed, trustees only directly approved visits between senior management of the U.S. firm and the foreign parent firm. The FSO approved visits below this senior management level, including visits with the technical and engineering staff; the trustees only reviewed documentation of these visits during their quarterly trustee meetings, if at all. In addition, when required, most post-visit contact reports lacked the detail needed for the trustees or DIS to determine what was discussed between the foreign-owned company and the owners’ representatives. Trustee inattention to contact at the technical level is of particular concern, since that is where most of the U.S. defense contractor’s technology is located, not in the board room where senior management officials are found. Trustees rarely visited or toured the foreign-owned company’s facility to observe the accessibility of classified or export-controlled information, except during prearranged tours at the time of their quarterly meetings. The trustees also rarely interviewed managerial and technical staff to verify the level and nature of their contact with employees of the foreign parent firm. Government officials suggested that trustees at two companies involve themselves in a higher degree of monitoring. Some flatly refused and stated that they have held important positions in government and industry and feel that it is not their role to personally provide such detailed oversight. The ISR requires that proxy holders and trustees of voting trusts “shall assume full responsibility for the voting stock and for exercising all management prerogatives relating thereto” and that the foreign stockholders shall “continue solely in the status of beneficiaries.” However, as an example of minimal proxy involvement, at one proxy company the three proxy holders only met twice a year. Only one of the three proxy holders was on the company’s board of directors, and the board had not met in person for 4 years. All board action was by telephone, and the board’s role was limited to electing company officers. The proxy holders’ were minimally involved in selecting and approving these company officials. The parent firm selected the current chief executive officer (CEO) of the company and the proxy holders affirmed this selection after questioning the parent firm about the individual’s background. The FSO was required to approve all visits to this firm by employees of the foreign parent rather than the proxy holders as required by the ISR. At the company we reviewed operating under an MOA, the Defense Security Committee consists of four company officials and the three outside members. These outside members visited the company only for the quarterly committee meetings. The president of the company, who is also the security committee chairman, set the meeting agenda and conducted the meetings. Further, his presentations to the outside members usually focused on current and future business activities rather than security matters. Any plant tours the outside members received were prearranged and concurrent with the quarterly meetings. There were no off-cycle visits to the company to inspect or monitor security operations. To eliminate the risks associated with foreign control and influence over foreign-owned U.S. defense contractors, the ISR requires that voting trust and proxy agreements “unequivocally shall provide for the exercise of all prerogatives of ownership by the trustees with complete freedom to act independently without consultation with, interference by, or influence from foreign stockholders.” “the trustees shall assume full responsibility for the voting stock and for exercising all management prerogatives relating thereto in such a way as to ensure that the foreign stockholders, except for the approvals just enumerated, [sale, merger, dissolution of the company; encumbrance of stock; filing for bankruptcy] shall be insulated from the cleared facility and continue solely in the status of beneficiaries.” However, at one of the proxy firms we reviewed, the foreign owners acted in more than the status of beneficiaries. The proxy firm’s strategic plan and annual budget were regularly presented to the foreign owners for review. At least once the foreign parent firm rejected a strategic plan and indicated that it would continue to object until the plan specified increased collaboration between the proxy firm and the foreign parent firm. At another time, the foreign owners had employees of this U.S. firm represent them in an attempt to acquire another U.S. aerospace firm more than 10 times the size of the proxy firm. Although decisions on mergers are within the rights of the foreign owners, during this acquisition effort, officers and employees of the U.S. defense contractor were operating at the direction of the foreign owners. In this case, because the parent firm directed staff of the proxy firm, it clearly acted as more than a beneficiary, the role to which foreign owners are limited under the ISR. Another proxy firm has a distribution agreement with its foreign owners that restricts the proxy firm to marketing electronic equipment and services to the U.S. government. In addition, the agreement will only allow the proxy firm to service hardware that is used on classified systems. Although this distribution agreement was approved by DIS at the time of the foreign acquisition, it controls the strategic direction of the proxy firm. The proxy firm reported to DIS that it is important for the survival of the U.S. company to be able to pursue business opportunities that are currently denied by the distribution agreement. The ISR states that a company operating under a proxy agreement “shall be organized, structured, and financed so as to be capable of operating as a viable business entity independent from the foreign stockholders.” During our review, we saw examples of firms that depended on their foreign owners for financial support or had business arrangements with the foreign owners that degraded the independence of the proxy firm. The president of one company operating under a proxy agreement told us that his company was basically bankrupt. His company is financed by banks owned by the government where the parent company is incorporated. The company’s foreign parent firm guarantees the loans, and two of the government banks are on the parent firm’s board of directors. The foreign owners paid several million dollars to the U.S. company to relocate one of its divisions. According to officials of the U.S. company, they could not otherwise have afforded such a move, nor could they have obtained bank loans on their own. Another proxy firm had loans from the foreign owners that grew to exceed the value of the proxy firm. One proxy holder said the company would probably have gone out of business without the loans. Even with the loans, the company’s financial position was precarious. It was financially weak, could not obtain independent financing, and was considerably burdened by making interest payments on its debt to the foreign owners. During our review, a DIS official acknowledged that DIS should have addressed the risk imposed by this indebtedness. Under the ISR provisions, voting trustees and proxy holders “shall be completely disinterested individuals with no prior involvement with either the facility or the corporate body in which it is located, or the foreign interest.” At one of the companies we reviewed, a proxy holder was previously involved as a director of a joint venture with the foreign owners. These foreign owners later nominated this individual to be their proxy holder. He withheld the information about his prior involvement from DIS at the time he became a proxy holder. After DIS became aware of this relationship, it concluded that this individual was ineligible to be a proxy holder and should not continue in that role. Thereafter, the Assistant Secretary of Defense for Command, Control, Communications, and Intelligence wrote to the company about irregularities in proxy agreement implementation, such as allowing the foreign owners prerogatives that were not allowed under the proxy agreement. However, he did not address the appearance of a conflict of interest, and the individual has remained as a proxy holder. This same proxy holder is also now the part-time CEO of the foreign-owned U.S. defense firm and received an annual compensation of approximately $272,000 (as compared to the $50,000 proxy holder stipend) for an average of 8 days’ work per month in his dual role of CEO and proxy holder. This appears to be a second conflict of interest: as CEO his fiduciary duty and loyalty to the foreign-owned company takes primacy; as proxy holder, his primary responsibility is to protect DOD’s information security interests. In addition, at this company, the conflict between the proxy holders’ responsibility to DOD and their perceived fiduciary responsibility was illustrated during a DIS investigation into possible violations of the proxy agreement. Citing their fiduciary responsibility, the proxy holders refused to allow DIS investigators to interview employees without company supervision. The Assistant Secretary of Defense for Command, Control, Communications, and Intelligence found this action to be contrary to the firm’s contractual obligations under its security agreement with DOD. The company just discussed is not the only one where a proxy holder also holds the title of CEO. At another firm, the proxy holder’s salary as CEO is approximately $113,000 (as compared to the $22,000 proxy holder stipend). Again, there appears to be a conflict of interest because of the CEO’s fiduciary duty and loyalty to the foreign-owned company, and his responsibility to protect DOD’s information security interests. At another proxy firm, the lead proxy holder owns a consulting firm that has a contract with the foreign-owned U.S. company. In this case, there appears to be a conflict of interest because as proxy holder, his primary responsibility is to protect the information security interests of DOD, but as a consultant to the foreign-owned firm, it is in his interest to please the foreign-owned company. At another firm, the agreement requires that the outside members of the security committee be independent of the foreign investors and their shareholders. The French government owns 12-1/4 percent of this U.S. company. Even though the outside members of the security committee are to protect classified and export-controlled information from this foreign government, one outside member created the appearance of a conflict of interest by representing a French government-owned firm before DOD in its efforts to buy another cleared U.S. defense contractor. This outside member also created the appearance of a conflict of interest when his consulting firm became the Washington representative for a French government-owned firm in its export control matters with the State Department. Finally, the ISR does not expressly require that outside directors serving under an SSA comply with the independence standards applicable to voting trustees and proxy holders. The reason for this omission is not clear. However, all of the SSAs we reviewed stated that individuals appointed as outside directors can have “no prior employment or contractual relationship” with the foreign owners. Since the outside directors perform the same function as voting trustees and proxy holders in ensuring the protection of classified information and the continued ability of the cleared U.S. company to perform on classified contracts, it seems reasonable that they should also be disinterested parties when named to the board and should remain free of other involvement with the foreign owners during their period of service. DIS inspectors told us that their inspections of foreign-owned U.S. defense contractors vary little from the type of facility security inspections they do at U.S.-owned facilities. Their inspections concentrated on such items as classified document storage, amount and usage of classified information, and the number of cleared personnel and their continuing need for clearances. During the time of our review, DIS developed new guidelines for inspections of foreign-owned firms by its industrial security staff to specifically address foreign ownership issues. They call for the inspectors to examine issues such as changes to the insulating agreement, business relationships between the U.S. company and its foreign owners, foreign owner involvement in the U.S. company’s strategic direction, the number and nature of contacts with representatives of the foreign owners, and the number of foreign staff working at the facility. These guidelines were promulgated in September 1994. DIS is beginning to implement the new inspection guidelines. According to DIS officials at the regional and field office levels, before they use the new guidelines, they must educate the inspection staff on foreign ownership issues as well as how the issues should be addressed during their inspections. They also said that implementing these new inspection procedures would probably double the length of an inspection at the foreign-owned facilities. Currently, DIS must inspect each cleared facility twice a year, but it is having difficulty maintaining this inspection schedule. Industrial security inspectors are responsible for around 70 cleared facilities, and inspections at some larger facilities take a number of days. Doubling the inspection time at the foreign-owned facilities under the new guidelines might require some realignment of DIS resources. According to DOD officials, DIS inspections will occur no more often than annually under the NISPOM. We recommend that the Secretary of Defense develop and implement a plan to improve trustee oversight and involvement in the foreign-owned companies and to ensure the independence of foreign-owned U.S. defense contractors and their trustees from improper influence from the foreign owners. As part of this effort, the Secretary should make the following changes in the implementation of the existing security arrangements and under the National Industrial Security Program. 1. Visitation request approvals: The trustees should strictly adhere to the ISR visitation agreement provision that requires them to approve requests for visits between the U.S. defense contractor and representatives of its foreign owners. This duty should not be delegated to officers or employees of the foreign-owned firm. 2. Trustee monitoring: The trustees should be required to ensure that personnel of the foreign-owned firm document and report the substance of the discussions they hold with personnel of the foreign parent firm. The trustees should review these reports and ensure that the information provided is sufficient to determine what information passed between the parties during the contact. The trustees should also select at least a sample of contacts and interview the participants of the foreign-owned firm to ensure that the post-contact reports accurately reflect what transpired. 3. Trustee inspections: To more directly involve trustees in information security monitoring, the trustees should annually supervise an information security inspection of each of the cleared facilities. The results of these inspections should be included in the annual report to DIS. 4. FSO supervision: To insulate the FSO from influence by the foreign-owned firm and its foreign owners, the trustees should be empowered and required to review and approve or disapprove the selection of the FSO and all decisions regarding the FSO’s pay and continued employment. The trustees should also supervise the FSO to ensure an acceptable level of job performance, since trustees are charged with monitoring information security at the U.S. defense contractor. 5. Financial independence: To monitor the financial independence of the foreign-owned firm, the annual report to DIS should include a statement on any financial support, loans, loan guarantees, or debt relief from or through the foreign owners or the government of the foreign owners that have occurred during the year. 6. Trustee independence: To help avoid conflicts of interest for the trustees, require them to certify at the time of their selection, and then annually, that they have no prior or current involvement with the foreign-owned firm or its foreign owners other than their trustee position. This certification should include a statement that they are not holding and will not hold positions within the foreign-owned company other than their trustee position. It should be expressly stated that these independence standards apply equally to voting trustees, proxy holders, and outside directors of firms under SSAs. 7. Trustee duties: The selected trustees should be required to sign agreements acknowledging their responsibilities and the specific duties they are required to carry out those responsibilities, including those in numbers 1 through 4. The agreement should provide that DOD can require the resignation of any trustee if DOD determines that the trustee failed to perform any of these duties. This agreement should ensure that the trustees and the government clearly understand what is expected of the trustees to perform their security roles. DOD stated that it generally agreed with the thrust of our recommendations in this report, but did not agree that the specific actions we recommended were necessary, given DOD efforts to address the issues involved. DOD said it had addressed these issues through education, advice, and encouragement of trustees to take the desired corrective actions. We and DOD have both seen instances in which this encouragement has been rejected. Because of the risk to information with national security implications, we believe that requiring, rather than encouraging, the trustees to improve security oversight would be more effective. Therefore, we continue to believe our recommendations are valid and believe they should be implemented to reduce the security risks. DOD’s comments and our evaluation are presented in their entirety in appendix I. The following are GAO’s comments on the Department of Defense’s (DOD) letter dated April 14, 1995. “As a general rule, visits between the Foreign Interest and the cleared Corporation are not authorized; however, the Proxy Holders may approve visits in connection with regular day-to-day business operations pertaining strictly to purely commercial products or services and not involving classified contracts or executive direction or managerial matters.” “As a general rule, visits between representatives of the Corporation and those of any Foreign Interest, are not authorized unless approved in advance by the designated Proxy Holder.” “Most agreements are silent on the authority of the DOD to terminate the arrangement or to dismiss a Proxy Holder, Trustee or outside director. While DIS is normally a party to Special Security Agreements, it is not a party to proxy or trust agreements and therefore lacks standing to intercede when appropriate.” While DIS is a party to SSAs, if faced with outside directors who are not performing their security duties, the only means for DIS to force corrective action would be to terminate the agreement, thereby causing the company to lose its clearance, and halting all the company’s work on classified contracts. Our recommendation is a more moderate way of removing a nonperforming trustee than revoking a company’s clearance and terminating its classified contracts. We modified our recommendation in recognition of DOD’s comment that the shareholder must remove a trustee director. James F. Wiggins Davi M. D’Agostino Peter J. Berry John W. Yaglenski Eric L. Hallberg Deena M. El-Attar Cornelius P. Williams Robert R. Tomcho The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. | Pursuant to a congressional request, GAO reviewed security arrangements used to protect sensitive information from foreign-owned U.S. defense contractors that perform on classified Department of Defense (DOD) contracts. GAO found that: (1) security arrangements are intended to protect foreign-owned U.S. defense contractors from undue foreign control and to prevent foreign owners' access to classified information; (2) there are 54 foreign-owned U.S. defense contractors operating under security arrangements, such as voting trusts, proxy agreements, and special security agreements; (3) although special security agreement companies are not permitted access to the highest levels of classified information due to the risk of foreign control, DOD authorized such access to 12 of 33 special security agreement companies; (4) each foreign-owned U.S. defense contractor must have a visitation agreement with its parent company to protect against foreign owners' unauthorized access to classified information; (5) individuals contacted by the parent company are required to report on the technical discussions that took place under visitation agreements; (6) U.S. citizens are selected for the boards of directors of foreign-owned U.S. defense firms to protect against undue foreign control and unauthorized access to classified information; and (7) most trustees have limited oversight roles and do not actively check on the implementation of security policies or engage in management issues, and some appear to have conflicts of interest. |
This is a set of web collections curated by Mark Graham using the Archive-IT service of the Internet Archive. They include web captures of the ISKME.org website as well as captures from sites hosted by IGC.org.These web captures are available to the general public.For more information about this collection please feel free to contact Mark via Send Mail ||||| Extraordinary cloud formations over two cities in China appear to have created an apparition of a floating city.
Footage of the phenomenon appears to show towerblock-like formations over the city of Foshan in the Guandong province of China, apparently bringing many people to a standstill in the street. It reportedly lasted only a few minutes before disappearing,
Experts said the phenomenon, a video of which was shown on Chinese television, was a common optical mirage, according to The Inquisitr.
Some internet users claimed the footage was evidence of "Project Blue Beam technology", based on a conspiracy theory that Nasa will at some point attempt to simulate the second coming of Christ or an alien invasion.
Online commentator Julie Wagoner said: "In my opinion, CERN , HAARP and Project Blue Beam could all have a little something to do with this. We just never know because the media only tells what the "elite" allow to be told. I am certain there are those of you who know what and who I am referring to when I say ,"elite". This is definitely something we will be seeing more of."
Another commentator, Goe Bann, said: "Interesting. What if it really is a city from a parallel universe? Or maybe a glimpse into the future."
But such outlandish suggestions were dismissed by experts, who say the visages are a trick of the eye, resulting from warm and cold weather bending light so that objects appear higher and larger than they really are.
Doubt was also cast on the validity of the video, which was the only apparent source available, with others claiming it had been Photoshopped. It was shown on some Chinese television, however.
One such mirage phenomenon is called a Fata Morgana, where the image of an object or objects is distorted from its original appearance as to be almost unrecognisable. It occurs because rays of light are bent when they pass through air layers of different temperatures.
The first film on a cloud, meanwhile, called a zoopraxiscope, was projected into the skies above Nottingham in the UK in a collaboration of artists and scientists called Project Nimbus. It depicted a green horseman galloping across the clouds, reported science blog Geek.
The clouds resembling skyscrapers in China did not emit any light, but were dark and grey. ||||| From RationalWiki
Project Blue Beam is a conspiracy theory that claims that NASA is attempting to implement a New Age religion with the Antichrist at its head and start a New World Order, via a technologically-simulated Second Coming.
The allegations were presented in 1994 by Quebecois journalist and conspiracy theorist Serge Monast, and later published in his book Project Blue Beam (NASA). Proponents of the theory allege that Monast and another unnamed journalist, who both died of heart attacks in 1996, were in fact assassinated, and that the Canadian government kidnapped Monast's daughter in an effort to dissuade him from investigating Project Blue Beam.[1][note 1]
The project was apparently supposed to be implemented in 1983,[1] but it didn't happen. It was then set for implementation in 1995 and then 1996.[2] Monast thought Project Blue Beam would be brought to fruition by the year 2000,[3] really, definitely, for sure.
Structure [ edit ]
Ésotérisme Expérimental speaking to host Richard Glenn in the early 1990s. Dig that conspiracy theorist beard. Monast onspeaking to host Richard Glenn in the early 1990s. Dig that conspiracy theorist beard.
Project Blue Beam has all the usual hallmarks of a conspiracy theory:
It attempts to shoehorn events that have happened, and are happening, into its "predictive" framework, particularly with references to films being used to prep people psychologically for the conspiracy's dramatic conclusion.
It shows a lack of comprehension of the practical psychology of those who are not paranoid. [4]
It plays on fears of alleged advanced technology that most people, including its author, do not understand.
The theory itself cobbles together past conspiracy tropes, starting from paranoia and progressing to technologically implausible plans with motivations that literally do not make any sense.
The theorist's death from a middle-age heart attack cut off its possible spread early and left it short on source material in English — though there is the tantalizing promise of several books' worth in French — but did cap the theory itself off nicely.
Propagation [ edit ]
The theory is widely popular (for a conspiracy theory) on the Internet, with many web pages dedicated to the subject, and countless YouTube videos explaining it. The actual source material, however, is very thin indeed.
Monast lectured on the theory in the mid-1990s (a transcript of one such lecture is widely available), before writing and publishing his book, which has not been reissued by his current publisher and is all but unobtainable. The currently available pages and videos all appear to trace back to four documents:
A transcript of the 1994 lecture by Monast, translated into English. [3]
A GeoCities page [5] written by David Openheimer and which appears to draw on the original book.
written by David Openheimer and which appears to draw on the original book. A page on educate-yourself.org, compiled in 2005, which appears to include a translation of the book from the French. [1]
Monast's page in French Wikipedia.[6] The French Wikipedia article is largely sourced from two books on conspiracy theories and extremism by Pierre-André Taguieff, a mainstream academic expert on racist and extremist groups.[note 2]
From these few texts have come a flood of green ink, in text and video form, in several languages. Even the French language material typically does not cite the original book but the English language pages on educate-yourself.org. However, conspiracy theorists seem to use quantity as a measure of substance (much as alternative medicine uses appeal to tradition) and never mind the extremely few sources it all traces back to.[7]
Proponents of the theory have extrapolated[note 3] it to embrace HAARP,[8] 9/11,[9] the Norwegian Spiral,[10] chemtrails,[11][12] FEMA concentration camps[13] and Tupac Shakur.[14] Everything is part of Project Blue Beam. It's well on its way to becoming the Unified Conspiracy Theory.
Behold A Pale Horse, William Cooper's 1991 green ink magnum opus, has lately been considered a prior claim of, hence supporting evidence for, Blue Beam by advocates. The book is where a vast quantity of now-common conspiracy memes actually came from, so retrospectively claiming it as prior evidence is somewhere between cherrypicking and the Texas sharpshooter fallacy. However, the following quotes, from pages 180-181, intersect slightly with the specific themes of Blue Beam:
It is true that without the population or the bomb problem the elect would use some other excuse to bring about the New World Order. They have plans to bring about things like earthquakes, war, the Messiah, an extra-terrestrial landing, and economic collapse. They might bring about all of these things just to make damn sure that it does work. They will do whatever is necessary to succeed. The Illuminati has all the bases covered and you are going to have to be on your toes to make it through the coming years.
Can you imagine what will happen if Los Angeles is hit with a 9.0 quake, New York City is destroyed by a terrorist-planted atomic bomb, World War III breaks out in the Middle East, the banks and the stock markets collapse, Extraterrestrials land on the White House lawn, food disappears from the markets, some people disappear, the Messiah presents himself to the world, and all in a very short period of time? Can you imagine? The world power structure can, and will if necessary, make some or all of those things happen to bring about the New World Order.
The theory [ edit ]
“ ” Without a universal belief in the new age religion, the success of the new world order will be impossible!
The alleged purpose of Project Blue Beam is to bring about a global New Age religion, which is seen as a core requirement for the New World Order's dictatorship to be realised. There's nothing new in thinking of religion as a form of control, but the existence of multiple religions, spin-off cults, competing sects and atheists suggest that controlling the population entirely through a single religion isn't particularly easy. Past attempts have required mechanisms of totalitarianism such as the Inquisition.
Monast's theory, however, suggests using sufficiently advanced technology to trick people into believing. Of course, the plan would have to assume that people could never fathom the trick at all — something contested by anyone sane enough not to swallow this particular conspiracy.
The primary claimed perpetrator of Project Blue Beam is NASA, presented as a large and mostly faceless organization that can readily absorb such frankly odd accusations, aided by the United Nations, another old-time boogeyman of conspiracy theorists.
According to Monast, the project has four steps:
Step One [ edit ]
Step One requires the breakdown of all archaeological knowledge. This will apparently be accomplished by faking earthquakes at precise locations around the planet. Fake "new discoveries" at these locations "will finally explain to all people the error of all fundamental religious doctrines", specifically Christian and Muslim doctrines.
This makes some degree of sense — if you want to usurp a current way of thinking you need to completely destroy it before putting forward your own. However, religious belief is notoriously resilient to things like facts. The Shroud of Turin is a famous example that is still believed by many to be a genuine shroud of Jesus as opposed to the medieval forgery that it has been conclusively shown to be. Prayer studies, too, show how difficult it is to shift religious conviction with mere observational fact — indeed, many theologians avoid making falsifiable claims or place belief somewhere specifically beyond observation to aid this. So what finds could possibly fundamentally destroy both Christianity and Islam, almost overnight, and universally all over the globe? Probably nothing. Yet, this is only step one of an increasingly ludicrous set of events that Project Blue Beam predicts will occur.
Step Two [ edit ]
their god. The sky projections will appear to people asgod.
Step Two involves a gigantic "space show" wherein three-dimensional holographic laser projections will be beamed all over the planet — and this is where Blue Beam really takes off. The projections will take the shape of whatever deity is most predominant, and will speak in all languages. At the end of this light show, the gods will all merge into one god, the Antichrist.
This is a rather baffling plan as it seems to assume people will think this is actually their god, rather than the more natural twenty-first century assumption that it is a particularly opaque Coca Cola advertisement. Evidence commonly advanced for this is a supposed plan to project the face of Allah, despite its contradiction with Muslim belief of God's uniqueness, over Baghdad in 1991 to tell the Iraqis to overthrow Saddam Hussein. Someone, somewhere, must have thought those primitive, ignorant non-Western savages wouldn't have had television or advertising, and would never guess it was being done with mirrors.[4] In general, pretty much anything that either a) involves light or b) has been seen in the sky has been put forward as evidence that Project Blue Beam is real, and such things are "tests" of the technology — namely unidentified flying objects. Existing display technology such as 3D projection mapping and holograms are put forward as foreshadowing the great light show in the sky.
This stage will apparently be accomplished with the aid of a Soviet computer that will be fed "with the minute physio-psychological particulars based on their studies of the anatomy and electro-mechanical composition of the human body, and the studies of the electrical, chemical and biological properties of the human brain", and every human has been allocated a unique radio wavelength. The computers are also capable of inducing suicidal thoughts.[15] The Soviets are (not "were") the "New World Order" people. Why NASA would use a Soviet computer when the USSR had to import or copy much of its computer technology from the West is not detailed.
The second part of Step Two happens when the holograms result in the dissolution of social and religious order, "setting loose millions of programmed religious fanatics through demonic possession on a scale never witnessed before." The United Nations plans to use Beethoven's "Ode to Joy" as the anthem for the introduction of the new age one world religion.[1][note 4]
There is relatively little to debunk in this, the most widely remembered section of the Project Blue Beam conspiracy, as the idea is so infeasible. Citing actual existing communication technology is odd if the point is for the end product to appear magical, rather than just as cheap laser projections onto clouds. This hasn't stopped some very strange conspiracy theories about such things popping up.[16] Indeed, the notion of gods being projected into the sky was floated in 1991 by conspiracy theorist Betty J. Mills.[17] And US general (and CIA shyster extraordinaire), Edward Lansdale, actually floated a plan to fake a Second Coming over Cuba to get rid of Castro.[18]
Step Three [ edit ]
Step Three is "Telepathic Electronic Two-Way Communication." It involves making people think their god is speaking to them through telepathy, projected into the head of each person individually using extreme low frequency radio waves. (Atheists will presumably hear an absence of Richard Dawkins.) The book goes to some lengths to describe how this would be feasible, including a claim that ELF thought projection caused the depressive illness of Michael Dukakis' wife Kitty.
Step Four [ edit ]
Step Four has three parts:
Making humanity think an alien invasion is about to occur at every major city; Making the Christians think the Rapture is about to happen; A mixture of electronic and supernatural forces, allowing the supernatural forces to travel through fiber optics, coax, power and telephone lines to penetrate all electronic equipment and appliances, that will by then all have a special microchip installed.[19]
Then chaos will break out, and people will finally be willing — perhaps even desperate — to accept the New World Order. "The techniques used in the fourth step is exactly the same used in the past in the USSR to force the people to accept Communism."
A device has apparently already been perfected that will lift enormous numbers of people, as in a Rapture. UFO abductions are tests of this device.
Project Blue Beam proponents believe psychological preparations have already been made, Monast having claimed that 2001: A Space Odyssey, Star Wars and the Star Trek series all involve an invasion from space and all nations coming together[3] (the first two don't, the third is peaceful contact) and that Jurassic Park propagandises evolution in order to make people think God's words are lies.
The New World Order according to Monast [ edit ]
The book detailed the theory. In the 1994 lecture, Monast detailed what would happen afterwards.[3]
All people will be required to take an oath to Lucifer with a ritual initiation to enter the New World Order. Resisters will be categorised as follows:
Christian children will be kept for human sacrifice or sexual slaves. Prisoners to be used in medical experiments. Prisoners to be used as living organ banks. Healthy workers in slave labour camps. Uncertain prisoners in the international re-education center, thence to repent on television and learn to glorify the New World Order. The international execution centre. An as yet unknown seventh classification.
The actual source of the theory [ edit ]
Joel Engel's book Gene Roddenberry: The Myth and the Man Behind Star Trek was released in 1994, shortly before Monast's lecture on Project Blue Beam:
“ ” In May 1975, Gene Roddenberry accepted an offer from Paramount to develop Star Trek into a feature film, and moved back into his old office on the Paramount lot. His proposed story told of a flying saucer, hovering above Earth, that was programmed to send down people who looked like prophets, including Jesus Christ.
All the steps of the conspiracy theory were in the unmade mid-'70s Star Trek film script by Roddenberry, which were recycled for the Star Trek: The Next Generation episode Devil's Due, broadcast in 1991.[20]
There is no evidence of deliberate fraud on Monast's part; given his head was quite thoroughly full of squirrels and confetti by this time, it's entirely plausible that he thought this was the revelation of secret information in a guise safe for propagation.[note 5] However, the actual source was so obvious that even other conspiracy theorists noticed.[21] They confidently state it was obvious that Monast had been fed deceptive information by the CIA. Of course!
Further reading [ edit ]
Not just in French, but on paper. You'd think we were Wikipedia.
Serge Monast. Project Blue Beam (NASA) . Presse libre nord-américaine, 1994. The original book. It has not been reissued by Monast's current publisher, and is practically unobtainable. If you have (or can track down) a copy, this article needs you!
. Presse libre nord-américaine, 1994. The original book. It has not been reissued by Monast's current publisher, and is practically unobtainable. If you have (or can track down) a copy, Pierre-André Taguieff. La Foire aux illuminés : Ésotérisme, théorie du complot, extrémisme. Paris, Mille et une nuits, 2005.
Paris, Mille et une nuits, 2005. Pierre-André Taguieff. L'imaginaire du complot mondial : Aspects d'un mythe moderne. Paris, Mille et une nuits, 2006.
Notes [ edit ]
↑ He was homeschooling his son and daughter; they were made wards of the state in September 1996 so that they would receive schooling. ↑ And neoconservative , though his documentation of racists and conspiracy nuts is considered pretty solid. ↑ A technical term meaning "made shit up." ↑ . Surprisingly, the Blue Beam fans have not yet noted this much. As it happens, "Ode to Joy" is already the anthem of Europe . Surprisingly, the Blue Beam fans have not yet noted this much. ↑ Possibly aided by Cooper's book, though we have no idea if Monast read Cooper's book specifically. ||||| Thousands reportedly witnessed the spectacle of a ghostly alien city floating in the clouds over the city of Foshan in the Guangdong province of China last week. Footage recorded by residents of the city shows the mysterious phenomenon as witnessed by thousands of shocked residents of Foshan on October 7, 2015.
Parts of the city came almost to a standstill as people stood in the streets, looking up at the mysterious “floating city” in the sky, which appeared to have many skyscrapers. The apparition lasted only a few minutes before it disappeared, UFO Sightings Hotspot reports.
Mysterious Universe reports that a few days after the Foshan incident, people in parts of the province of Jiangxi, China, also reported sighting a ghostly alien city in the sky.
This is not the first time that a giant city has been spotted hovering in the sky over a Chinese city. A colossal structure resembling a city with skyscrapers was seen hovering in the sky over Huangshan City in the southern Anhui province in 2011.
The Huangshan City sighting was remarkable because several stunned residents snapped pictures of the floating city showing what were clearly tall buildings or skyscrapers with trees.
The Inquisitr also reported in April an incident in March, 2011, in which hundreds of residents of the village of Dulali in Lanzai South Ward of Darazo Local Government area in Bauchi State, northern Nigeria, reported seeing a great floating city in the skies above their rural communities.
Conspiracy theorists believe that the recent spate of sightings could not be coincidence, and floating cities could be apparitions resulting from tests of the latest Project Blue Beam technology to see how residents of cities would react.
Project Blue Beam is a popular conspiracy theory that claims that NASA will soon attempt to inaugurate the Illuminati-sponsored Satanic New World Order (NWO) agenda under the authority of the Antichrist by using holographic image projection technology to simulate the second coming of Christ, or a space alien invasion of Earth.
The theory was originated by Serge Monast, a Quebecois conspiracy theorist, who predicted in the 1980s that NASA would implement the project by 2000, although he had predicted initially that the project would be implemented in 1983 and later shifted the date to 1996.
“Saw the original on Chinese chat sites. Notice the group of buildings is repeated three times? If it isn’t someone making it on their computer, it seriously could be project blue beam. Also you see s******d of HAARP images they’ve been producing in American clouds the last five years. This could be stage two of America trying to f**k with them. Stage one was the rod of god destroying the port.”
With recent developments in the use of holographic devices to project life-like movie images onto clouds, believers say that the implementation of Project Blue Beam is imminent.
A research team, called Project Nimbus, recently demonstrated a holographic device reportedly based on the principle of the zoopraxiscope that was able to project the image of a green horseman galloping across the skies.
However, not everyone believes that the ghostly city which appeared in the sky over Foshan was a Project Blue Beam test run. Some believe it was a naturally generated optical illusion. One example is the phenomenon called Fata Morgana.
A Fata Morgana is a form of mirage that can be seen on land or at sea. It involves the optical distortion and inversion of distant objects, such as boats, islands, and the coastline. The mirage often appears as a city of skyscrapers because successive images are stacked.
Fata Morgana mirages are caused by rays of light undergoing bending when they pass through layers of air with different temperatures.
[Images: YouTube Screengrab] | Too much carbon pollution? Check. Lots of billionaires? Check. A giant city floating in the sky? Well, according to Chinese TV news channels, China recently had a massive metropolis hovering over the clouds that was spotted by thousands of people, the Daily Express reports. In fact, a similar floating city was seen in Jiangxi province just days after one appeared above Foshan in the Guangdong province. And comparable China sightings go back to 2011, the Inquisitr reports. Video of a recent sighting (available here) is being interpreted differently by meteorologists, conspiracy theorists, believers in other dimensions, and believers in the power of Photoshop. According to meteorologists, such phenomena are caused by a mirage known as Fata Morgana. These are actually far-off objects like boats that appear as big as buildings when light rays bend while moving through various air temperatures. But some on the Internet are pointing to the conspiracy theory that NASA, using "Project Blue Beam" technology, will eventually simulate an alien attack or return of Jesus Christ, the Independent reports. "Interesting," reads one comment. "What if it really is a city from a parallel universe? Or maybe a glimpse into the future." Others, however, say the video is a Photoshopped hoax. |
Executive orders are one vehicle of many through which the President may exercise his authority. While the President's ability to use executive orders as a means of implementing presidential power has been established as a matter of law and practice, it is equally well established that the substance of an executive order, including any requirements or prohibitions, may have the force and effect of law only if the presidential action is based on power vested in the President by the U.S. Constitution or delegated to the President by Congress. The President's authority to issue executive orders does not include a grant of power to implement policy decisions that are not otherwise authorized by law. Indeed, an executive order that implements a policy in direct contradiction to the law will be without legal effect unless the order can be justified as an exercise of the President's exclusive and independent constitutional authority. This report first reviews the "definition" of an executive order and how it is distinguishable from other written instruments, and then provides an overview of the President's constitutional authority to issue such directives. Next, the report discusses the legal framework relied on by the courts to analyze the validity of presidential actions, and also discusses the roles of the President and Congress in modifying and revoking executive orders. Presidents have historically utilized various written instruments to direct the executive branch and implement policy. These include executive orders, presidential memoranda, and presidential proclamations. The definitions of these instruments, including the differences between them, are not easily discernible, as the U.S. Constitution does not contain any provision referring to these terms or the manner in which the President may communicate directives to the executive branch. A widely accepted description of executive orders and proclamations comes from a report issued in 1957 by the House Government Operations Committee: Executive orders and proclamations are directives or actions by the President. When they are founded on the authority of the President derived from the Constitution or statute, they may have the force and effect of law.... In the narrower sense Executive orders and proclamations are written documents denominated as such.... Executive orders are generally directed to, and govern actions by, Government officials and agencies. They usually affect private individuals only indirectly. Proclamations in most instances affect primarily the activities of private individuals. Since the President has no power or authority over individual citizens and their rights except where he is granted such power and authority by a provision in the Constitution or by statute, the President's proclamations are not legally binding and are at best hortatory unless based on such grants of authority. The distinction between these instruments—executive orders, presidential memoranda, and proclamations—seems to be more a matter of form than of substance, given that all three may be employed to direct and govern the actions of government officials and agencies. Moreover, if issued under a legitimate claim of authority and made public, a presidential directive could have the force and effect of law, "of which all courts are bound to take notice, and to which all courts are bound to give effect." The only technical difference is that executive orders and proclamations must be published in the Federal Register , while presidential memoranda are published only when the President determines that they have "general applicability and legal effect." Just as there is no definition of executive orders, presidential memoranda, and proclamations in the U.S. Constitution, there is, likewise, no specific provision authorizing their issuance. As such, authority for the execution and implementation of these written instruments stems from implied constitutional and statutory authority. In the constitutional context, presidential power is derived from Article II of the U.S. Constitution, which states that "the executive power shall be vested in a President of the United States," that "the President shall be Commander in Chief of the Army and Navy of the United States," and that the President "shall take Care that the Laws be faithfully executed." The President's power to issue these directives may also derive from express or implied statutory authority. Despite the amorphous nature of the authority to issue executive orders, presidential memoranda, and proclamations, these instruments have been employed by every President since the inception of the Republic. Notably, executive orders historically have been more contentious as Presidents have issued them over a wide range of controversial areas such as the establishment of internment camps during World War II; the suspension of the writ of habeas corpus; and equal treatment in the armed services without regard to race, color, religion, or national origin. However, Presidents have also used executive orders for arguably more mundane governing tasks such as directing federal agencies to evaluate their ability to streamline customer service delivery and establishing advisory committees. Because there is no underlying constitutional or statutory authority that dictates the circumstances under which the President must issue an executive order, it is probable that the President also could have chosen to issue presidential memoranda rather than executive orders. As a matter or historical practice, however, it seems that Presidents are more apt to utilize executive orders on matters that may benefit from public awareness or be subject to heightened scrutiny. Memoranda, on the other hand, are often used to carry out routine executive decisions and determinations, or to direct agencies to perform duties consistent with the law or implement laws that are presidential priorities. Presidents' broad usage of executive orders to effectuate policy goals has led some Members of Congress and various legal commentators to suggest that many such orders constitute unilateral executive lawmaking that impacts the interests of private citizens and encroaches upon congressional power. The Supreme Court in Youngstown Sheet & Tube Co. v. Sawyer established the framework for analyzing whether the President's issuance of an executive order is a valid presidential action. As discussed below, the framework established by Justice Robert H. Jackson in his concurring opinion has become more influential than the majority opinion authored by Justice Hugo Black, and has since been employed by the courts to analyze the validity of controversial presidential actions. In 1952, President Harry S. Truman, in an effort to avert the effects of a workers' strike during the Korean War, issued an executive order directing the Secretary of Commerce to take possession of most of the nation's steel mills to ensure continued production. This order, challenged by the steel companies, was declared unconstitutional by the Supreme Court in Youngstown . Justice Black, writing for the majority, stated that under the Constitution, "the President's power to see that laws are faithfully executed refuted the idea that he is to be a lawmaker." Specifically, Justice Black maintained that presidential authority to issue such an executive order, "if any, must stem either from an act of Congress or from the Constitution itself." Applying this reasoning, the Court concluded the President's executive order was effectively a legislative act because no statute or constitutional provision authorized such presidential action. The Court further noted that Congress rejected seizure as a means of settling labor disputes during consideration of the Taft-Hartley Act of 1947, and instead adopted other processes. Given this characterization, the Court deemed the executive order to be an unconstitutional violation of the separation-of-powers doctrine, explaining that "the Founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times." While Justice Black's majority opinion in Youngstown seems to refute the notion that the President possesses implied constitutional powers, it is important to note that there were five concurrences in the decision, four of which maintained that implied presidential authority adheres in certain contexts. Of these concurrences, Justice Jackson's has proven to be the most influential, even surpassing the impact of Justice Black's majority opinion. Jackson's concurrence, as discussed below, is based on the proposition that presidential powers may be influenced by congressional action. In his concurring opinion, Justice Jackson established a tripartite scheme for analyzing the validity of presidential actions in relation to constitutional and congressional authority. Because "[p]residential powers are not fixed but fluctuate, depending upon their disjunction or conjunction with those of Congress," Justice Jackson acknowledged that the three categories he established were a "somewhat over-simplified grouping," but they nonetheless assist in identifying "practical situations in which a President may doubt, or others may challenge, his powers, and by distinguishing roughly the legal consequences of this factor of relativity." Under the tripartite scheme, the President's authority to act is considered at a maximum when he acts pursuant to an express or implied authorization of Congress because this includes "all that he possesses in his own right plus all that Congress can delegate." Such action "would be supported by the strongest of presumptions and the widest latitude of judicial interpretation." However, where Congress has neither granted nor denied authority to the President, Justice Jackson maintained that the President could still act upon his own independent powers. For this second category, there is a "zone of twilight in which [the President] and Congress may have concurrent authority, or in which distribution is uncertain." Under these circumstances, Justice Jackson observed that congressional acquiescence or silence "may sometimes, at least as a practical matter, enable, if not invite, measures on independent presidential responsibility," yet "any actual test of power is likely to depend on the imperatives of events and contemporary imponderables rather than on abstract theories of law." In contrast, the President's authority is considered at its "lowest ebb" when he "takes measures incompatible with the express or implied will of Congress ... for he can only rely upon his own constitutional powers minus any constitutional powers of Congress over the matter." Justice Jackson observed that courts generally "sustain exclusive presidential control ... only by disabling the Congress from acting upon the subject." He cautioned that examination of presidential action under this third category deserved more scrutiny because for the President to exercise such "conclusive and preclusive" power would endanger "the equilibrium established by our constitutional system." Applying this framework to President Truman's action, Justice Jackson determined that analysis under the first category was inappropriate, due to the fact that seizure of the steel mills had not been authorized by Congress, either implicitly or explicitly. Justice Jackson also determined that the President Truman's action could not be defended under the second category because Congress had addressed the issue of seizure through statutory policies that conflicted with the President's action. Justice Jackson concluded that the President's action could be sustained only if it passed muster under the third category, that is, by finding "that seizure of such strike-bound industries is within his domain and beyond the control of Congress." Specifically, the President would have to rely on "any remainder of executive power after such powers as Congress may have over the subject" to lawfully seize steel mills. Given that the seizure of steel mills was within the scope of congressional power, the exercise of presidential power under these circumstances was "most vulnerable to attack and [left the President] in the least favorable of possible constitutional postures." Justice Jackson's framework for analyzing the validity of presidential actions has endured into the modern era. For example, the Supreme Court in Dames & Moore v. Regan referenced Justice Jackson's analytical framework when it upheld executive orders and agency regulations that nullified all non-Iranian interests in Iranian assets and suspended all settlement claims. Because the President had been delegated broad authority under the International Emergency Economic Powers Act to nullify non-Iranian interests, the Court, invoking Justice Jackson's first category, stated that such action "is supported by the strongest presumption and the widest latitude of judicial interpretation." With respect to the suspension of claims, the Court upheld the President's action on the basis that Congress had enacted legislation in the area of the President's authority to deal with international crises and had "implicitly approved the longstanding practice of claims settlements by executive agreement." However, not all courts necessarily invoke Justice Jackson's tripartite framework in evaluating executive orders and actions. For instance, in 1995 the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) in Chamber of Commerce v. Reich overturned an executive order issued by President William J. Clinton by using traditional tools of statutory interpretation. Relying on his authority pursuant to the Federal Property and Administrative Services Act (FPASA), President Clinton issued Executive Order 12954, which directed the Secretary of Labor to adopt such rules and orders as necessary to ensure that federal agencies would not contract with employers that permanently replaced striking employees. The D.C. Circuit in Reich did not invoke or refer to the Youngstown decision when reviewing the validity of the executive order. The court nonetheless determined that President Clinton's executive order, although issued pursuant to broad authority delegated to him under FPASA, was invalid and without legal effect because it conflicted with a provision of the National Labor Relations Act, which guarantees the right to hire permanent replacements during strikes. Executive orders are undoubtedly one of many tools available to Presidents to further policy goals during his Administration. By their very nature, however, executive orders lack stability, especially in the face of evolving presidential priorities. The President is free to revoke, modify, or supersede his own orders or those issued by a predecessor. The practice of Presidents modifying and revoking executive orders is exemplified particularly where orders have been issued to assert control over and influence the agency rulemaking process. Beginning with President Gerald Ford's Administration, the following timeline demonstrates the gradual modification by succeeding Presidents in supplementing the congressionally mandated rulemaking process with a uniform set of standards regarding cost-benefit considerations. President Gerald Ford issued Executive Order 11821, which required agencies to issue inflation impact statements for proposed regulations. President Jimmy Carter altered this practice with Executive Order 12044, which required agencies to consider the potential economic impact of certain rules and identify potential alternatives. President Ronald Reagan revoked President Carter's order and implemented a scheme that arguably asserted much more extensive control over the rulemaking process. He issued Executive Order 12291, which directed agencies to implement rules only if the "potential benefits to society for the regulation outweigh the potential costs to society." This required agencies to prepare a cost-benefit analysis for any proposed rule that could have a significant economic impact. President William J. Clinton later issued Executive Order 12866, which modified the system established during the Reagan Administration. While retaining many of the basic features of President Reagan's order, Executive Order 12866 arguably eased cost-benefit analysis requirements, and recognized the primary duty of agencies to fulfill the duties committed to them by Congress. President George W. Bush subsequently issued two executive orders—Executive Orders 13258 and 13422—both of which amended the Clinton executive order. Executive Order 13258 concerned regulatory planning and review, and it removed references from Clinton's executive order regarding the role of the Vice President, and instead referenced the Director of the Office of Management and Budget (OMB) or the Chief of Staff to the President. Executive Order 13422 defined guidance documents and significant guidance documents and applied several parts of the Clinton executive order to guidance documents. It also required each agency head to designate a presidential appointee to the newly created position of regulatory policy officer. Executive Order 13422 also made changes to the Office of Information and Regulatory Affairs' (OIRA) duties and authorities, including a requirement that OIRA be given advance notice of significant guidance documents. President Barack Obama revoked both of these orders via Executive Order 13497. This order also instructed the Director of OMB and the heads of executive departments and agencies to rescind orders, rules, guidelines, and policies that implemented President Bush's executive orders. In addition, President Obama issued two other executive orders on the regulatory review process. The first, Executive Order 13563, reaffirmed and supplemented the principles of regulatory review in Executive Order 12866. Obama's order addressed public participation and agency coordination in simplifying and harmonizing regulations for industries with significant regulatory requirements. The order also instructed agencies to consider flexible approaches to regulation, required them to ensure the objectivity of scientific and technical information and processes that support regulations, and mandated that agencies develop a preliminary plan to review existing significant regulations for potential modifications or repeal. The second executive order, Executive Order 13579, stated that independent regulatory agencies should also comply "to the extent permitted by law" with the goals and requirements of the first order, Executive Order 13563. Congress may also influence the duration and effectiveness of executive orders. Orders issued pursuant to authority provided to the President by Congress, as distinguished from orders that are based on the President's exclusive constitutional authority, may be legislatively modified or nullified. Congress may revoke all or part of such an order by either directly repealing the order, or by removing the underlying authority upon which the action is predicated. Either of these actions would appear to negate the legal effect of the order. Congressional repeals of executive orders are relatively rare in modern times, primarily because such legislation could run counter to the President's interests and therefore may require a congressional override of a presidential veto. One study has suggested that less than 4% of executive orders have been modified by Congress. To effectuate a repeal, Congress need only enact legislation directing that provisions of the executive order "shall not have legal effect." For example, the Energy Policy Act of 2005 explicitly revoked a December 13, 1912, executive order that had created the Naval Petroleum Reserve Numbered 2. In 1992, Congress similarly revoked an executive order issued by President George H. W. Bush that had directed the Secretary of Health and Human Services to establish a human fetal tissue bank for research purposes. The repeal legislation stated that "[t]he provisions of Executive Order 12806 ... shall not have any legal effect." Additionally, Congress may also inhibit the implementation of an executive order by preventing funds from being used to implement the order. For example, Congress has used its appropriations authority to limit the effect of executive orders by denying salaries and expenses for an office established in an executive order, or by directly denying funds to implement a particular section of an order. Conversely, if Congress supports an executive order, and wants to provide the directive with greater stability, Congress may codify the presidential order as it was issued or with certain modifications. Similarly, if the President issues an executive order on questionable legal authority, Congress may subsequently ratify the order either expressly or by implication. | Executive orders, presidential memoranda, and proclamations are used extensively by Presidents to achieve policy goals, set uniform standards for managing the executive branch, or outline a policy view intended to influence the behavior of private citizens. The U.S. Constitution does not define these presidential instruments and does not explicitly vest the President with the authority to issue them. Nonetheless, such orders are accepted as an inherent aspect of presidential power. Moreover, if they are based on appropriate authority, they have the force and effect of law. This report discusses the nature of these written instruments, executive orders in particular, with a focus on the scope of presidential authority to execute such instruments, as well as judicial and congressional responses to their issuance. |
FILE - In this Sept. 13, 2012 file photo, a Libyan man walks in the rubble of the damaged U.S. consulate, after an attack that killed four Americans, including Ambassador Chris Stevens on the night of... (Associated Press)
FILE - In this Sept. 13, 2012 file photo, a Libyan man walks in the rubble of the damaged U.S. consulate, after an attack that killed four Americans, including Ambassador Chris Stevens on the night of... (Associated Press)
WASHINGTON (AP) — A two-year investigation by the Republican-controlled House Intelligence Committee has found that the CIA and the military acted properly in responding to the 2012 attack on a U.S. diplomatic compound in Benghazi, Libya, and asserted no wrongdoing by Obama administration appointees.
Debunking a series of persistent allegations hinting at dark conspiracies, the investigation of the politically charged incident determined that there was no intelligence failure, no delay in sending a CIA rescue team, no missed opportunity for a military rescue, and no evidence the CIA was covertly shipping arms from Libya to Syria.
In the immediate aftermath of the attack, intelligence about who carried it out and why was contradictory, the report found. That led Susan Rice, then U.S. ambassador to the United Nations, to inaccurately assert that the attack had evolved from a protest, when in fact there had been no protest. But it was intelligence analysts, not political appointees, who made the wrong call, the committee found. The report did not conclude that Rice or any other government official acted in bad faith or intentionally misled the American people.
The House Intelligence Committee report was released with little fanfare on the Friday before Thanksgiving week. Many of its findings echo those of six previous investigations by various congressional committees and a State Department panel. The eighth Benghazi investigation is being carried out by a House Select Committee appointed in May.
The attacks in Benghazi killed U.S. Ambassador Christopher Stevens, foreign service officer Sean Smith, and two CIA contractors, Tyrone S. Woods and Glen Doherty. A Libyan extremist, Ahmed Abu Khatalla, is facing trial on murder charges after he was captured in Libya and taken to the U.S.
In the aftermath of the attacks, Republicans criticized the Obama administration and its then-secretary of state, Hillary Rodham Clinton, who is expected to run for president in 2016. People in and out of government have alleged that a CIA response team was ordered to "stand down" after the State Department compound came under attack, that a military rescue was nixed, that officials intentionally downplayed the role of al-Qaida figures in the attack, and that Stevens and the CIA were involved in a secret operation to spirit weapons out of Libya and into the hands of Syrian rebels. None of that is true, according to the House Intelligence Committee report.
The report did find, however, that the State Department facility where Stevens and Smith were killed was not well-protected, and that State Department security agents knew they could not defend it from a well-armed attack. Previous reports have found that requests for security improvements were not acted upon in Washington.
"We spent thousands of hours asking questions, poring over documents, reviewing intelligence assessments, reading cables and emails, and held a total of 20 committee events and hearings," said Rep. Mike Rogers, R-Mich., the committee's chairman, and Rep. C.A. Dutch Ruppersberger of Maryland, the ranking Democrat, in a joint statement.
"We conducted detailed interviews with senior intelligence officials from Benghazi and Tripoli as well as eight security personnel on the ground in Benghazi that night. Based on the testimony and the documents we reviewed, we concluded that all the CIA officers in Benghazi were heroes. Their actions saved lives," they said.
Rep. Adam Schiff, a California Democrat who serves on the intelligence panel and the Benghazi select committee, said, "It's my hope that this report will put to rest many of the questions that have been asked and answered yet again, and that the Benghazi Select Committee will accept these findings and instead focus its attention on the State Department's progress in securing our facilities around the world and standing up our fast response capabilities."
Some of the harshest charges have been leveled at Rice, now Obama's national security adviser, who represented the Obama administration on Sunday talk shows the weekend after the attack. Rice repeated talking points that wrongly described a protest over a video deemed offensive to Muslims.
But Rice's comments were based on faulty intelligence from multiple agencies, according to the report. Analysts received 21 reports that a protest occurred in Benghazi, the report said —14 from the Open Source Center, which reviews news reports; one from the CIA; two from the Defense Department; and four from the National Security Agency.
In the years since, some participants in the attack have said they were motivated by the video. The attackers were a mix of extremists and hangers on, the investigation found.
"To this day," the report said, "significant intelligence gaps regarding the identities, affiliations and motivations of the attackers remain." ||||| Story highlights Declassified version of House Intelligence Committee is released
It concludes there was no intelligence failure prior to the attack
Report describes a "flawed" process used to create talking points for Susan Rice
An investigative report prepared by the House Intelligence Committee finds little to support questions raised about CIA actions on the ground in Benghazi, Libya, the night of a deadly 2012 attack on the U.S. diplomatic compound.
The final report, from Chairman Mike Rogers, R-Michigan, and ranking member Rep. Dutch Ruppersberger, D-Maryland, concludes there was no intelligence failure prior to the attack, no stand-down order to CIA operatives trying to go assist at the besieged consular building and found conflicting intelligence in the wake of the attack about the motive and cause, which were reflected in early public comments by the administration.
But the investigation also found the security at the diplomatic outpost was weak and it described a "flawed" process used to create talking points for House Intelligence Committee members and then-U.N. Ambassador Susan Rice, whose public statements after the attack incensed critics who said the administration was avoiding calling the attack terrorism.
Photos: Photos: Attack on U.S. mission in Benghazi Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – Attackers set the U.S. mission in Benghazi, Libya, on fire on September 11, 2012. The U.S. ambassador to Libya, Christopher Stevens, and three other U.S. nationals were killed during the attack. The Obama administration initially thought the attack was carried out by an angry mob responding to a video, made in the United States, that mocked Islam and the Prophet Mohammed. But the storming of the mission was later determined to have been a terrorist attack. Hide Caption 1 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – Obama and Clinton stand at Andrews Air Force Base as the bodies of the four Americans killed are returned on September 14. Hide Caption 2 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – A desk sits inside the burnt U.S. mission on September 13, two days after the attack. Hide Caption 3 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – Damage is seen inside the U.S. mission on September 13. Hide Caption 4 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – A lounge chair and umbrella float in the swimming pool of the U.S. mission on September 13. Hide Caption 5 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – Demonstrators gather in Libya on September 12 to condemn the killers and voice support for the victims. Hide Caption 6 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – U.S. President Barack Obama, with Secretary of State Hillary Clinton on September 12, makes a statement at the White House about Stevens' death. Hide Caption 7 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – A burnt vehicle is seen at the U.S. mission in Benghazi on September 12. Hide Caption 8 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – People inspect the damage on September 12. Hide Caption 9 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – A small American flag is seen in the rubble on September 12. Hide Caption 10 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – A man stands in part of a burned-out building of the U.S. mission on September 12. Hide Caption 11 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – Smoke and fire damage is evident inside a building on September 12. Hide Caption 12 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – Half-burnt debris and ash cover the floor of one of the U.S. mission buildings on September 12. Hide Caption 13 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – The U.S. mission is seen in flames on September 11, the day of the attack. Hide Caption 14 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – A protester reacts as the U.S. mission burns on September 11. Hide Caption 15 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – A vehicle and the surrounding area are engulfed in flames on September 11. Hide Caption 16 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – Flames erupt outside of a building on September 11. Hide Caption 17 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – A vehicle burns during the attack on the U.S. mission on September 11. Hide Caption 18 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – Onlookers record the damage from the attack on September 11. Hide Caption 19 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – Onlookers walk past a burning truck and building on September 11. Hide Caption 20 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – A vehicle sits smoldering in flames on September 11. Hide Caption 21 of 22 Photos: Photos: Attack on U.S. mission in Benghazi Attack on U.S. mission in Benghazi – People duck flames outside a building on September 11. Hide Caption 22 of 22
The declassified version of the report attempts to knock down other accusations about the Benghazi incident and aftermath, finding no evidence of CIA employees being intimidated from testifying and also no indication the CIA presence in Benghazi was partially to secretly ship arms from Libya to Syria.
The September 11, 2012, attack left U.S. Ambassador Christopher Stevens, Sean Smith, Glen Doherty and Tyrone Woods dead, and immediately sparked controversy, with Republicans accusing the Obama administration of mishandling the attack and manipulating the talking points used to discuss it for political reasons.
The intelligence panel, along with several other House committees, spent the past two years interviewing witnesses and examining evidence about the Obama administration's response to the attacks and the related controversy that has been a flashpoint between Republicans and President Barack Obama over his conduct of foreign policy.
Another House committee, the Select Committee on Benghazi, is conducting its own investigation.
"The Select Committee on Benghazi received the Intelligence committee's report on the Benghazi terrorist attack (in August), and has reviewed it along with other committee reports and materials as the investigation proceeds," spokesman Jamal D. Ware said in a statement. "It will aid the Select Committee's comprehensive investigation to determine the full facts of what happened in Benghazi, Libya before, during and after the attack and contribute toward our final, definitive accounting of the attack on behalf of Congress." ||||| Getty House Intel Committee dismisses some Benghazi myths
The House Intelligence Committee dismissed on Friday a number of the most persistent myths about the 2012 terrorist attacks at a diplomatic outpost in Benghazi.
The committee, chaired by Republican Chairman Mike Rogers of Michigan, found the U.S. government didn’t fail to send assistance to the Americans under siege by Islamic militants and there was no “stand down order” from the State Department. The committee also dismissed the notion that there was an “intelligence failure” the allowed the attacks to occur.
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But the committee did rule that a number of individuals involved with Al Qaeda were involved with the attacks and Abu Sufian bin Qumu, a Libyan national, “probably played some role” in the attacks. Qumu was a prisoner at Guantanamo Bay before he was transferred to Libya in 2001.
“We spent thousands of hours asking questions, poring over documents, reviewing intelligence assessments, reading cables and emails, and held a total of 20 Committee events and hearings. We conducted detailed interviews with senior intelligence officials from Benghazi and Tripoli as well as eight security personnel on the ground in Benghazi that night,” Rogers and Maryland Rep. Dutch Ruppersberger, the top Democrat on the committee said. “Based on the testimony and the documents we reviewed, we concluded that all the CIA officers in Benghazi were heroes. Their actions saved lives.”
Some Republicans in Congress have continued to cling to initial reports that surfaced after Ambassador Chris Stevens and two others were killed in the attacks. Former Secretary of State Hillary Clinton and the White House have been routinely criticized for failing to protect Stevens and for not quickly sending aide to protect the Americans.
But Rogers’ committee has long said its investigation would disproved those myths. The report, released quietly on a Friday night, dismisses the bulk of the most damning critics against the administration. The report was first reported by the AP.
Earlier this year, the House established a select committee to investigate the attacks. A spokesperson for the panel said on Friday that Chairman Trey Gowdy (R-S.C.) would incorporate the Intel Committee’s findings into the Benghazi panel’s work.
“It will aid the Select Committee’s comprehensive investigation to determine the full facts of what happened in Benghazi, Libya before, during and after the attack and contribute toward our final, definitive accounting of the attack on behalf of Congress,” the spokesperson said.
The report is likely to spur criticism against the State Department over the shape of its security protocols as the agency knew it was unprepared to defend the outpost in case of a well-organized and heavily armed attack - a high probability in highly volatile region.
The report said State Department agents felt “ill-equipped and ill-trained to contend with the threat environment in Benghazi.” | The House Intelligence Committee spent two years investigating conspiracy theories about the 2012 Benghazi attack and has concluded they're mostly just hot air. Here's the takeaway paragraph from the AP: The investigation "determined that there was no intelligence failure, no delay in sending a CIA rescue team, no missed opportunity for a military rescue, and no evidence the CIA was covertly shipping arms from Libya to Syria." Yes, then UN ambassador Susan Rice wrongly stated that the attacks were the result of a protest against an inflammatory video, but the panel found that Rice had been given bad intelligence and that neither she nor anyone else in the White House deliberately tried to mislead the public. The report further finds no evidence that CIA officers were ordered to "stand down" during the attack or were intimidated afterward to avoid testifying, reports CNN. "We concluded that all the CIA officers in Benghazi were heroes," says Republican panel chairman Mike Rogers and ranking Democrat CA Dutch Ruppersberger. The panel does, however, fault the State Department for having weak security at the US consulate, and Politico expects that criticism to resonate. This is not the end of the Benghazi inquiries: A House select committee appointed in May is still conducting its own investigation. |
The Islamic State (IS) organization is also referred to by its former name—the Islamic State of Iraq and the Levant (ISIL)/Islamic State of Iraq and Syria (ISIS)—and the Arabic acronym Daesh (pronounced "daash," for Dawlat al-Islamiyah f'al-Iraq wa al-Sham ), which translates to the Islamic State in Iraq and the Levant/Syria. Many observers argue that changes in Iraq's political structure as a result of the U.S.-led overthrow of Saddam Hussein helped give rise to the Islamic State. The fall of Hussein's Sunni Arab-dominated government and the ascension to power of the majority Shiite Arab population fueled deep Sunni resentment that continues today. In Syria, the Islamic State has grown in size and strength in part because of the Asad regime's use of Syria's armed forces and Iranian support to try to suppress rebellion by Syria's Sunni Arab majority. The Islamic State's direct ideological and organizational roots lie in the forces built and led by the late Abu Musab al Zarqawi in Iraq from 2002 through 2006— Tawhid wal Jihad (Monotheism and Jihad) and Al Qaeda in the Land of the Two Rivers (also known as Al Qaeda in Iraq, or AQ-I). Zarqawi took advantage of Sunni animosity toward U.S. forces and feelings of disenfranchisement at the hands of Iraq's Shiites and Kurds to advance a uniquely sectarian agenda that differed from Al Qaeda's in important ways. Some experts attribute Sunni resentment to the use by some Shiites of the democratic political process to monopolize political power in Iraq. Following Zarqawi's death at the hands of U.S. forces in June 2006, AQ-I leaders repackaged the group as a coalition called the Islamic State of Iraq (ISI). ISI lost its two top leaders in 2010 and was weakened, but not eliminated, by the time of the U.S. withdrawal in 2011. In June 2014, Islamic State leaders declared their reestablishment of the caliphate ( khilafa , lit. succession to the prophet Mohammed), dropped references to Iraq and the Levant in their name, demanded the support of believing Muslims, and named Abu Bakr al Baghdadi as caliph and imam (leader of the world's Muslims). IS leaders have highlighted Baghdadi's reported descent from the Quraysh tribe—the same tribe as the Prophet Muhammad—as well as his religious training, as qualifications for his position as caliph. The group cites its implementation of several of the historical requirements of the caliphate/imamate as further grounds for the religious legitimacy of its actions. Its Muslim critics question its legitimacy and actions. See CRS Report R43612, The "Islamic State" and U.S. Policy , by [author name scrubbed] and [author name scrubbed] for more information. Prior to 2015, the majority of terrorist attacks conducted by IS supporters were in Iraq and Syria. However, in 2015 it appears IS strategy evolved to include pursuing terrorist attacks globally. In this regard, transnational IS terrorist attacks outside of Iraq and Syria may be an instrumental tactic in a broader strategic effort to draw adversaries, including the United States, into larger-scale and more direct conflict. An example of the Islamic State's evolving strategy may be demonstrated in the numerous terrorist attacks occurring in places other than Iraq and Syria with civilian deaths rising to nearly 1,000 since January 2015. See CRS Report R43612, The "Islamic State" and U.S. Policy , by [author name scrubbed] and [author name scrubbed], and CRS Insight IN10209, European Security, Islamist Terrorism, and Returning Fighters , by [author name scrubbed] and [author name scrubbed] for more information. Since 2014, some armed groups outside of Iraq and Syria have recognized the Islamic State caliphate and pledged loyalty to Abu Bakr al Baghdadi. As of late 2015, experts consider IS adherents in Yemen, Egypt, Algeria, Saudi Arabia, Libya, Afghanistan, and Nigeria to be the most significant and capable. These groups have used the Arabic word " wilayah " (state/province) to describe themselves as constituent members of a broader IS-led caliphate. The implications of such pledges of loyalty to the Islamic State on groups' objectives, tactics, and leadership structures appear to vary and may evolve. The Obama Administration has stated that groups and individuals that are associated with the Islamic State and that participate in hostilities against the United States or its coalition partners are legitimate military targets pursuant to the 2001 Authorization for the Use of Military Force against Al Qaeda, subject to executive branch discretion. For more information, see " IS Affiliates and Adherents " in CRS Report R43612, The "Islamic State" and U.S. Policy , by [author name scrubbed] and [author name scrubbed]; CRS Insight IN10199, The Islamic State in Egypt: Implications for U.S.-Egyptian Relations , by [author name scrubbed]; " Armed Islamist Groups and Related Terrorism Threats " in CRS Report RL33142, Libya: Transition and U.S. Policy , by [author name scrubbed]; and CRS Insight IN10242, Nigeria's Boko Haram and the Islamic State , by [author name scrubbed] and [author name scrubbed]. While IS funding streams remain fluid, the group's largest revenue sources appear (based on open-source information) to include oil sales, taxation and extortion, and the sale of looted antiquities. Oil sales initially provided the majority of the group's revenue, but gradually declined as a percentage of overall IS profits due to an extensive campaign of airstrikes by the United States and coalition partners against oil and gas facilities used by the group. U.S. officials have noted that the Islamic State's financial strength depends not only on its income but also on its expenses, and the extent to which it is able to devote its resources to military operations. U.S. officials have stated that the Islamic State's decision to hold and govern territory is a financial burden for the group, and thus a vulnerability that the United States could potentially exploit by diminishing the group's ability to generate and utilize revenue. If the Islamic State cannot afford the expenses associated with governing its territory, some argue that the resulting public backlash would undermine its ability to rule. Targeting the Islamic State's finances is one of five core lines of effort to degrade and defeat the terrorist organization. General John Allen, the recently retired U.S. Special Presidential Envoy for the Global Coalition to Counter ISIL, stated in early 2015 that the United States cannot defeat the Islamic State through military efforts alone, and highlighted the need to deprive the group of access to financial resources. At present, U.S. policy focuses on disrupting IS revenue streams, limiting the group's access to formal financial systems, and imposing sanctions on the group's senior leadership and financial facilitators. The United States also has sought to collaborate with international partners, including through cooperation on financial intelligence collection and analysis. See CRS Report R43980, Islamic State Financing and U.S. Policy Approaches , by [author name scrubbed], [author name scrubbed], and [author name scrubbed] for more information. On September 10, 2014, President Obama announced the formation of a global coalition to "degrade and ultimately defeat" IS. Subsequently, some 60 nations and partner organizations agreed to participate, contributing either military forces or resources (or both) to the campaign. In Brussels in December 2014, these 60 partners agreed to organize themselves along five "lines of effort," with at least two countries in the lead for each: Supporting military operations, capacity building, and training (led by the United States and Iraq); Stopping the flow of foreign terrorist fighters (led by The Netherlands and Turkey); Cutting off IS access to financing and funding (led by Italy, the Kingdom of Saudi Arabia, and the United States); Addressing associated humanitarian relief and crises (led by Germany and the United Arab Emirates); and Exposing IS's true nature (led by the United Arab Emirates, the United Kingdom, and the United States). Coalition participation tends to be fluid, with each country contributing capabilities that are commensurate with their own national interests and comparative advantage. Since August 2015, several coalition participants have changed the roles, missions, and capabilities of the military forces they are applying to counter the Islamic State. Along with the United States, France has been at the forefront of the international coalition conducting military operations against IS in Iraq. Until September 2015, France had ruled out conducting operations in Syria—in part because it did not want to inadvertently support the Asad regime—but changed course due to growing concerns about IS. Following the November attacks, President François Hollande vowed to redouble the military campaign to destroy the Islamic State. Within 48 hours of the attacks, France launched its most aggressive air strikes yet, on the IS stronghold of Raqqa, Syria; the number of French fighter jets conducting airstrikes is to increase from 12 to 38. Hollande has also stressed that he will focus on unifying and bolstering the international military coalition fighting IS. This would include greater cooperation with the United States, Russia, and countries in the region. Russia initiated military operations in Syria in September 2015, but it did not begin robustly targeting Islamic State forces until Russian authorities concluded in mid-November that a "self-made" explosive device had brought down a Russian airliner over the Egyptian Sinai Peninsula on October 31, 2015, killing all 224 passengers on board. Statements released by the Islamic State and affiliated groups claimed responsibility for the crash, and depicted the improvised explosive devise allegedly used to carry out the attack. Russia's military operations in Syria to support the Asad regime currently appear to be independent of the global counter-IS coalition's activities. See CRS Report R44135, Coalition Contributions to Countering the Islamic State , by [author name scrubbed]; CRS Insight IN10301, France: Efforts to Counter Islamist Terrorism and The Islamic State , by [author name scrubbed]; and CRS Insight IN10360, Russian Deployments in Syria Complicate U.S. Policy , by [author name scrubbed] et al. for more information. The U.S. government continues to lead a multilateral coalition that seeks to "degrade and ultimately destroy" the Islamic State organization by progressively reducing the geographic and political space, manpower, and financial resources available to it. Stated U.S. strategy to achieve this objective consists of a number of "lines of effort," including, in partnership with several European and Arab states, direct military action, support for Iraqi and Syrian partner ground forces, intelligence gathering and sharing, and efforts to restrict flows of foreign fighters and disrupt the Islamic State's finances. Administration officials have identified areas where they believe progress has been made in implementing U.S. and allied strategy to date, but they continue to state that it may take a considerable amount of time to achieve the full range of U.S. objectives. They also note the potential for delays or setbacks. See CRS Report R43612, The "Islamic State" and U.S. Policy , by [author name scrubbed] and [author name scrubbed] for more information. High-profile terrorist attacks attributed to the Islamic State organization in several countries are altering the terms of U.S. and allied policy debates about the threat posed by the group and current strategic approaches to defeating it. At President Obama's direction, elements of the U.S. government continue to lead a multilateral coalition that seeks to "degrade and ultimately destroy" the Islamic State organization by progressively reducing the geographic and political space, manpower, and financial resources available to it. Stated U.S. strategy to achieve this objective consists of a number of "lines of effort," including, in partnership with several European and Arab states: direct military action, support for Iraqi and Syrian partner ground forces, intelligence gathering and sharing, and efforts to restrict flows of foreign fighters and disrupt the Islamic State's finances. Administration officials have identified areas where they believe progress has been made in implementing U.S. and allied strategy to date, but they continue to state that it may take a considerable amount of time to achieve the full range of U.S. objectives, while noting the potential for delays or setbacks. See CRS Report R43612, The "Islamic State" and U.S. Policy , by [author name scrubbed] and [author name scrubbed] for more information. The President in his August 2014 notifications to Congress of deployments and airstrikes in Iraq indicated his powers as Commander in Chief and Chief Executive under Article II of the Constitution gave him authority to use military force against the Islamic State. Subsequently, however, Obama Administration officials and the President's September 2014 notifications to Congress for airstrikes and other actions in Iraq and Syria stated that two enacted authorizations for use of military force (AUMFs), the Authorization for Use of Military Force (2001 AUMF; P.L. 107-40 ), and the Authorization for Use of Military Force Against Iraq Resolution of 2002 (2002 AUMF; P.L. 107-243 ), provide authorization for certain U.S. military strikes against the Islamic State in Iraq and Syria, as well as the Khorasan Group of Al Qaeda in Syria. Despite these assertions of adequate existing legislative authority, the President indicated on November 5, 2014 that he intended to enter into discussions with congressional leaders to develop a new AUMF specifically targeting the Islamic State, in order to "right-size and update whatever authorization Congress provides to suit the current fight, rather than previous fights" authorized by the 2001 and 2002 AUMFs. The President called on Congress to enact a new AUMF targeting the Islamic State in his January 2015 State of the Union address, and transmitted a draft AUMF to Congress on February 11, 2015. A number of Members of Congress have introduced legislative proposals for a new AUMF in the 113 th and 114 th Congresses, stating that existing legislation authorizing military force is outdated and insufficient when applied to the Islamic State crisis. Some Members of Congress have expressed the opinion that a new authorization is necessary to prevent the President from entering into a large-scale, long-term conflict akin to the recent conflicts in Afghanistan and Iraq. Others argue that the existing 2001 and 2002 AUMFs, authorizing the use of military force against Al Qaeda and the Taliban after the 9/11 terror attacks, and the invasion of Iraq to remove Saddam Hussein from power, respectively, are too limited in their scope and unnecessarily constrain the President's ability to defeat terrorist and extremist threats to U.S. national security and interests. These Members of Congress have in some cases introduced new authorizations that would expand the President's authority to meet growing and evolving threats, possibly applying to groups other than the Islamic State and in places other than Iraq and Syria. In many cases, Members of Congress have stressed the importance of Congress's role in the exercise of the war power in the Constitution, stating that Congress should not abdicate its responsibility to participate in the country's decision to use military force against the Islamic State. These proposals have included several types of authorizing and constraining provisions, including the following: identifying legitimate targets of military force, including the Islamic State, associated forces of the Islamic State, and others; prohibiting long-term, large-scale use of U.S. armed forces; limiting geographic area of military operations; placing time limits on existing and new authority to use military force; repealing existing AUMFs or stating that new authority supersedes older authorities with regard to the Islamic State; and requiring regular reporting, certification of certain conditions, and consultation with Congress regarding the campaign against the Islamic State. See CRS Report R43760, A New Authorization for Use of Military Force Against the Islamic State: Issues and Current Proposals in Brief , by [author name scrubbed] for more information. Al Baghdadi and other IS leaders have threatened to attack the United States since 2012. They routinely describe the United States and its non-Muslim allies as "crusaders," and encourage Islamic State supporters to attack U.S. and allied persons, facilities, and interests by any means possible overseas and at home. The group's propaganda suggests that it welcomes the prospect of direct military confrontation with the United States and U.S. partners, viewing such conflict as a harbinger of apocalyptic battles described in some Islamic religious materials. For example, in November 2014, Al Baghdadi argued that the Islamic State would continue to expand and welcomed the potential introduction of Western ground forces, saying: "soon, the Jews and Crusaders will be forced to come down to the ground and send their ground forces to their deaths and destruction, by Allah's permission." IS leaders frequently challenge the United States and others to "come down and meet us on the ground," and they view such developments as imminent and likely to end in the destruction of their enemies. Statements released by the Islamic State in the wake of the November 2015 Paris attacks contained similarly goading sentiments. In this regard, transnational IS terrorist attacks may be an instrumental tactic in a broader strategic effort to draw adversaries, including the United States, into larger-scale and more direct conflict. While statements released by the Islamic State following the November 2015 Paris attacks identified locations in Washington, DC, and New York City as potential targets for future attacks, officials and observers continue to debate the extent to which the group has the capability to direct and conduct such attacks inside the United States. U.S. officials have suggested that the individuals responsible for deadly 2015 shooting attacks in Texas and Tennessee were inspired by jihadist-Salafist propaganda, but they have not alleged any operational links between the Islamic State organization and the attackers. These U.S. attacks followed a spate of similar so-called lone wolf attacks in Europe and elsewhere, in which the alleged perpetrators appeared to be inspired by the Islamic State and/or Al Qaeda but have not necessarily been operationally linked to them or their affiliates. The Islamic State has praised these and other incidents and continues to urge supporters to conduct such attacks if they are able. In this context, U.S. officials have expressed increasing concern about the IS threat in congressional testimony and other public statements. In November 2014, National Counterterrorism Center (NCTC) Director Nicholas Rasmussen said in testimony before the Senate Select Committee on Intelligence that "the [ISIL] threat beyond the Middle East is real, although thus far limited in sophistication. However, if left unchecked, over time we can expect ISIL's capabilities to mature, and the threat to the United States homeland ultimately to increase." In October 2015, Rasmussen expressed concern about "the group's trajectory" given that it has "the ingredients that we traditionally look at as being critical to the development of an external operations capability." In the wake of the Paris, Beirut, and Sinai attacks of November 2015, and an October 2015 attack in Ankara (Turkey's capital), CIA Director John Brennan said that the Islamic State organization "has developed an external operations agenda that it is now implementing with lethal effect." He argued that the United States and its allies will have to deal with IS threats "for quite some time" and suggested that one potential motivation for the group's embrace of transnational terrorism as a tactic and strategic tool is its desire to signal continuing momentum in the face of limited progress and battlefield setbacks in Iraq and Syria since late 2014. Brennan stated his view that it is "inevitable that ISIL and other terrorist groups are going to continue to try and to attempt to carry out these attacks. That is an inevitability for at least as far as the eye can see. But to me, it's not inevitable that they're going to succeed." Efforts to prevent future attacks and assess future risks to U.S. domestic security are likely to draw from analysis and forensic study of where, how, and by whom the recent attacks were planned, organized, and directed. For more information on U.S. counterterrorism and security management , and related homeland security issues, see CRS Report R44041, Selected Issues in Homeland Security Policy for the 114th Congress , coordinated by [author name scrubbed]. There is no exact, official, and publicly available count of Americans who have been drawn to the Islamic State. The Federal Bureau of Investigation (FBI) has estimated that "upwards of 200 Americans have traveled or attempted to travel to Syria to participate in the conflict." The State Department has suggested that the Islamic State has attracted more than 22,000 foreign fighters from more than 100 countries. In a general sense, it appears that the current challenges posed by the Islamic State largely require U.S. law enforcement to identify individuals who pose a danger as terrorists and preempt their efforts to do harm. All of this draws on resources, strategies, and programs developed in response to 9/11. Analysis of U.S. counterterrorism investigations since September 11, 2001, suggests that the Islamic State (IS) and its acolytes may present broad challenges for domestic law enforcement. These challenges involve understanding and responding to a variety of terrorist actors who arguably can be sorted into five categories: The Departed—Americans, often described as foreign fighters, who plan to leave or have left the United States to fight for the Islamic State. This group includes suspects scheming to travel but who are caught before they arrive in IS territory. The Returned—American foreign fighters who trained with or fought in the ranks of the Islamic State and come back to the United States, where they can potentially plan and execute attacks at home. The Inspired—Americans lured—in part—by IS propaganda to participate in terrorist plots within the United States. The Others—Foreign IS adherents who radicalize in and originate from places outside of the United States or non-American foreign fighters active in the ranks of the Islamic State. These persons could try to enter the United States when done fighting abroad. The Lost—Unknown Americans who fight in the ranks of the Islamic State but do not plot terrorist attacks against the United States. Such individuals may come home after fighting abroad and remain unknown to U.S. law enforcement. Additionally, some American IS fighters will never book a trip back to the United States. (The post-9/11 record of U.S. counterterrorism investigations suggests this prospect. None of the Americans who have fought for al-Shabaab, a terrorist group based in Somalia, have come home to plot attacks.) Finally, some American IS supporters will perish abroad. See CRS Report R44110, The Islamic State's Acolytes and the Challenges They Pose to U.S. Law Enforcement: In Brief , by [author name scrubbed] for more information. Because modern-day terrorists and criminals are constantly developing new tools and techniques to facilitate their illicit activities, law enforcement is challenged with leveraging its tools and authorities to keep pace. For instance, interconnectivity and technological innovation have not only fostered international business and communication, they have also helped criminals carry out their operations. At times, these same technological advances have presented unique hurdles for law enforcement and officials charged with combating malicious actors. Enhanced data encryption, in part a response to privacy concerns following Edward Snowden's revelations of mass government surveillance, has opened the discussion on how this encryption could impact law enforcement investigations. Law enforcement officials have likened the new encryption to "a house that can't be searched, or a car trunk that could never be opened." There have been concerns that malicious actors, from savvy criminals to terrorists to nation states, may rely on this very encryption to help conceal their illicit activities. There is also concern that law enforcement may not be able to bypass the encryption, their investigations may be stymied, and criminals will operate above the law. Critics of these concerns contend that law enforcement maintains adequate tools and capabilities needed for their investigations. See CRS Report R44187, Encryption and Evolving Technology: Implications for U.S. Law Enforcement Investigations , by [author name scrubbed], and CRS Insight IN10400, Paris Attacks and "Going Dark": Intelligence-Related Issues to Consider , by [author name scrubbed] for more information. The layers of the Internet go far beyond the surface content that many can easily access in their daily searches. The other content is that of the Deep Web, content that has not been indexed by traditional search engines such as Google. The furthest corners of the Deep Web, segments known as the Dark Web, contain content that has been intentionally concealed. The Dark Web may be used for legitimate purposes as well as to conceal terrorism-related, criminal, or otherwise malicious activities. It is the exploitation of the Dark Web for illegal practices that has garnered the interest of officials and policymakers. Just as terrorists and criminals can rely upon the anonymity of the Dark Web, so too can the law enforcement, military, and intelligence communities. They may, for example, use it to conduct online surveillance and sting operations and to maintain anonymous tip lines. Anonymity in the Dark Web can be used to shield officials from identification and hacking by adversaries. It can also be used to conduct a clandestine or covert computer network operation such as taking down a website or a denial of service attack, or to intercept communications. Reportedly, officials are continuously working on expanding techniques to deanonymize activity on the Dark Web and identify malicious actors online. See CRS Report R44101, Dark Web , by [author name scrubbed] for more information. Iraq's sectarian and ethnic divisions—muted toward the end of the 2003-2011 U.S. military intervention in Iraq—have reemerged to fuel a major challenge to Iraq's stability and to U.S. policy in Iraq and the broader Middle East region. The resentment of Iraq's Sunni Arabs toward the Shiite-dominated central government facilitated the capture in 2014 of nearly one-third of Iraqi territory by the Sunni Islamist extremist group called the Islamic State (also known as the Islamic State of Iraq and the Levant, or ISIL). Iraq's Kurds have been separately embroiled in political and territorial disputes with Baghdad, although those differences have been subordinated to the common struggle against the Islamic State. See CRS Report RS21968, Iraq: Politics and Governance , by [author name scrubbed] and [author name scrubbed] for more information. The rise of IS and Russia's military intervention on behalf of the Syrian government have reshaped debates over U.S. policy toward the ongoing civil conflict in Syria, now in its fifth year. The Islamic State controls large areas of northeastern and central Syria, from which it continues to launch assaults on forces opposed to and aligned with the government of President Bashar al Asad. Meanwhile, fighting elsewhere pits government forces and their foreign allies against a range of anti-government insurgents, some of whom have received limited U.S. assistance. Russian military intervention in support of Asad poses a direct challenge to U.S. goals in Syria, and is raising new questions about the future of the conflict and U.S. strategy. See CRS Report RL33487, Armed Conflict in Syria: Overview and U.S. Response , coordinated by [author name scrubbed] for more information. On November 13, 2015, coordinated terrorist attacks in Paris left at least 129 people dead and over 350 injured at 6 locations throughout the city. French President François Hollande attributed the attacks to the Islamic State terrorist organization (which subsequently claimed responsibility), and asserted that France's response would be "merciless." The attacks were the worst-ever terrorist incident on French soil, and the latest in a number of examples of Islamist terrorism in France and Europe over the past year and a half. These attacks have reinforced European concerns about European citizens training and fighting with extremist groups in foreign conflicts (especially in Syria and Iraq) and heightened fears that terrorists could slip into Europe, including as part of an ongoing influx of migrants and refugees. News reports indicate that one of the assailants killed during the attacks may have entered Europe through Greece in early October with a Syrian passport as part of the refugee flows (authorities have not conclusively made this link); at least two suspects—both French nationals—may have traveled to Syria. While evidence suggests that the Islamic State was directly involved in planning and carrying out these attacks, worries also persist about "homegrown" extremists inspired by Islamist propaganda to commit violence at home without ever traveling abroad. Other recent terrorist incidents in Europe include The May 2014 killing of four people at the Jewish Museum in Brussels, Belgium; the suspect is a French Muslim who reportedly spent a year with Islamist fighters in Syria. The January 2015 attacks in Paris in which gunmen killed 17 people in three related incidents that targeted the satirical magazine Charlie Hebdo , police officers, and a kosher supermarket. The perpetrators of the attacks were French-born Muslims, with possible ties to Al Qaeda in Yemen or the Islamic State. The February 2015 shootings in Copenhagen, Denmark, in which a self-radicalized Danish-born citizen of Palestinian descent murdered two individuals—one at a cafe that had been hosting a free speech debate, another at a synagogue—and wounded five police officers. The attempted August 2015 attack on a train traveling from Amsterdam to Paris that was thwarted by six passengers, including three Americans; the suspect is a Moroccan man who may have traveled to Syria. See CRS Insight IN10209, European Security, Islamist Terrorism, and Returning Fighters , by [author name scrubbed] and [author name scrubbed]; CRS Report R44003, European Fighters in Syria and Iraq: Assessments, Responses, and Issues for the United States , coordinated by [author name scrubbed]; and CRS Insight IN10301, France: Efforts to Counter Islamist Terrorism and The Islamic State , by [author name scrubbed] for more information. The rising number of U.S. and European citizens traveling to fight with rebel and terrorist groups in Syria and Iraq has emerged as a growing concern for U.S. and European leaders, including Members of Congress. Several deadly terrorist attacks in Europe over the past year—including the killing of 17 people in Paris in January 2015—have heightened the perception that these individuals could pose a serious security threat. Increasingly, terrorist suspects in Europe appear to have spent time with groups fighting in the Middle East, especially with the Islamic State organization. Others, like the gunman who murdered two individuals in Copenhagen in February 2015, seem to have been inspired by Islamist extremist propaganda. U.S. intelligence suggests that more than 20,000 foreign fighters have traveled to the Syria-Iraq region, including at least 3,400 Westerners, since 2011. The vast majority of Western fighters are thought to be from Europe, although roughly 150 Americans have traveled or attempted to travel to Syria. U.S. authorities estimate that a handful of Americans have died in the conflict; they also assert that military operations against the Islamic State group since August 2014 have killed thousands of fighters, including an unknown number of foreigners. U.S. officials and analysts contend that the potential foreign fighter threat underscores the importance of close law enforcement ties with key European allies and existing U.S.-EU information-sharing arrangements, including those related to tracking terrorist financing and sharing airline passenger data. Some U.S. policymakers, including several Members of Congress, have expressed particular worries about European fighters in Syria and Iraq because the U.S. Visa Waiver Program (VWP) permits short-term visa-free travel to the United States for citizens of most European countries. At the same time, many point out that the VWP's existing security controls require VWP travelers to provide advanced biographic information to U.S. authorities and may help limit travel by known violent extremists. See CRS Report R44003, European Fighters in Syria and Iraq: Assessments, Responses, and Issues for the United States , coordinated by [author name scrubbed] for more information. Europe is experiencing what many consider to be its worst migration and refugee crisis since World War II, as people flee conflict and poverty in bordering regions. With the war in Syria in its fifth year, and with 4.1 million refugees in neighboring countries, more Syrians have been leaving for Europe. Other migrants and refugees originate from elsewhere in the Middle East, as well as Afghanistan, Africa, and some Western Balkans countries. Experts characterize the influxes as mixed migration, defined as flows of different groups of people—such as economic migrants, refugees, asylum-seekers, stateless persons, trafficked persons, and unaccompanied children—who travel the same routes and use the same modes of transportation (see text box). Sometimes also termed irregular migrants, these individuals do not have the required documentation, such as passports and visas, and may use smugglers and unauthorized border crossings. The surge of migrants and refugees has significantly challenged European governments and the 28-member European Union (EU), which has come under criticism for lacking coherent and effective policies. The lines of distinction between groups in the mixed migration flows have raised questions about determination of status and protection required. A key policy consideration is whether the movement is voluntary or forced. The United Nations High Commissioner for Refugees (UNHCR) asserts that 85% of those arriving in Europe by sea in 2015 are from refugee-producing countries. European governments maintain that at least some individuals seeking to enter Europe are economic migrants. See CRS In Focus IF10259, Europe's Migration and Refugee Crisis , by [author name scrubbed] and [author name scrubbed] for more information. With some European countries pledging to accept increased numbers of Syrian and other asylum seekers in the face of a refugee crisis, attention is focused on the United States and its plans to admit Syrian and other refugees in FY2016 and beyond. The Obama Administration initially proposed an overall refugee ceiling of 75,000 for FY2016 and held consultations with Congress on that proposal, as required by law. On September 20, 2015, however, Secretary of State John Kerry announced that the refugee ceiling for FY2016 would instead be 85,000. Previously the Administration had announced that the United States would admit at least 10,000 Syrian refugees in FY2016. The FY2015 worldwide refugee ceiling is 70,000 and the allocation for the Near East/South Asia region, which includes Syria, is 31,000. The FY2015 refugee admissions proposal included a discussion of U.S. plans to resettle Syrian refugees. From October 1, 2010, through August 31, 2015, the United States has admitted a total of 1,494 Syrian refugees, almost 1,300 of that total since October 1, 2014. See CRS Insight IN10355, Syrian Refugee Admissions to the United States , by [author name scrubbed], and CRS Report R44277, Syrian Refugee Admissions and Resettlement in the United States: In Brief , by [author name scrubbed] for more information. A refugee is a person fleeing his or her country because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion. Typically, the annual number of refugees that can be admitted into the United States, known as the refugee ceiling, and the allocation of these numbers by region are set by the President after consultation with Congress at the start of each fiscal year. For FY2015, the worldwide refugee ceiling is 70,000, with 68,000 admissions numbers allocated among the regions of the world and 2,000 numbers comprising an unallocated reserve. An unallocated reserve is to be used if, and where, a need develops for refugee slots in excess of the allocated numbers. The FY2015 regional allocations are as follows: Africa (17,000), East Asia (13,000), Europe and Central Asia (1,000), Latin America/Caribbean (4,000), and Near East/South Asia (33,000). Overseas processing of refugees is conducted through a system of three priorities for admission. Priority 1 comprises cases involving persons facing compelling security concerns. Priority 2 comprises cases involving persons from specific groups of special humanitarian concern to the United States (e.g., Iranian religious minorities). Priority 3 comprises family reunification cases involving close relatives of persons admitted as refugees or granted asylum. For more information on U.S. immigration inspections, the visa waiver program, and related border security issues, see CRS Report R44041, Selected Issues in Homeland Security Policy for the 114th Congress , coordinated by [author name scrubbed], and CRS Report RL31269, Refugee Admissions and Resettlement Policy , by [author name scrubbed]. The terrorist attacks in Paris last week, for which the Islamic State has claimed responsibility, have renewed concerns about terrorist travel. Following reports that at least one of the perpetrators of the attacks was carrying a Syrian passport, there has been heightened scrutiny and debate concerning the resettlement of refugees from war-torn Syria to Europe and the United States. Some of the tools the federal government employs to prevent individuals from traveling to, from, or within the United States to commit acts of terrorism include Terrorist Databases and Screening, No-Fly List and Selectee List, Criminal Sanctions, Passport Restrictions on Travel to Specific Countries, and Immigration restrictions. In some cases, the application of these tools may depend on different factors, including whether the suspected terrorist is a U.S. or foreign national. See CRS Legal Sidebar WSLG1438, Legal Tools to Deter Travel by Suspected Terrorists: A Brief Primer , by [author name scrubbed] and [author name scrubbed], and CRS Report R42336, Terrorist Watch List Screening and Background Checks for Firearms , by [author name scrubbed] for more information. In order to protect national security, the government maintains various terrorist watchlists, including the "No Fly" list, which contains the names of individuals to be denied boarding on commercial airline flights. Travelers on the No Fly list are not permitted to board an American airline or any flight on a foreign air carrier that lands or departs from U.S. territory or flies over U.S. airspace. Some persons have claimed that their alleged placement on the list was the result of an erroneous determination by the government that they posed a national security threat. In some cases, it has been reported that persons have been prevented from boarding an aircraft because they were mistakenly believed to be on the No Fly list, sometimes on account of having a name similar to another person who was actually on the list. As a result, various legal challenges to placement on the list have been brought in court. The Due Process Clause provides that no person shall be "deprived of life, liberty, or property, without due process of law." Accordingly, when a person has been deprived of a constitutionally protected liberty interest, the government must follow certain procedures. Several courts have found that placement on the No Fly list may impair constitutionally protected interests, including the right to travel internationally, and the government's redress procedures must therefore satisfy due process. Typically, due process requires that the government provide a person with notice of the deprivation and an opportunity to be heard before a neutral party. However, the requirements of due process are not fixed, and can vary according to relevant factors. When determining the proper procedural protections in a given situation, courts employ the balancing test articulated by the Supreme Court in Matthews v. Eldridge, which weighs the private interests affected against the government's interest. Courts applying this balancing test might consider several factors, including the severity of the deprivation involved in placement on the No Fly list. In addition, courts may examine the risk of an erroneous deprivation under the current procedural framework and the potential value of imposing additional procedures on the process. Finally, courts may inquire into the government's interest in preserving the status quo, including the danger of permitting plaintiffs to access sensitive national security information. See CRS Report R43730, Terrorist Databases and the No Fly List: Procedural Due Process and Hurdles to Litigation , by [author name scrubbed] for more information. Responding to reports that one individual involved in the Paris attacks was carrying a Syrian passport—which subsequent reports indicate may have been fake or stolen—a number of governors have recently expressed an intention to restrict the resettlement of Syrian refugees within their states. These announcements have prompted questions about states' authority in the refugee resettlement process and, particularly, whether a state concerned about the resettlement of Syrian refugees within its jurisdiction may take action to forestall or prevent such resettlement. It is not always clear from a governor's statements what he or she means when saying, for example, that a state "will temporarily suspend accepting new Syrian refugees." However, states would appear to have some discretion as to the terms on which state agencies participate in the federally funded refugee resettlement program, although a state likely could not opt to participate actively in the resettlement of refugees from some countries but not others. In contrast, a state lacks the power to prohibit a Syrian refugee admitted into the United States from physically entering or remaining within the state's jurisdiction. See CRS Legal Sidebar WSLG1440, Can States and Localities Bar the Resettlement of Syrian Refugees Within Their Jurisdictions? , by [author name scrubbed] and [author name scrubbed] for more information. The following table provides names and contact information for selected CRS experts on related foreign policy, defense, legal, U.S. domestic policy, and other associated legislative issues. | In the wake of the deadly November 13, 2015, terrorist attacks in Paris, U.S. policymakers are faced with a wide range of strategy and operational considerations related to the activities of and threats emanating from the Islamic State (IS). A terrorist attack such as this prompts an examination of U.S. domestic security precautions; the role of allies and coalition partners; the appropriate military and diplomatic reactions; the safety and security of infrastructure and that of travelers; and numerous additional discrete issues that require the active involvement of dozens of federal, state, and local government agencies. With the attacks in Beirut, over Egypt, and in Paris, the Islamic State has demonstrated a transnational capability that suggests its strategic objectives and tactics have evolved, gaining strength in some areas and losing capacity in others. The response to these attacks by the United States and other nations continues to evolve as the threat posed by IS changes. This report poses frequently asked questions with answers excerpted from other CRS products. Each section contains references to the full reports in which the material appears. This report will be updated as additional products become available and events warrant. |
Sitting in her living room wearing a short jean skirt, high-heeled espadrilles and a spandex top with a plunging neckline, the prostitute described how she and another woman were approached by a group of American men at a discotheque. In an account consistent with the official version of events coming out of Washington, but could not be independently confirmed, she said the men bought a bottle of Absolut vodka for the table and when that was finished bought a second one.
“They never told me they were with Obama,” she said, addressing published reports that some agents may have openly boasted to prostitutes that they were there protecting the president. “They were very discreet.”
A taxi driver who picked up the woman at the Hotel Caribe the morning of the encounter said he heard her and another woman recount the dispute over payment. When approached by a reporter for The New York Times , the woman was initially reluctant to speak about what had occurred. As she nervously told her story, a friend gave details that seemed to corroborate her account.
There was a language gap between the woman, 24, who declined to give her full name, and the American man who sat beside her at the bar and eventually invited her to his room. She agreed, stopped on the way to buy condoms but told him he would have to give her a gift. He asked how much. Not knowing he worked for Mr. Obama but figuring he was a well-heeled foreigner, she said, she told him $800.
The price alone, she said, indicates she is an escort, not a prostitute. “You have higher rank,” she said. “An escort is someone who a man can take out to dinner. She can dress nicely, wear nice makeup, speak and act like a lady. That’s me.”
By 6:30 the next morning, after being awoken by a telephone call from the hotel front desk reminding her that, under the hotel’s rules for prostitutes, she had to leave, whatever deal the two had agreed on had broken down. She recalled that the man told her he had been drunk when they discussed the price. He countered with an offer of 50,000 pesos, the equivalent of about $30.
Disgusted with such a low amount, she pressed the matter. He became angry, ordered her out of the room and called her an expletive, she said.
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She said she was crying and went across the hall, where another escort had spent the night with an American man from the same group. Both women began trying to get the money.
They knocked on the door but got no response. She threatened to call the police, but the man’s friend, who appeared on the scene, begged her not to, saying they did not want trouble. Finally, she said, she left to go home but came across a police officer stationed in the hallway, who called in an English-speaking colleague.
He accompanied her back to the room and the dispute escalated. Two other Americans from the club emerged from their rooms and stood guard in front of their friend’s locked door. The two Colombian officers tried to argue the woman’s case.
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A hotel security officer arrived. Eventually, she lowered her demand to $250, which she said was the amount she has to pay the man who helps find her customers. Eager to resolve the matter fast, the American men eventually gave her a combination of dollars and pesos worth about $225, and she left.
It was only days later, once a friend she had shared her story with called to say that the dispute had made the television news, that she learned that the man was a Secret Service agent.
She is dismayed, she said, that the news reports described her as a prostitute, as if she walks the streets picking up just anyone.
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“It’s the same, but it’s different,” she said, indicating that she is much more selective about her clients and charges much more than a streetwalker. “It’s like when you buy a fine rum or a BlackBerry or an iPhone . They have a different price.”
The woman veered between anger and fear as she told of her misadventure. “I’m scared,” she said, indicating that she did not want the man she spent the night with to get into any trouble but feared that he might retaliate.
“This is something really big,” she said. “This is the government of the United States . I have nervous attacks. I cry all the time.”
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The Secret Service declined to comment on the woman’s account, but a United States official who has been briefed on the inquiry said the details were generally consistent with what agents have said. “On the whole, it’s pretty accurate,” the official said, indicating that the woman at the center of the dispute at the hotel had not yet been interviewed.
The Secret Service has expanded its investigation to look at its employees’ conduct on previous presidential trips, the person briefed on the investigation said. So far, investigators have not uncovered anything similar to what apparently happened in Colombia last week, the person said.
Besides the 11 Secret Service personnel, 10 military personnel, including explosives experts and dog handlers, are under scrutiny in a separate Pentagon investigation, officials said.
“There was no evidence that these women were seeking these guys out — that they were waiting for Secret Service agents — but all of that is being looked into,” said Representative Peter T. King , the chairman of the House Committee on Homeland Security.
Mr. King, a New York Republican, who was briefed on the matter this week by Mr. Sullivan, said the Secret Service agents at the hotel had provided conflicting reports about the night’s events. “Some of them were saying they didn’t know they were prostitutes,” he said. “Some are saying they were women at the bar. I understand that there was quite a bit of drinking.”
“I fully support what Mark is doing,” Mr. King said of Mr. Sullivan. “I know that he wanted to take strong action once he had a legal basis.”
Senator Susan Collins of Maine , the senior Republican on the Homeland Security Committee, said the woman’s account generally comported with what Secret Service officials said occurred. But she noted differences in some details, including the specifics of the amount of money in dispute. “It helps the Secret Service if in fact the guy did not identify himself,” said Ms. Collins, who has raised concerns about a potential security breach.
In a letter to Mr. Sullivan, Representative Darrell Issa , Republican of California , the chairman of the House Committee on Oversight and Government Reform, and the committee’s ranking member, Elijah Cummings, Democrat of Maryland , said the Secret Service personnel in Colombia had brought “foreign nationals into contact with sensitive security information” and were potentially exposed to “blackmail and other forms of potential compromise.”
Mr. Issa and Mr. Cummings listed 10 requests for information that they want answered by May 1. “Your swift and decisive action in response to this scandal has given us confidence that the agency will complete a thorough investigation and take steps to ensure that similar lapses in judgment will never again jeopardize the important work of the U.S. Secret Service,” the representatives said.
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As for cooperating with the investigators for the Secret Service who are seeking to interview the prostitutes as well as witnesses from the bar and outside the hotel room, the woman who was involved in the payment dispute said she was not interested in that. She said she was planning to leave Cartagena soon. ||||| They knocked on the door but got no response. She threatened to call the police, but the man’s friend, who appeared on the scene, begged her not to, saying they did not want trouble. Finally, she said, she left to go home but came across a police officer stationed in the hallway, who called in an English-speaking colleague.
He accompanied her back to the room and the dispute escalated. Two other Americans from the club emerged from their rooms and stood guard in front of their friend’s locked door. The two Colombian officers tried to argue the woman’s case.
A hotel security officer arrived. Eventually, she lowered her demand to $250, which she said was the amount she has to pay the man who helps find her customers. Eager to resolve the matter fast, the American men eventually gave her a combination of dollars and pesos worth about $225, and she left.
It was only days later, once a friend she had shared her story with called to say that the dispute had made the television news, that she learned that the man was a Secret Service agent.
She is dismayed, she said, that the news reports described her as a prostitute, as if she walks the streets picking up just anyone.
“It’s the same, but it’s different,” she said, indicating that she is much more selective about her clients and charges much more than a streetwalker. “It’s like when you buy a fine rum or a BlackBerry or an iPhone. They have a different price.”
The woman veered between anger and fear as she told of her misadventure. “I’m scared,” she said, indicating that she did not want the man she spent the night with to get into any trouble but feared that he might retaliate.
“This is something really big,” she said. “This is the government of the United States. I have nervous attacks. I cry all the time.”
The Secret Service declined to comment on the woman’s account, but a United States official who has been briefed on the inquiry said the details were generally consistent with what agents have said. “On the whole, it’s pretty accurate,” the official said, indicating that the woman at the center of the dispute at the hotel had not yet been interviewed.
The Secret Service has expanded its investigation to look at its employees’ conduct on previous presidential trips, the person briefed on the investigation said. So far, investigators have not uncovered anything similar to what apparently happened in Colombia last week, the person said.
Besides the 11 Secret Service personnel, 10 military personnel, including explosives experts and dog handlers, are under scrutiny in a separate Pentagon investigation, officials said.
“There was no evidence that these women were seeking these guys out — that they were waiting for Secret Service agents — but all of that is being looked into,” said Representative Peter T. King, the chairman of the House Committee on Homeland Security.
Mr. King, a New York Republican, who was briefed on the matter this week by Mr. Sullivan, said the Secret Service agents at the hotel had provided conflicting reports about the night’s events. “Some of them were saying they didn’t know they were prostitutes,” he said. “Some are saying they were women at the bar. I understand that there was quite a bit of drinking.”
“I fully support what Mark is doing,” Mr. King said of Mr. Sullivan. “I know that he wanted to take strong action once he had a legal basis.”
Senator Susan Collins of Maine, the senior Republican on the Homeland Security Committee, said the woman’s account generally comported with what Secret Service officials said occurred. But she noted differences in some details, including the specifics of the amount of money in dispute. “It helps the Secret Service if in fact the guy did not identify himself,” said Ms. Collins, who has raised concerns about a potential security breach.
In a letter to Mr. Sullivan, Representative Darrell Issa, Republican of California, the chairman of the House Committee on Oversight and Government Reform, and the committee’s ranking member, Elijah Cummings, Democrat of Maryland, said the Secret Service personnel in Colombia had brought “foreign nationals into contact with sensitive security information” and were potentially exposed to “blackmail and other forms of potential compromise.”
Mr. Issa and Mr. Cummings listed 10 requests for information that they want answered by May 1. “Your swift and decisive action in response to this scandal has given us confidence that the agency will complete a thorough investigation and take steps to ensure that similar lapses in judgment will never again jeopardize the important work of the U.S. Secret Service,” the representatives said.
As for cooperating with the investigators for the Secret Service who are seeking to interview the prostitutes as well as witnesses from the bar and outside the hotel room, the woman who was involved in the payment dispute said she was not interested in that. She said she was planning to leave Cartagena soon. ||||| The Secret Service says three employees are out of the agency in the wake of a prostitution scandal in Colombia.
Of the three workers forced out in the scandal, one is a supervisor who was allowed to retire. Another is a supervisor who has been designated for removal for cause, which requires that the employee be given 30 days' notice and a chance to respond with the help of a lawyer; and a third employee, not a supervisor, has quit.
The agency says its investigation into allegations of misconduct by 11 agents is in its early stages and is still ongoing. The remaining eight agents are on administrative leave.
Secret Service has been investigating charges that the agents brought prostitutes back to their hotel in Cartagena, Colombia, last week.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
The prostitution scandal at the Secret Service took a sharp political turn Wednesday as presumptive Republican presidential nominee Mitt Romney said he would fire the agents involved and suggested a lack of leadership led to the incident. In Washington and Colombia, site of the incident involving agents, military personnel and at least 20 women, separate U.S. government investigations into the episode were already under way.
"I'd clean house," Romney told radio host Laura Ingraham. "The right thing to do is to remove people who have violated the public trust and have put their play time and their personal interests ahead of the interests of the nation."
While Romney suggested to Ingraham that a leadership problem led to the scandal, he told a Columbus, Ohio, radio station that he has confidence in Secret Service Director Mark Sullivan.
"I believe the right corrective action will be taken there and obviously everyone is very, very disappointed," Romney said. "I think it will be dealt with (in) as aggressive a way as is possible given the requirements of the law."
The Romney campaign would not say whether he had been briefed on the situation or was relying upon media reports for details.
The scandal, which has become an election-year embarrassment for the Obama administration, erupted last week after 11 Secret Service agents were sent home from Cartagena, Colombia, after a night of partying that reportedly ended with at least some of them bringing prostitutes back to their hotel. The special agents and uniformed officers were in Colombia in advance of President Barack Obama's arrival for the Summit of the Americas. They have been suspended and the agency has revoked their security clearance.
At least 10 military personnel who were staying at the same hotel are also being investigated for alleged misconduct.
Two U.S. military officials have said they include five Army Green Berets. One of the officials said the group also includes two Navy Explosive Ordinance Disposal technicians, two Marine dog handlers and an Air Force airman. The officials spoke on condition of anonymity because the investigation is still under way.
Exact details of what happened at the Hotel Caribe are still unclear, but multiple investigations are under way.
People briefed on the incident have said the agents brought women back to the Cartagena hotel, where other members of the U.S. delegation and the White House press corps also were staying. Overnight visitors were required to leave identification at the front desk and leave by 7 a.m. When one woman hadn't left, by one account, it raised questions among hotel staff and police, who investigated. They found the woman with the agent in a hotel room and a dispute arose over whether the agent should have paid her.
Secret Service's Office of Professional Responsibility, which handles that agency's internal affairs, is investigating and the Department of Homeland Security's Office of Inspector General has been notified.
Sullivan, who this week has briefed lawmakers behind closed doors, said he has referred to the case to an independent government investigator.
Col. Scott Malcom, a spokesman of U.S. Southern Command, which organized the military team assigned to support the Secret Service's mission in Cartagena, said Wednesday that an Air Force colonel is leading the military investigation and arrived in Colombia with a military lawyer Tuesday morning.
The troops are suspected of violating curfews set by their commanders.
"They were either not in their room or they showed up to their room late while all this was going on or they were in their room with somebody who shouldn't be there," Malcom said.
Numerous lawmakers have called for a thorough investigation and have suggested that hearings may be in order, though none has yet been scheduled.
House Speaker John Boehner, R-Ohio, said that for now, he is interested in what actually happened. He did not address how much responsibility Obama should bear or whether Congress should hold hearings.
The scandal is expected to come up next week on Wednesday when Homeland Security Secretary Janet Napolitano appears before the Senate Judiciary Committee for a previously scheduled oversight hearing.
___
Associated Press writers Laurie Kellman, Julie Pace and Steve Peoples in Washington and Frank Bajak in Bogota, Colombia, contributed to this report. | The Secret Service scandal has cost three agency employees their jobs so far, reports AP. (One quit, one supervisor retired, and another supervisor is in the process of being fired.) The New York Times, meanwhile, scored an interview with the 24-year-old escort at the heart of the case, the one whose argument with an agent over payment—"I tell him, 'Baby, my cash money'"—sparked the whole mess. Among the details: She says a group of US men approached her and a friend at a disco, and she agreed to accompany one guy back to his hotel for $800. The agents were "very discreet" and never said they were with the president. The next morning, her client said he didn't remember the deal, gave her $30, and ordered her from the room. She made a scene in the hallway, and other Americans got her about $225, so she left. By then, however, hotel security and local cops were on the scene. Click for the full story, which depicts the escort as both angry and scared over the scandal. |
Hours before convicted killer Marcellus Williams was scheduled to die by lethal injection, Missouri's governor has halted his execution. His attorneys argued that recent DNA evidence shows he is innocent in the killing of a former newspaper reporter. (Reuters)
Missouri Gov. Eric Greitens (R) on Tuesday stayed the scheduled execution of Marcellus Williams, just hours before the death-row inmate was set to be put to death for the 1998 killing of a former newspaper reporter.
Williams’s looming lethal injection prompted scrutiny and a last-ditch appeal to the U.S. Supreme Court from his attorneys, who pointed to new DNA evidence in arguing that Missouri may have been on the verge of executing the wrong person.
Greitens said he would appoint a board to look into the new DNA evidence and other factors before issuing a report about whether or not Williams should be granted clemency.
“A sentence of death is the ultimate, permanent punishment,” Greitens said in a statement. “To carry out the death penalty, the people of Missouri must have confidence in the judgment of guilt.”
[Earlier this year, Arkansas executed four inmates in eight days]
Williams, 48, was convicted in 2001 of brutally killing Felicia “Lisha” Gayle, who had been a reporter with the St. Louis Post-Dispatch. Gayle was in her home when she was stabbed 43 times with a butcher knife, according to court records.
Williams was scheduled to be executed in 2015 for the high-profile killing, but the state Supreme Court stayed his lethal injection, allowing him time to obtain the new DNA testing.
Attorneys for Williams have argued he is innocent, pointing to DNA tests they say produced “conclusive scientific evidence that another man committed this crime.” They say this evidence shows that DNA belonging to someone else was found on the murder weapon, exonerating Williams.
“They’re never going to ever confront an actual innocence cause more persuading than this involving exonerating DNA evidence,” said Kent Gipson, one of Williams’s attorneys. “I’ve seen a lot of miscarriages of justice, but this one would take the cake.”
State officials, though, said they still believed Williams is guilty because of other “compelling non-DNA evidence.”
[Johnson & Johnson says its drug shouldn’t be used in executions]
In court filings, the office of Joshua D. Hawley, Missouri’s attorney general, listed some of these other factors, describing two people — a man who served time with Williams and Williams’s girlfriend — who both told police that he confessed to the killing. Williams had also sold a laptop stolen from Gayle’s home, Hawley’s office wrote in the filings, and items belonging to Gayle were found in a car Williams drove the day she was killed.
“Based on the other, non-DNA, evidence in this case, our office is confident in Marcellus Williams’ guilt and plans to move forward,” Loree Anne Paradise, Hawley’s deputy chief of staff, wrote in an email Tuesday.
After Williams’s execution was stayed, Paradise said her office was still confident in what the jury determined in 2001.
“We remain confident in the judgment of the jury and the many courts that have carefully reviewed Mr. Williams’ case over sixteen years,” she wrote Tuesday afternoon. “We applaud the work of the numerous law enforcement officers who have dedicated their time and effort to pursuing justice in this case.”
Attorneys for Williams and state officials had both made their arguments to Supreme Court Justice Neil M. Gorsuch, who is assigned cases from the federal circuit covering Missouri. Neither Gorsuch nor the full court had publicly weighed in before Greitens halted the scheduled execution.
[Pfizer tightens restrictions to keep drugs from being used in executions]
A little more than four hours before Williams was set to be executed, Greitens signed an executive order halting the lethal injection. Greitens also appointed a board of inquiry to further consider Williams’s clemency request and issue a report about whether he should be executed or have his sentence commuted.
In his statement, Greitens said he was appointing the board “in light of new information.” According to Greitens’s executive order, the board will consider “newly discovered DNA evidence” as well as “any other relevant evidence not available to the jury.”
The controversy surrounding Williams’s scheduled lethal injection had drawn unusual attention to what would be a relatively rare execution in the United States, where the death penalty has been declining for years.
There have been 16 people executed so far this year in the United States, one of them in Missouri, which is among a handful of states still regularly executing inmates. Last year, there were 20 executions in the United States, the fewest in 25 years. That number is expected to increase slightly this year, but 2017 will still see one of the lowest annual number of executions than most years since 1990.
[Why the U.S. could see more executions this year]
Death sentences have become less common nationwide, dropping from 315 such sentences in 1996 to 31 last year, according to the Death Penalty Information Center, a Washington-based group that tracks capital punishment. Public support for the death penalty has also fallen over the same period. In a Pew Research Center survey last year, American support for capital punishment fell below 50 percent for the first time since Richard Nixon was president. A Gallup poll, also conducted last year, found support remained at 60 percent. In both cases, the numbers represented a sharp drop from the mid-1990s, when 4 in 5 Americans backed the death penalty.
While some states have abandoned capital punishment or been unable to carry out executions amid an ongoing drug shortage, Missouri has been an outlier. Missouri is one of three states, along with Texas and Georgia, to execute at least one inmate each year since 2013.
In 2015, when Missouri last intended to execute Williams, the state’s Supreme Court stayed the lethal injection. A laboratory tested evidence from the scene of Gayle’s killing and a DNA expert determined that Williams “could not have contributed” to the DNA found on the knife that killed the former reporter, Williams’s attorneys said. Last week, the Missouri Supreme Court rejected a request to stay Williams’s execution without explanation.
Missouri officials had argued in court that in order to exonerate Williams, “DNA evidence would have to explain how Williams ended up with the victim’s property, and why two witnesses independently said he confessed to them, or at least provide a viable alternate suspect.” They also said that just showing “unknown DNA” on the knife handle does not alone prove Williams’s innocence.
“The item was a kitchen knife with both male and female DNA on the handle,” Hawley’s office wrote in a filing to the Supreme Court. “It is reasonable to assume people not involved in the murder handled the knife in the kitchen. And there is no reason to believe Williams would not have worn gloves during a burglary and murder, as he wore a jacket to conceal his bloody shirt after he left the murder scene.”
[Ohio executes Ronald Phillips, resuming lethal injections after three-year break]
Gipson argued that the case against Williams was always weak, consisting primarily of the statements of two jailhouse informants who claimed Williams had confessed to the crime. Gipson also said that bloody footprints at the scene did not match Williams’s shoe size and added that bloody fingerprints were never tested or compared to Williams’s fingerprints because they were lost by police.
The DNA testing, which Williams’s attorneys said was enabled by advances in technology, formed the main argument they made in appealing to the U.S. Supreme Court.
“A DNA profile was developed from the handle of the knife that was found in the victim’s body and that does not match the DNA of Marcellus,” Gipson said Tuesday, adding that three separate experts have concluded that the DNA left on the knife and at the scene was a match for another man and not Williams. “It’s clear that the DNA on the knife is the DNA of the killer. … Each expert has concluded that you can scientifically exclude Marcellus as the contributor of the DNA on the knife.”
Civil rights groups also weighed in on the case, both due to Williams’s claims of innocence as well as racial undertones in the prosecution of a black man charged with killing a white woman.
“The Supreme Court has emphasized over and over that because death is a unique punishment there is need for heightened reliability before it’s imposed,” said Sam Spital, director of litigation for the NAACP Legal Defense Fund, which is not directly involved in Williams’s case. “One of the really significant questions raised by Mr. Williams’s case is, what does it mean when you have issues of innocence?”
Like Williams’s attorneys, Spital noted the lack of forensic evidence linking Williams to the crime as well as the new DNA evidence. Spital also pointed to another concern, echoing attorneys for Williams, who described the case as racially charged. Spital said six of the seven potential black jurors in the case were struck from the jury pool — in one case because the potential juror “looked like” Williams.
“This execution has to be stayed so these substantial questions of innocence can be considered, in addition to some real concerns about race discrimination,” Spital said before the governor had issued the stay.
This story has been updated since it was first published.
Read more:
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An Arkansas death row inmate took their father’s life. Here’s why they don’t want the killer executed.
Drug companies take aim at executions and demand their drugs back
Ohio’s youngest death row inmate never touched the murder weapon. Why was he sentenced to death? ||||| FILE - This February 2014 file photo provided by the Missouri Department of Corrections shows death row inmate Marcellus Williams. Missouri Gov. Eric Greitens halted Williams’ scheduled execution Tuesday,... (Associated Press)
FILE - This February 2014 file photo provided by the Missouri Department of Corrections shows death row inmate Marcellus Williams. Missouri Gov. Eric Greitens halted Williams’ scheduled execution Tuesday,... (Associated Press)
ST. LOUIS (AP) — The Latest on Missouri's planned execution of inmate Marcellus Williams (all times local):
3:15 p.m.
Protesters are rejoicing after Missouri Gov. Eric Greitens stopped the planned execution of an inmate who maintains his innocence.
A small group of protesters who traveled to the Missouri Capitol in Jefferson City from Kansas City wrote the governor a thank-you note on the spot after learning Tuesday that Greitens is issuing a stay of execution for Marcellus Williams. Williams was convicted of fatally stabbing former St. Louis Post-Dispatch reporter Lisha Gayle during a 1998 burglary at her suburban St. Louis home.
Williams had been scheduled for execution at 6 p.m. Tuesday.
The governor's decision comes after Williams' attorneys cited DNA evidence found on the murder weapon that matched another unknown person, but not Williams. But St. Louis County prosecutor Bob McCulloch said there's "zero possibility" he's innocent.
Greitens says he will appoint a five-member board of inquiry to make a recommendation concerning whether Williams should be executed.
___
1:55 p.m.
Missouri Gov. Eric Greitens has halted the scheduled execution of condemned killer Marcellus Williams after DNA raised questions about his guilt.
The Republican governor said in an email Tuesday that he was issuing a stay of execution for Williams, who was convicted of fatally stabbing former St. Louis Post-Dispatch reporter Lisha Gayle during a burglary at her suburban St. Louis home in 1998. Williams was scheduled for execution at 6 p.m. Tuesday.
The governor's decision comes after Williams' attorneys cited DNA evidence found on the murder weapon that matched another unknown person, but not Williams. But St. Louis County prosecutor Bob McCulloch said there was ample other evidence to convict Williams, and that there was "zero possibility" he was innocent.
Greitens says he will appoint a five-member board of inquiry that will include retired judges. The board will make a recommendation to the governor concerning whether Williams should be executed. No timetable has been set.
___
1:25 p.m.
Death penalty opponents and others are asking Missouri Gov. Eric Greitens to stop the planned execution of an inmate who maintains his innocence.
Missourians for Alternatives to the Death Penalty and Missouri NAACP officials on Tuesday delivered copies of more than 185,000 signatures asking Greitens to save Marcellus Williams. He's scheduled to be executed at 6 p.m. Tuesday. His attorneys asked Greitens for clemency.
Williams was sentenced to death in the 1998 fatal stabbing of Lisha Gayle, a former St. Louis Post-Dispatch reporter who left journalism for social work. Authorities say she surprised Williams while he was robbing her home in the St. Louis suburb of University City.
Williams' attorneys contend that testing conducted in December using techniques that weren't available at the time of the killing showed that DNA found on the knife matches an unknown man, but not Williams.
___
1:15 p.m.
St. Louis County's prosecutor says there is "zero possibility" that an inmate who is scheduled to die is innocent of the fatal stabbing that put him on death row.
Marcellus Williams is due to be executed at 6 p.m. Tuesday for fatally stabbing former St. Louis Post-Dispatch reporter Lisha Gayle during a 1998 robbery at her home in University City, a St. Louis suburb.
Williams' attorneys cite DNA evidence on the murder weapon that matches another unknown man, but not Williams. But St. Louis County prosecutor Bob McCulloch says the DNA tests were simply inconclusive.
McCulloch says there is ample other evidence that Williams committed the crime.
Williams would be the second man executed in Missouri this year.
___
10:40 a.m.
Death penalty opponents are protesting Missouri's planned execution of an inmate who maintains his innocence.
Missourians for Alternatives to the Death Penalty and other groups are organizing rallies and vigils throughout the state ahead of the scheduled 6 p.m. Tuesday execution of Marcellus Williams.
One will take place outside of the Capitol office of Republican Gov. Eric Greitens, whom Williams has asked for clemency.
Williams was sentenced to death in the 1998 fatal stabbing of Lisha Gayle, a former St. Louis Post-Dispatch reporter who left journalism for social work. Authorities say she surprised Williams while he was robbing her home in the St. Louis suburb of University City.
Williams' attorneys contend that testing conducted in December using techniques that weren't available at the time of the killing showed that DNA found on the knife matches an unknown man, but not Williams.
___
12:05 a.m.
Missouri is preparing for its second execution of 2017, even as condemned inmate Marcellus Williams continues to declare his innocence.
Williams is scheduled to die by lethal injection at 6 p.m. Tuesday at the state prison in Bonne Terre for the 1998 stabbing death of Lisha Gayle. The onetime St. Louis Post-Dispatch reporter surprised the burglar and was killed at her University City home.
Attorneys for Williams contend that testing conducted in December using techniques that were not available at the time of the killing showed DNA found on the knife matches an unknown man, but not Williams. They say previous DNA testing of hairs from Gayle's shirt and fingernails also excluded Williams, and that footprints at the scene did not match Williams. ||||| (CNN) A newly-created board will review the case of a convicted murderer, after Missouri Gov. Eric Greitens issued a stay of execution on Tuesday in light of new DNA evidence.
"A sentence of death is the ultimate, permanent punishment," Greitens said in a statement. "To carry out the death penalty, the people of Missouri must have confidence in the judgment of guilt. In light of new information, I am appointing a Board of Inquiry in this case."
The execution of Marcellus Williams, 48, had been scheduled for Tuesday evening.
His attorneys said that DNA evidence unavailable during his 2001 trial proved his innocence.
However, the Missouri Attorney General's Office had argued the execution should be carried out, saying the DNA evidence doesn't overcome non-DNA evidence that connects the inmate to the crime.
In a statement, Greitens announced the creation of a new five-person Board of Inquiry. The board, which will have subpoena power, will review evidence, in addition to newly discovered evidence, and offer a recommendation to the governor, who will determine whether Williams is granted clemency.
A spokesman for the governor said the stay will remain in place as long it's necessary for the case's review and for the governor to make a final decision.
Greitens' decision Tuesday was praised by the Innocence Project, which assisted Williams' lawyers in asking the governor to convene the board.
"We are relieved and grateful that Gov. Greitens halted Missouri's rush to execution and appointed a Board of Inquiry to hear the new DNA and other evidence supporting Mr. Williams' innocence," said Nina Morrison, senior staff attorney at the Innocence Project.
"While many Americans hold different views on the death penalty, there is an overwhelming consensus that those sentenced to death should be given due process and a full hearing on all their claims before an execution, and the governor's action honors that principle."
The Death Penalty Information Center, a Washington, DC nonprofit,, said the governor's decision to stay Williams' execution is "an important step in ensuring that Missouri does not execute an innocent man."
Defense attorney Larry Komp that he was "ecstatic" upon hearing about the stay, and added that he thought Williams felt similarly.
"He was thoughtful and I believe happy, and asked where do we go from here," Komp said. "His reaction was the same as mine: Happy for 30 seconds and then 'Alright, let's get to work.'"
In a statement, St. Louis County Prosecutor Robert P. McCulloch said he is "confident that any Board and the Governor, after a full review of all evidence and information, will reach the same conclusion" that the jury and several courts have reached over the past 20 years.
Lawyers: His DNA isn't on murder weapon
Williams was convicted in the death of Felicia Gayle, 42, a former reporter for the St. Louis Post-Dispatch newspaper who was stabbed 43 times inside her home in August 1998.
The newly acquired evidence shows Williams' DNA was not found on the murder weapon, Williams' lawyers say, though DNA from another male was found.
That evidence was not available when Williams went to trial in 2001, court documents say. Williams maintains his innocence and says he was convicted on the testimony of individuals who were, themselves, convicted felons.
Felicia Gayle
Forensic DNA expert and biologist Greg Hampikian, who was hired by defense lawyers, told CNN on Monday that "when you're stabbing, DNA transfers because of restriction and force. If you're stabbing anyone, you have a good chance of transferring your DNA because of that force."
The analysis of DNA on the knife "isn't enough to incriminate someone, but it is enough to exclude somebody," he said. "It's like finding a Social Security card with some blurred numbers. There's still enough there to at least exclude someone."
Hair samples found at the crime scene don't match Williams' DNA, Hampikian said. A footprint found at the scene also does not match the defendant's shoes, his lawyers said.
But the state attorney general's office, in addressing the new DNA evidence in court documents filed in federal court last week in opposition to a stay of execution, offered a possible explanation of why none of Williams' DNA was found on the knife.
State confident in his guilt
The new DNA evidence "does not come close to showing Williams is actually innocent," the documents state. "It would be unsurprising if Williams, who wore a coat from the crime scene to cover his bloody shirt, wore gloves when he committed the burglary and the murder," the documents say.
The office said Williams' guilt was proven without DNA evidence.
"Based on the other, non-DNA, evidence in this case, our office is confident in Marcellus Williams' guilt," said Loree Anne Paradise, deputy chief of staff for Attorney General Josh Hawley.
The non-DNA evidence includes a laptop belonging to the victim's husband, which Williams sold and police recovered, and some of the victim's personal items, which police found in the trunk of the car Williams drove, according to court documents.
Williams got picked up about three weeks after Gayle was killed on unrelated charges. His cellmate from that time at a local jail, Henry Cole, and Laura Asaro, Williams' girlfriend, testified for the state, saying Williams told them separately that he committed the murder, according to the documents filed by the state attorney general.
Rejected by state Supreme Court
Williams' defense filed a brief Monday night with Supreme Court Associate Justice Neil Gorsuch. The governor's stay means that the justices won't act on the issue for now.
The Missouri Supreme Court on August 15 turned down defense lawyers' bid to have the execution stopped and didn't provide a reason, according to the St. Louis Post-Dispatch
The case has drawn high-profile advocates. Sister Helen Prejean, the Roman Catholic nun who fights the death penalty and was featured in the movie "Dead Man Walking," is involved in the case. Amnesty International is urging Gov. Eric Greitens, a Republican, to grant clemency.
"It's gaining public attention," Amnesty International researcher Rob Freer said of the case. "I think there is a heightened sensitivity that it is now proven that the capital justice system" has errors, he said.
Samuel Spital, the director of Litigation at the NAACP Legal Defense & Educational Fund, said the lack of physical evidence linking Williams to the murder is "not the only disturbing aspect" of the case.
The trial prosecutor was allowed to preemptively strike six out of seven prospective black jurors, Spital told CNN, noting that Williams is black and Gayle was white.
"The prosecutor offered as a race 'neutral' explanation for one of the strikes that the black juror looked like Mr. Williams and that the juror worked for the Post Office, even though the same prosecutor raised no objection to a white juror who worked for the Post Office," Spital said. "Whatever one's views of capital punishment, it is both morally and constitutionally intolerable for a death sentence to be imposed if the defendant is innocent or if the verdict is marred by racial discrimination."
Son: 'He's going to be murdered'
The execution was to be carried out at the prison in Bonne Terre.
"Given the tenets of his religion (Islam) that he is very devout about, he believes it will be Allah's will and he is at peace with that," attorney Komp said before Greitens' decision. "Whatever will be will be. It's astounding."
Marcellus Williams
Williams' son, Marcellus Williams II, said Monday that his father is not one to show pain.
"He's at peace. I think tomorrow he's going to be murdered. He (is) an innocent man, and that's not right," the younger Williams told CNN.
Williams II says he's never doubted his father's innocence and credited him with being a strong influence in his life.
"Someone murdered that woman, but it wasn't my father," he said. "I wish they would find the right suspect and charge them to the fullest extent of the law."
Gayle's widower, Dan Picus, is declining interviews, according to his wife.
In an editorial titled, "The death penalty debate hits close to home this time," the Post-Dispatch remembered Gayle and said she would not have favored the execution.
She "was a kind and gentle woman who went out of her way to do nice things for people. She'd left the newspaper in 1992 to do full-time volunteer work."
The editorial said the paper "opposes capital punishment under any and all circumstances, believing its administration is always arbitrary and always irrevocable. It has no deterrent value. If the state must execute, there must be no room for doubt." | With only hours to spare, the execution of a convicted murderer was stayed by the governor of Missouri, CNN reports. According to the Washington Post, 48-year-old Marcellus Williams was convicted in 2001 of the 1998 murder of Felicia Gayle, who was stabbed 43 times in her home. But attorneys for Williams say new evidence—namely DNA found on the murder weapon—provides “conclusive scientific evidence that another man committed this crime.” On Tuesday, Gov. Eric Greitens issued a stay of execution and formed a five-person Board of Inquiry to look into the matter. "A sentence of death is the ultimate, permanent punishment," Greitens says. "To carry out the death penalty, the people of Missouri must have confidence in the judgment of guilt." The decision was celebrated by a group of protesters at the Missouri Capitol, the AP reports. And a lawyer for the Innocence Project says they are "relieved and grateful." Attorneys for Williams say DNA on the murder weapon doesn't match Williams but belongs to an unidentified person. Regardless, the Missouri Attorney General's Office had been pushing for the execution to go ahead as planned, stating the DNA evidence isn't enough to prove Williams' innocence in the face of other evidence, including testimonies from Williams' girlfriend and a man he was imprisoned with. St. Louis County prosecutor Bob McCulloch says there is "zero possibility" that Williams is not responsible for Gayle's murder. |
“In my mid-20s, an actor told me, ‘Acting ain’t no puzzle,’ ” Hoffman said, after returning to his seat. “I thought: ‘Ain’t no puzzle?!?’ You must be bad!” He laughed. “You must be really bad, because it is a puzzle. Creating anything is hard. It’s a cliché thing to say, but every time you start a job, you just don’t know anything. I mean, I can break something down, but ultimately I don’t know anything when I start work on a new movie. You start stabbing out, and you make a mistake, and it’s not right, and then you try again and again. The key is you have to commit. And that’s hard because you have to find what it is you are committing to.”
For all of his struggles, Hoffman works a lot — he’s a very active co-artistic director of the LAByrinth Theater Company, a multicultural collective in New York that specializes in new American plays. LAB mounted five productions last year, thanks in large part to Hoffman’s diligent involvement with every aspect of the process, from fund-raising to directing to acting. “I’ve seen him tear tickets and seat people at LAB productions,” said John Patrick Shanley, the writer and director of “Doubt” and himself a LAB company member. In his 17-year-long career, Hoffman has also made more than 40 films, including “Doubt,” for which he has been nominated for a Golden Globe as best supporting actor, and “Synecdoche, New York,” which was also released this year. “Synecdoche,” which was written and directed by Charlie Kaufman, is a hugely ambitious film that deals with death and art and how they come to inform one another. Hoffman plays a theater director, Caden Cotard, who wins a MacArthur and uses the prize money to begin an autobiographical play so enormous that it swallows his actual life. The movie is, as Manohla Dargis wrote in her glowing review in The Times, “about . . . the search for an authentic self in an unauthentic world.” The plot may get murky and the worlds within worlds (within worlds) are often confusing, but the film lingers in your memory, largely because of Hoffman’s performance. As he grows old, disintegrates, misses romantic connections and suffers loss after loss in pursuit of his artistic vision, Hoffman remains the emotional center of the film.
“There were days when I was three different ages,” Hoffman said while the cast of “Riflemind” took a break between the first act and the second. “I’d be married, and then two hours later my family would be dead. Charlie seemed to be interested in the idea of life moving faster as you age. And the fear of missed opportunities. In life, do you ever really know if you’re missing an opportunity? No, you really don’t. And you’re never really finished either, unless the finish is dying, and you don’t really want to think about that too much.” Hoffman paused. “Synecdoche” clearly had resonance for him. Hoffman is not a carefree person; he resolutely refuses to live lightly. “Phil is hard to know,” John Patrick Shanley said. “Phil and his longtime girlfriend, Mimi [O’Donnell], came to a party at my house, and he had on three coats and a hat. I said, ‘Take off one of your coats; it’s hot in here.’ His girlfriend said, ‘He’ll maybe take it off in a half-hour.’ It’s such an obvious metaphor, but Phil has a protective cocoon that he sheds very slowly. It takes him a while to make friends with his environment. And yet you know the men he plays the minute you meet them.”
Caden Cotard seems to echo many of Hoffman’s own internal debates and anxieties. “I took ‘Synecdoche’ on because I was turning 40, and I had two kids, and I was thinking about this stuff — death and loss — all the time,” Hoffman continued. “The workload was hard, but what made it really difficult was playing a character who is trying to incorporate the inevitable pull of death into his art. Somewhere, Philip Roth writes: ‘Old age isn’t a battle; old age is a massacre.’ And Charlie, like Roth, is quite aware of the fact that we’re all going to die.” Hoffman looked around the theater. The stage manager was arranging furniture; the actors were lolling on a sofa; Andrew Upton was chatting with an assistant. “In 80 years,” Hoffman went on, “no one I’m seeing now will be alive. Hopefully, the art will remain.”
Which is, of course, the perfect reason to make great movies. A single performance on stage is ephemeral, but films can still be watched 80 years after they are created. Hoffman would never say that out loud — it would sound too grand, too self-important, too movie-starish. Still, he knows he will not be remembered for his real-life persona but rather for the characters he has chosen to embody. In “Doubt,” for instance, which was originally a play, he is a Catholic priest who may or may not have been inappropriate with a young male student. He is suspected and accused by the principal of the parish school, a nun named Sister Aloysius, played by Meryl Streep. “If I asked 10 people on the subway who I should cast for the older nun, they’d all say Meryl,” Shanley told me. “But I didn’t know what Phil would do with the part of Father Flynn, and that intrigued me. I did know that he would make Meryl sweat, that she would be up against someone of equal intelligence. Meryl is a street fighter, and she schemes as an actress — she wants to win the scene. Phil won’t play that way. He won’t engage. Before their big confrontation scene, Meryl would be muttering ‘I’m going to kick his butt’ for the entire crew to hear. She’d look at him and say, ‘I know you did it.’ And Phil would just laugh and say, ‘Meryl’s always trying to get in my head.’ ”
As usual Hoffman struggled with the character. “On every film, you’ll have nights where you wake up at 2 in the morning and think, I’m awful in this,” he recalled. “You see how delicate it is — a little movement to the right or the left, and you’re hopelessly hokey.” The film revolves around the question of the priest’s culpability, but that is not what mattered to Hoffman. Hoffman plays the priest as a reformer, a man interested in a more philosophical and tolerant approach to religion. Shanley had given Hoffman a “back story” on Father Flynn, who is based, in part, on a teacher who had a profound impact on Shanley as a boy, but Hoffman added his own interpretation. “I did research by, among other things, going to church. As a kid, I was confirmed and I went to church, but I was bored. Now, I feel the opposite: A good sermon is just like theater. It combines the political scene and the Scriptures, and I thought, Hey, I could do it like that. It’s like a teacher getting up and saying, This is the school I come from.”
Since playing the role, Hoffman has been asked repeatedly if Flynn “did it.” He won’t answer. “I wouldn’t ever say whether the priest is innocent or guilty because I saw ‘Doubt’ as being about something larger,” Hoffman said. “What’s so essential about this movie is our desire to be certain about something and say, This is what I believe is right, wrong, black, white. That’s it. To feel confident that you can wake up and live your day and be proud instead of living in what’s really true, which is the whole mess that the world is. The world is hard, and John is saying that being a human on this earth is a complicated, messy thing.” Hoffman paused again. “And I, personally, am uncomfortable with that messiness, just as I acknowledge its absolute necessity. I find the need to play a part like Father Flynn inescapable, and I only want to do things I’m that passionate about. I know there are actors out there that present themselves as cool cats, but you better take your cool-cat suit off if you want to act. You can’t otherwise.”
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As he said this, Hoffman sounded more melancholy than strident. He looked up at the stage where the actors were reassembling, about to run through the entire first act. “We’re hitting the moments too much,” Hoffman said to no one in particular. What he seemed to mean is that the characterizations had little individuality, that the actors were spending too much time polishing the shiny surface of the play instead of exploring its nuances. “They have to get back to the simple act of doing something,” Hoffman said patiently. “With any character, you have to bring it back to the normal.”
But, as the director, Hoffman could only inspire them — he couldn’t jump onstage and play all the parts himself. Which may have been a relief. “During ‘Doubt,’ Phil seemed to be in a lot of pain,” Shanley remembered. “He’d smoke cigarette after cigarette and stare out the window. I was afraid to say anything to him. And now when we talk about the movie, he says how much fun he had. I’d say, ‘You looked like you were in hell.’ Phil just shrugs and sort of jokes: ‘Hell? That’s where I live.’ ”
“IT WAS PRETTY GOOD LAST NIGHT,” Hoffman said over lunch the next day at a hotel called One Aldwych, which was near the theater. “We were there until 11:30. I had to show tough support to the cast. I can’t do it for them, but I know how it goes: you open the play, and you’ll have a week that’s weird. And then you have a performance that’s really strong, and you’ll try to find that performance again, as if you’ve never done it before. Finally, you find it again, and you’re on and off for a little while, and then you reach a stretch for a couple of weeks where — wow! — you know how to do the play! And then you become stiff again. And so on. But I can’t tell them all that. They have to figure that out on their own. If I’m on them all the time, it’s never going to be theirs.”
Hoffman paused and studied the menu. He was wearing khaki pants and a windbreaker, and he was carrying a worn paperback copy of “Othello.” He will portray Iago in a new production of the play next year, directed by the avant-garde theater and opera director Peter Sellars. Othello will be played by John Ortiz, Hoffman’s friend and a founding member of LAB, which will be affiliated with the production. Often, when you connect the dots with Hoffman, you wind up at LAB.
“I’ve never been all that interested in playing Hamlet,” he said, after ordering corned beef hash and eggs. “Hamlet is a role most actors are supposed to want to play, which is probably why it’s never intrigued me that much. But Iago — I guess his demons interest me more. Iago is a military guy, and I like the idea of him being a general like Wesley Clark, who has accomplished so much in an arena where there’s death and, suddenly, he walks into a nonmilitary world, and he’s no longer the guy he thinks he deserves to be. To my mind, Iago actually loves Othello. And it’s hard not to think of Obama when you read ‘Othello’ now.” Hoffman took a sip of coffee. “It’s fun to think about the possibilities, but as always, I can’t believe I’m doing this. It seems impossible to me.”
When you sit across from him, it is difficult to imagine Hoffman playing anyone as angry and diabolical as Iago. With his pale, lightly freckled skin, blue eyes and solid build, he looks more like an avuncular scholar than a military man (or a priest or . . .). His demeanor and appearance are so fundamentally regular that it seems impossible that he has played such a vast array of anything-but-regular characters. “His physical form actually works to his advantage,” Meryl Streep told me. “Philip is not particularly any one way, which means he can be anybody at all. One of the most important keys to acting is curiosity. I am curious to the point of being nosy, and I think Philip is the same. What that means is you want to devour lives. You’re eager to put on their shoes and wear their clothes and have them become a part of you. All people contain mystery, and when you act, you want to plumb that mystery until everything is known to you.”
Hoffman’s approach may be less vampiric than Streep’s, but he is no less adept at getting beyond the merely physical embodiment of a role. He may put on his character’s shoes, but he also takes them off: in his work, Hoffman is willing to be ugly, pimpled, sexually scarred, miserably unhappy, fleshy and naked. He is never hesitant to reveal the soft underbelly — the insecurities, the (perhaps humiliating) desires, the longing. “I’m much more vain in my life than I am when I’m working,” he said as the food arrived. “I wish I looked different as Phil walking around or Phil waking up. I’m going to be 41, and I’ll go to the bathroom and get a good glimpse of myself in the mirror, and I’m like, What happened? All youth has left me for good. That fear that makes people crazy will strike me at those moments. But when I’m working, I’m grateful for the way I look. I’m grateful for the fact that I have a body with which I can do what I need to do and I can come off as . . . anybody.”
He started out as an athlete. The son of a Xerox employee (“My father did something a little spooky with computers all over the country”) and a lawyer (“My mother is crazy about my career — she goes to the festivals and comes to the play readings”), Hoffman was the second youngest of four kids. He was raised Catholic and played three sports until a neck injury during wrestling practice forced him, under doctor’s orders, to quit contact sports. “I thought, O.K., I’ll play baseball,” Hoffman said. “But I’m 14 with a neck brace. I’d see some girl from 10 blocks away, and I’d take it off until she passed me. I was this freckle-faced kid, and I perceived myself as not attractive. When the doctor asked me if I still had pain, I lied. My pact with God was that I would no longer play sports. So instead of trying out for baseball, I auditioned for a play.” Hoffman smiled. “And also there was this beautiful girl. I had a huge crush on her, and she acted. It seemed like something worth giving up baseball for.”
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In 1984, when he was nearly 17, Hoffman auditioned and was chosen to attend the New York State Summer School of the Arts, a highly selective program in Saratoga Springs. “Phil stood out,” recalled Bennett Miller, who directed Hoffman in “Capote.” “We met then, along with Dan Futterman, who wrote ‘Capote.’ At the time, Phil was very popular: he won everybody over. It wasn’t really because he was a social animal. We were attracted to the fact that he was genuinely serious about what he was doing. Even then, he was passionate. Phil drank a lot of beer, and he could tell a story and light up a room. You wanted to be around him — he was like Truman Capote in that you wanted to sit at his table.”
Miller and Hoffman became great friends. When the summer ended, Hoffman stayed in touch, even flying from Rochester twice to visit Miller at his home in Westchester County. “Phil always had an exceptional interest in the outside world,” Miller said. “He wanted to go to Manhattan, to the Blue Note, to hang out in Times Square. In his high school, at 17, Phil was cast as Willie Loman in ‘Death of a Salesman.’ After the performance, he called me and said, ‘I got a standing ovation.’ One of the biggest regrets I have in life is I didn’t see Phil as Willie Loman.”
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Hoffman auditioned to study theater at Syracuse University, Carnegie Mellon and N.Y.U., where Miller was also applying. They both got into N.Y.U. “Once we made a pact with another friend that if any of us ever won an Academy Award, the first person had to bark their acceptance speech like a dog,” Miller told me. “The deal was that until the producer fades you out, you have to bark instead of speaking. When Phil won for ‘Capote,’ we were hoping for at least one bark but, sadly, no.”
In 1991, when Hoffman was 24, he auditioned five times and was cast in the Al Pacino film “Scent of a Woman” as the prep-school student who betrays his classmate, the lead character. “That’s when I first noticed Phil,” Nichols said. “He summed up all the ways those boarding-school bullies were scary. There is something deeply ethical about Phil as an actor that was apparent even then — he has the integrity and commitment to represent his characters without any judgment.” At the time, Hoffman was living in Brooklyn (“with just a futon”) and working at a deli. “When I catch ‘Scent of a Woman’ on television now,” Hoffman said, “I’ll watch it, and I say, ‘Do less, Phil, less, less!’ Now, I’m a little mortified by parts of my performance. But back then, it was huge! It was pure joy to get to do the work. The director, Marty Brest, told me to never call acting a ‘job.’ Even now, I’ll catch myself calling it a job, and I get angry at myself.”
Paul Thomas Anderson also admired Hoffman’s performance in “Scent of a Woman.” “It was one of those ridiculous moments where you call someone and say, ‘You’re my favorite actor,’ ” Anderson told me recently. Anderson then wrote a part for Hoffman in “Boogie Nights” and, later, in “Magnolia” and cast him in “Punch-Drunk Love.” Those supporting roles — a repressed film-crew member in love with a porn star, a saintly hospice nurse, a menacing proprietor of a phone-sex operation — became part of Hoffman’s collection of precisely drawn, scene-stealing characters. “I remember seeing Philip in ‘The Talented Mr. Ripley,’ ” Streep told me. “He played a rich, spoiled snob, and I sat up straight in my seat and said, ‘Who is that?’ I thought to myself: My God, this actor is fearless. He’s done what we all strive for — he’s given this awful character the respect he deserves, and he’s made him fascinating.”
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Hoffman’s role in “The Talented Mr. Ripley” was Freddie Miles, a close friend of the golden-boy protagonist, whom Hoffman played as a somewhat boorish, future captain of industry living in a constant state of plush pleasure. “He’s existing in a ‘just about to take the beautiful woman’s clothes off’ world,” Hoffman told me. “And he doesn’t like anything interfering with that mood.” Unlike Freddie, however, most of Hoffman’s characters have been profoundly vulnerable, often disenfranchised misfits. In Todd Solondz’s “Happiness,” he played Allen, an insecure man who masturbates while making obscene phone calls. “That wasn’t easy,” Hoffman said now. “It’s hard to sit in your boxers and jerk off in front of people for three hours. I was pretty heavy, and I was afraid that people would laugh at me. Todd said they might laugh, but they won’t laugh at you. He saw what we were working for, which was the pathos of the moment.” Hoffman paused. “Sometimes, acting is a really private thing that you do for the world.”
“AROUND 2004,” BENNETT MILLER SAID, “Phil was where Truman Capote was in his life before he wrote ‘In Cold Blood.’ He was respected by everyone, but he hadn’t fulfilled his true potential on film. And yet Phil regarded playing Capote with absolute dread. Phil told me, I’m too big and physically too different. I said: ‘That’s not what this movie is about. Who cares if Capote was short and you’re not — that’s not the point.’ I knew that Phil, like Capote, had the charm, the ambition and the talent to both be great and self-destructive. I told Phil to lose weight and the rest would be my problem. And then he showed up, and I thought: What did I promise? He’s 5-foot-10 and 230 pounds? What have I done?”
Capote was a dramatic departure for Hoffman. Not only is he in nearly every frame of the movie, but the man was entirely contradictory — he was charismatic but an outsider; always watchful but loved a party; inordinately talented but competitive to a fault. Capote was seductive, manipulative, insecure, dishonest and ruthless. It intrigued Hoffman that Capote was very successful but a bit lost and, like him, wasn’t sure which path to take. Strangely, “Capote” was Hoffman’s “In Cold Blood,” the project that changed everything.
“I knew that it would be great, but I still took the role kicking and screaming,” Hoffman said now, as he ordered sticky pudding for dessert. “Playing Capote took a lot of concentration. I prepared for four and a half months. I read and listened to his voice and watched videos of him on TV. Sometimes being an actor is like being some kind of detective where you’re on the search for a secret that will unlock the character. With Capote, the part required me to be a little unbalanced, and that wasn’t really good for my mental health. It was also a technically difficult part. Because I was holding my body in a way it doesn’t want to be held and because I was speaking in a voice that my vocal cords did not want to do, I had to stay in character all day. Otherwise, I would give my body the chance to bail on me.”
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There was nothing easy about the shoot. Winnipeg, Canada, doubled for Kansas, and it was freezing; money was short and Hoffman’s company, Cooperstown, was a producer of the movie. “That may have been crazy to take on,” Hoffman said, “but as much as I hated spending Sundays — which was my day off — attending production meetings, it took me away from the obsession of acting the part. Putting that obsession somewhere else is rejuvenating.”
By the end, all the relationships were strained. “It was a very happy thing to have something that you suffered over be embraced,” Miller said. “A few weeks before the Oscars, we were at the Berlin film festival, and we were completely fatigued and longing for the finish line. Phil said, ‘I’m going to go in the theater and watch the end of the movie.’ He came out afterward, and his face was wet with tears. ‘Poor bastard,’ he said. Phil, at that moment, was just an audience member. He wasn’t Capote anymore.”
THREE MONTHS AFTER HOFFMAN returned from London, on a freezing Friday night in early December, he was standing in front of the Public Theater in the East Village of Manhattan smoking a cigarette. He was there to see an early staging — “it’s only the third time all these words have been said in a row,” Hoffman told me — of “Philip Roth in Khartoum,” a new play by David Bar Katz that LAByrinth is producing. LAB has a long-standing relationship with the Public Theater, which often makes its auditoriums available to the company. Hoffman, wearing a baseball hat and bundled in a heavy twill jacket that looked as if it was designed with farming in mind, cradled a pair of large headphones around his neck. “I’m playing a character who always listens to headphones,” Hoffman explained. “So tonight I thought, I’ll use them — I’ll be that guy who always has headphones on. And I put on the Cat Stevens song, ‘Trouble.’ You know, ‘Trouble set me free.’ What a great song! I had forgotten. A lot of times, a song will let you down halfway through, but that song is great to the very end.”
The part Hoffman was rehearsing on his way to meet me was a part he hoped never to play: one of the lead roles in a screen adaptation of “Jack Goes Boating,” a play about four pot-smoking friends and their quest for love, which was first staged at LAB in 2007 and which he plans to direct as a film next year. In London, he had been adamant about not wanting to direct himself. But none of the actors he hoped to cast were available, and the shoot had already been scheduled for February.
“I’m in denial about this,” Hoffman said as he finished his cigarette. “Complete denial. I have no idea about what I’m doing. I was in the play, but I don’t remember what I did. That was a year and a half ago, and even then, I was kind of unsure about the character. But if I don’t direct the movie now, I’m not going to do it, and it’s an extension of the theater company. And that’s why I got into this whole acting thing to begin with — to be part of a theater company, to do new plays. Making this movie is about being loyal to that somehow.”
Hoffman’s loyalty to work keeps him very busy: in September, “Riflemind” opened in London to stinging reviews (The Independent called it “mortifyingly bad”; The Sunday Times chided, “nearly three grueling hours of stifling your yawns”), even if Hoffman’s direction was noted with less vitriol. He then returned to New York, where he lives downtown with Mimi O’Donnell and their son, Cooper, and daughter, Tallulah, in time for the birth of their third child — a girl named Willa — in late October. “It’s three kids now and I’m very tired,” Hoffman said. “I’m a little lost in my brain.” He has a movie coming out next spring, “The Boat That Rocked,” in which he plays a D.J., and he lent his voice to “Mary and Max,” which has just been chosen to open the Sundance Film Festival. In November, Hoffman found two weeks to do a workshop of “Othello” with Sellars, before it is performed in Vienna and perhaps New York next fall. He made a trip to Austin, Tex., in search of funds for LAB, and he flew to Los Angeles to promote “Doubt” for a few days. In the last week, after screenings of the film for Academy Award voters, he had three question-and-answer sessions with the cast and director of “Doubt”; he attended the Gotham Independent Film Awards, which were held at Cipriani on Wall Street, where “Synecdoche, New York” shared the prize for “Best Ensemble” with “Vicky Cristina Barcelona”; and he looked at photographs of pools for scenes in his new film, talked to cinematographers and imagined the movie he would soon direct. “It’s a lot,” Hoffman said, as David Bar Katz, the author of “Philip Roth in Khartoum,” bounded over to greet him.
Hoffman has always been attracted to the idea of an artistic community, particularly in the theater, which is part of why he is so attached to LAB. He met Mimi, a costume designer who has recently begun directing, at LAB (“I hired her,” Hoffman joked), and the company members are some of his closest friends. When he began his film career, he worked in a similar way, joining what you might call the Paul Thomas Anderson repertory company, which included John C. Reilly and Julianne Moore, among others. Hoffman appeared in all of Anderson’s movies until last year’s “There Will Be Blood.” The members of that group have gone on to have big careers independently, and the work they do is no longer as collective. “We had a ball then,” he said in London. “It was everyone at the right time. It was very strange not to be in ‘There Will Be Blood.’ Paul kept asking me to come to Texas where they were filming and hang out. I said I’d come, but I wanted to dress in period costume and throw stones at the oil well. I wanted the audience to say, ‘Who’s that guy chucking stones at the well?’ ”
While movies typically require an elaborate and expensive mechanism, plays can be relatively simple to produce. Every year, LAB has a two-week “summer intensive” workshop during which 35 to 40 plays are rehearsed and read. Company members — there are about 100 — offer their critiques and the artistic directors then select the 10 or 15 plays they would like to see go to the next step. “Most of us liked ‘Philip Roth in Khartoum,’ ” Hoffman said. “Some of the women had problems with it, but I asked my mother to come to a reading, and she thought the female characters rang true.” Hoffman lit another cigarette. “People only want to invest in a play that they think will do well. They are not interested in risky theater. But even more traditional theater is pure risk, which is what I love about it. You roll the dice for the thrill of rolling the dice.”
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As we spoke outside the Public, Katz, clearly excited and nervous about that night’s performance, leaped into view again. Hoffman stamped out his cigarette and gave him a bear hug. Katz, who was wearing a complicated gray overcoat that looked a little more Hollywood screenwriter than downtown playwright, has worked extensively with John Leguizamo and has some of his frenetic energy. He clearly saw this production as a big opportunity; Stephen Adly Guirgis’s play, “Jesus Hopped the ‘A’ Train,” directed by Hoffman in 2000, cemented LAB’s reputation as a theater company committed to significant new voices. “I used to think I was Catholic until I met Stephen,” Hoffman joked. “But I am not Catholic the way he is. He is tortured and haunted by that religion, and you see it in his work.”
We headed inside, veering left toward a room that had been outfitted with a hundred seats on four-tier bleachers. The stage was not raised, and there wasn’t much of a set — just some nondescript tables, stools and couches. The room was very wide, and it was hard to tell where the set stopped — often the characters appeared to be offstage when they weren’t: it was meant to evoke a TriBeCa loft that never ends.
“Philip Roth in Khartoum,” like most LAB plays, is designed to be something of a commentary on our times. “It’s about a dinner party that goes bad,” Hoffman said quietly as we took our seats in the top row. The play began with four men discussing their wives’ lack of carnal interest in them. The dialogue was funny and a little sad, but the characters were indistinct — somewhat stereotypical aging yuppies who longed for the days of easy sex. When the action moved to their spouses, the play became more engaging. But as the conflicts emerged — a severely autistic child, a wife with a more successful career than her husband’s, an interracial marriage — the play, which was two and a half hours long, began to verge on soap opera.
Hoffman seemed to love it. His attention was entirely focused, a perfect audience of one. At moments like this, it is easy to forget that Hoffman is a major movie star with an Oscar on his mantel. He appears not to have a trace of ego. “That’s why I wrote the character of the saintly nurse Phil Parma in ‘Magnolia’ for Phil,” said Paul Thomas Anderson. “Phil is that good — he’s committed to art and not in a phony, grandstanding way. He really wants to live a life in the arts that means something.” There are few other Academy Award-winning actors who have devoted themselves to the full-time running of a theater company. “It sounds noble, but it’s really not,” Hoffman said. “I do this because it gives me a home, a place where I can come and work. The movies are great, but they require a different kind of concentration, and then they’re over. Theater was my first love, and it’s been the biggest influence on my life. The theater is why I got into acting and why I’m still in acting.”
When the audience cleared out, Hoffman went backstage to talk to the actors about the performance. It felt strangely like a moment from a simpler time and place: Hoffman and his buddies putting on a show. Later that night, Hoffman would walk home in the cold listening to “Trouble” over and over on his headphones, imagining his soon-to-be-played character projected onto the big screen, but right now he was like an enthralled kid. “I’m happy here,” he said, sounding surprised at his glee. “You never forget your first love.”
“SOMETIMES WHEN I SEEa great movie or a great play I think, Being human means you’re really alone,” Hoffman told me on another cold winter night. We had just seen “Gran Torino,” the new Clint Eastwood film in which he directs himself. Eastwood plays a racist, cantankerous curmudgeon named Walt Kowalski who befriends the Hmong boy who lives next door. Kowalski is a symbol of a dying America — blue collar, militaristic, practical, afraid, proud. There’s a stylistic link between “Doubt” and “Gran Torino” — both films are rich in character and take place in a time of change. “Doubt” is set in 1964, before the upheaval of the late ’60s, and there is only one black student at the parish school in the Bronx. Similarly, “Gran Torino” depicts the last breaths of a certain kind of man: Kowalski is a former autoworker who lives his life according to strict beliefs and rules. Both films begin and end in the Catholic Church; both suggest an uncertain future. “And they are both filled with regret,” Hoffman said. We were having some pasta at an Italian restaurant near the movie theater where we had seen “Gran Torino.” “So many things I’m interested in come down to the subject of regret,” he continued as he ate his spaghetti. “That’s Capote alone on the plane at the end of ‘Capote,’ the priest and the nun in “Doubt” who make judgments they may wish they hadn’t and Clint Eastwood tonight. I try to live my life in such a way that I don’t have profound regrets. That’s probably why I work so much. I don’t want to feel I missed something important.”
Hoffman fell silent. “Gran Torino” is emotional, and he was clearly affected by the film. “I still get wide-eyed,” he said. “It’s true that I’ve made a lot of movies, and I know there’s a microphone over there and a camera back there, but when you see something great, you lose all that. I’m sitting forward, and I’m being moved, and I have no idea how he did it. I don’t know Clint Eastwood, but what’s amazing is that you have the sense that he’s doing exactly what he wants to be doing. He’s so committed. In this film, he keeps the action going, and the people don’t ever behave against their true nature. That’s what I look for in my work: when a writer can deftly describe the human experience in a way that you didn’t think could even be put into words. That doesn’t happen often, but it gives me something to play inside. Too much of the time our culture fears subtlety. They really want to make sure you get it. And when subtlety is lost, I get upset.”
When Hoffman talks about his need for emotional nuance, it’s easy to understand why he gravitates to the theater, where the great roles combine magnificent writing with intense feeling. “I’m sure Phil will do the great plays of O’Neill and Miller,” Nichols told me, “because he’s like a lion — he needs meat to feed on. And, God willing, he’ll do great movies. But those parts are harder to find in film. Movies, for me, need to be reborn. They can’t rely on the classics the way theater can.”
Hopefully, Hoffman will not give up his film career. “I heard that Eastwood is saying that this will be his last film as an actor,” Hoffman said. “There’s part of me that feels that way during almost every movie. On ‘Synecdoche,’ I paid a price. I went to the office and punched my card in, and I thought about a lot of things, and some of them involved losing myself. You try to be artful for the film, but it’s hard. I’d finish a scene, walk right off the set, go in the bathroom, close the door and just take some breaths to regain my composure. In the end, I’m grateful to feel something so deeply, and I’m also grateful that it’s over.” He smiled. “And that’s my life.” ||||| Add a location to your Tweets
When you tweet with a location, Twitter stores that location. You can switch location on/off before each Tweet and always have the option to delete your location history. Learn more | A wave of grief is pouring into traditional and social media today over the shocking death of Philip Seymour Hoffman, the New York Times reports. First, from his family: "We are devastated by the loss of our beloved Phil and appreciate the outpouring of love and support we have received from everyone," they said in a statement. "This is a tragic and sudden loss ... Please keep Phil in your thoughts and prayers." Among other reactions to the 46-year-old actor's death: "OH NO!!!!!" tweeted Mia Farrow. "Philip Seymour Hoffman has died. A truly kind, wonderful man and one of our greatest actors—ever." "RIP Philip Seymour Hoffman," tweeted Ricky Gervais. "One of the greatest actors of a generation and a sweet, funny & humble man." "Philip Seymour Hoffman. Unbearably, shockingly, deeply sad," tweeted Anna Kendrick. "Words fail to describe his life and our loss." "He’s a local. He’s a fixture in this neighborhood," said one of the 100 or so people gathered outside Hoffman's building in New York City. "You see him with his kids in the coffee shops. He is so sweet. It’s desperately sad." And a quote from Hoffman himself: "I try to live my life in such a way that I don’t have profound regrets," he told the Times a few years ago. "That’s probably why I work so much. I don’t want to feel I missed something important." |
Libyan leader Moammar Gaddafi’s four-decade-long rule over the country was crumbling at breakneck speed as hundreds of rebel fighters swept into Tripoli and took control Monday of the symbolically significant Green Square in the heart of the city.
With rebel leaders saying late Sunday that Gaddafi’s compound was surrounded, that his son Saif al-Islam had been captured and that his presidential guard had surrendered, the six-month-old battle for control of Libya appeared to be hurtling toward a dramatic finale.
In a written statement, President Obama said: “Tonight, the momentum against the Qadhafi regime has reached a tipping point. Tripoli is slipping from the grasp of a tyrant.”
Early Monday there were reports of heavy clashes near Gaddafi’s compound. Rebel spokesman Mohammed Abdel-Rahman said that tanks had emerged from the complex and began firing, AP said.
Only a few residents in Tripoli ventured out to greet the rebels, and there was an overall sense of nervousness on Green Square. Posters of Gaddafi had been ripped to pieces, and young men were shooting off guns and fireworks.
In a brief broadcast on state television, Gaddafi made what came across as a desperate plea for support. “Go out and take your weapons,” the Libyan leader said. “All of you, there should be no fear.”
The rebel advance had unfolded with surprising speed throughout the day as fighters converged on the capital from three directions. In areas under rebel control, opposition flags fluttered, while jubilant residents honked horns, set off fireworks and stomped on posters of Gaddafi.
With communications to the capital sporadic, some rebel claims could not be confirmed, and some experts cautioned that a tough urban battle may yet lie ahead between the lightly armed and untrained rebels and the elite government forces kept in reserve for the defense of the capital.
But reporters traveling with rebel forces said Gaddafi’s defenses were melting away faster than had been expected. There were reports of entire units fleeing as rebels entered the capital from the south, east and west, and his supporters inside the city tearing off their uniforms, throwing down their weapons and attempting to blend into the population.
A Tripoli-based activist said the rebels had secured the seaport, where several hundred reinforcements for the opposition had arrived by boat, and were in the process of evicting Gaddafi loyalists from the Mitiga air base on the eastern edge of the city.
“The Gaddafi regime is clearly crumbling,” said a statement issued by NATO, whose five-month-old aerial bombing campaign, ostensibly launched to protect civilians from attacks by the government, contributed enormously to the erosion of Gaddafi’s defenses.
NATO said Monday it will continue its combat patrols over Libya until Gaddafi loyalists surrender or return to barracks.
A U.S. official closely tracking intelligence reports from Tripoli said there was no independent confirmation of reports that Gaddafi’s sons had been captured but added that events were moving so rapidly that confirmation was difficult. The official said rebel forces appeared to be benefiting not only from strong momentum but also from smart strategic planning going into the capital.
“We could be watching the game-changer unfold,” said the official, who spoke on the condition of anonymity to discuss intelligence reports. “Whether or not Gaddafi reads the tea leaves the same way is the big question.”
In the rebel capital, Benghazi, where huge crowds gathered to celebrate what they hoped was the imminent capture of Tripoli, Transitional National Council leader Mustafa Abdel Jalil announced that Gaddafi’s son Saif al-Islam had been captured.
Rebels in Tripoli also said that Gaddafi’s eldest son, Mohammed, had surrendered after fighters stormed his home.
There was no information about Gaddafi’s whereabouts, though he had issued a defiant speech earlier in the day in which he insisted that he was in Tripoli and would not surrender. “We cannot go back until the last drop of our blood. We will defend the city. I am here with you,” he said in the audio statement, purportedly broadcast live. “Go on, go forward!”
But it appeared that his control had already unraveled as the rebels swept into the capital, encountering only pockets of resistance along the way.
The rebels urged journalists not to remain on the square for too long, illustrating the general sense of uneasiness about their victory. There were rumors that Gaddafi’s forces would try to retake the square, but that did not happen.
“This is the happiest day of my life,” said Abdul Hamid, who had driven in from outside Tripoli to be on Green Square.
People on the square said that rebels had seized the symbolic location around 10 p.m. and that they faced little resistance.
Checkpoints and neighborhood watches had been set up all over the western part of the city, but on the road from the rebel-held city of Dawiya, hundreds of cars and trucks could be seen bringing reinforcements to secure the capital.
“I never thought I’d see a day like this, it’s like our independence day. This is the end of the colonel,” said Adel Bibas, as he stood on a street in the western portion of Tripoli. Elsewhere, there were rumors that Gaddafi’s forces were on the way, and young men urged people to seek refuge inside, a sign of the tension that still weighs on the capital.
After initially seizing control of the strategic western town of Zawiyah last week, the rebels pushed rapidly east throughout the day, capturing a major military base that was home to the Khamis Brigade, an elite force led by Khamis Gaddafi, one of the Libyan leader’s sons.
Exultant rebels seized weapons from the base and were seen carrying away boxes of brand-new Belgian munitions, as others raced by in trucks filled to the brim with weaponry.
By nightfall, the rebel force
had reached suburban Janzour, where witnesses said government forces had abandoned their posts earlier in the day. Residents took to the streets to cheer the rebels as they swept past in their pickups into the southern edges of the city.
At the same time, rebels advancing along the eastern coastal highway were reported to have linked up with opposition fighters in the strategically located eastern suburb of Tajura, long a stronghold of opposition to Gaddafi, effectively cutting off the capital.
In a late-night briefing for journalists confined to the Rixos hotel, government spokesman Moussa Ibrahim said that at least 1,300 people had been killed since noon, in addition to 930 the previous day, and blamed NATO for the bloodshed. The figures could not be independently confirmed, and though rebels said there had been many deaths, they were skeptical that the number was that high.
The lightly armed opponents, who have spent months quietly organizing for this moment, were within a mile and a half of Gaddafi’s Bab al-Aziziya compound by Sunday night. They were hoping to launch an assault on the headquarters as soon as they linked up with the rebel reinforcements arriving in the city, according to Tripoli resident and rebel organizer Abdel Azzuz.
He said that the rebels are convinced that Gaddafi is still in Tripoli and that they are in the process of setting up checkpoints across the city in case he tries to slip away.
A rebel leader who asked to be identified only as Haj said the Libyan independence flag, which has been adopted as the symbol of the opposition, was flying from numerous mosques, government buildings and a shopping mall in areas they had seized. He said fighters could be heard singing the rebel national anthem, the words “Oh, my country” floating through the streets amid the near-constant crackle of automatic-weapons fire.
Haj said he was confident that the opposition fighters could hold out at least another day until the rebel army arrives. “With the efforts of our revolutionary youths and our children, we will be able to make it through tonight,” he said.
He seemed unsure whether they would last longer than that, however, and it was unclear what level of control the anti-Gaddafi forces exert in the neighborhoods they claim to have seized. The rebels said they have a good supply of Kalashnikovs, smuggled into the city covertly since the initial uprising was crushed in March, as well as 9mm pistols and homemade bombs. In Tajura, the opposition forces had seized a sizable quantity of weapons from a government unit that fled, according to Azzuz, the rebel organizer.
In Washington, a second U.S. official said: “The opposition is gaining ground and putting more pressure on the regime each day. When this translates into a tipping point and what the endgame will look like is hard to determine. Gaddafi isn’t sure what he’s going to do from one moment to the next.”
State Department spokeswoman Victoria Nuland said officials there are turning their attention to a post-Gaddafi Libya. “Gaddafi’s days are clearly numbered,” she said. “If Gaddafi cared about the Libyan people, he would step down now.”
Sly reported from Beirut. Staff writers Joby Warrick in Washington and Leila Fadel in Mersa Matruh, Egypt, contributed to this report. ||||| Euphoric Libyan rebels moved into the capital Tripoli on Sunday and moved close to center with little resistance as Moammar Gadhafi's defenders melted away. The opposition's leaders said Gadhafi's son and one-time heir apparent, Seif al-Islam, has been arrested.
In this image made from television, people celebrate in the streets of Tripoli, Libya, Sunday, Aug. 21, 2011. Libyan rebels have entered the capital Tripoli and are within two miles of the city center.... (Associated Press)
People celebrate the recent news of uprising in Tripoli against Moammar Gadhafi's regime at the rebel-held town of Benghazi, Libya, early Sunday, Aug. 21, 2011. Libyan rebels said they launched their... (Associated Press)
RETRANSMISSION FOR IMPROVED QUALITY Rebel fighters speed towards the frontllne fighting in the village of Mayah, some 30 kilometers west from Tripoli, LIbya, Sunday, Aug. 21, 2011. (AP Photo/Sergey Ponomarev) (Associated Press)
In this image made from television, people celebrate in the streets of Tripoli, Libya, Sunday, Aug. 21, 2011. Libyan rebels have entered the capital Tripoli and are within two miles of the city center.... (Associated Press)
Rebel fighters look towards the enemy as they hear the sound of bombardments in the village of Mayah, some 30 kilometers west from Tripoli, LIbya, Sunday, Aug. 21, 2011. Libyan rebels said they were... (Associated Press)
People celebrate the recent news of uprising in Tripoli against Moammar Gadhafi's regime at the rebel-held town of Benghazi, Libya, early Sunday, Aug. 21, 2011. Libyan rebels said they launched their... (Associated Press)
Volunteers carry a wounded rebel fighter in the Abu-Rafat hospital on the outskirts of Zawiya, LIbya, Sunday, Aug. 21, 2011. Libyan rebels said they were less than 20 miles (30 kilometers) from Moammar... (Associated Press)
In this image made from television, people celebrate in the streets of Tripoli, Libya, Sunday, Aug. 21, 2011. Libyan rebels have entered the capital Tripoli and are within two miles of the city center.... (Associated Press)
Associated Press reporters with the rebels said they met little resistance as they moved from the western outskirts into the capital in a dramatic turning of the tides in the 6-month-old Libyan civil war.
"They will enter Green Square tonight, God willing," said Mohammed al-Zawi, a 30-year-old rebel in the force that was moving in. Green Square has been the site of night rallies by Gadhafi supporters throughout the uprising.
Gadhafi's regime appeared to be rapidly crumbling.
Earlier in the day, the rebels overran a major military base defending the capital, carted away truckloads of weapons and raced to Tripoli with virtually no resistance.
The rebels' surprising and speedy leap forward, after six months of largely deadlocked civil war, was packed into just a few dramatic hours. By nightfall, they had advanced more than 20 miles to Gadhafi's stronghold.
Along the way, they freed several hundred prisoners from a regime lockup. The fighters and the prisoners _ many looking weak and dazed and showing scars and bruises from beatings _ embraced and wept with joy.
Thousands of jubilant civilians rushed out of their homes to cheer the long convoys of pickup trucks packed with rebel fighters shooting in the air. Some were hoarse, shouting: "We are coming for you, frizz-head," a mocking nickname for Gadhafi. In villages along the way that fell to the rebels one after another, mosque loudspeakers blared "Allahu Akbar," or "God is great."
"We are going to sacrifice our lives for freedom," said Nabil al-Ghowail, a 30-year-old dentist holding a rifle in the streets of Janzour, a suburb just six miles west of Tripoli. Heavy gunfire erupted nearby.
As town after town fell and Gadhafi forces melted away, the mood turned euphoric. Some shouted: "We are getting to Tripoli tonight." Others were shooting in the air, honking horns and yelling "Allahu Akbar."
Once they reached Tripoli, the rebels took control of one neighborhood, Ghot Shaal, on the western edge of the city. They set up checkpoints as rebel trucks rolled into Tripoli. A convoy of more than 10 trucks entered Ghot Shaal.
The rebels moved on to the neighborhood of Girgash, about a mile and a half from Green Square. They said they came under fire from a sniper on a rooftop in the neighborhood.
Sidiq al-Kibir, the rebel leadership council's representative for the capital Tripoli, confirmed the arrest of Seif al-Islam to the AP but did not give any further details.
Inside Tripoli, widespread clashes erupted for a second day between rebel "sleeper cells" and Gadhafi loyalists. Rebels fighter who spoke to relatives in Tripoli by phone said hundreds rushed into the streets in anti-regime protests in several neighborhoods.
Libyan state television aired an angry audio message from Gadhafi Sunday night, urging families in Tripoli to arm themselves and fight for the capital.
"The time is now to fight for your politics, your oil, your land," he said. "I am with you in Tripoli _ together until the ends of the earth," Gadhafi shouted.
The day's first breakthrough came when hundreds of rebels fought their way into a major symbol of the Gadhafi regime _ the base of the elite 32nd Brigade commanded by Gadhafi's son, Khamis. Fighters said they met with little resistance.
Hundreds of rebels cheered wildly and danced as they took over the compound filled with eucalyptus trees, raising their tricolor from the front gate and tearing down a large billboard of Gadhafi.
Inside, they cracked open wooden crates labeled "Libyan Armed Forces" and loaded their trucks with huge quantities of munitions. One of the rebels carried off a tube of grenades, while another carted off two mortars.
"This is the wealth of the Libyan people that he was using against us," said Ahmed al-Ajdal, 27, pointing to his haul. "Now we will use it against him and any other dictator who goes against the Libyan people."
One group started up a tank, drove it out of the gate, crushing the median of the main highway and driving off toward Tripoli. Rebels celebrated the capture with deafening amounts of celebratory gunfire, filling the air with smoke.
Across the street, rebels raided a huge warehouse, making off with hundreds of crates of rockets, artillery shells and large-caliber ammunition. The warehouse had once been using to storage packaged foods, and in the back, cans of beans were still stacked toward the ceiling.
The prisoners had been held in the walled compound and when the rebels rushed in, they freed more than 300 of them.
"We were sitting in our cells when all of a sudden we heard lots of gunfire and people yelling 'Allahu Akbar.' We didn't know what was happening, and then we saw rebels running in and saying 'We're on your side.' And they let us out," said 23-year-old Majid al-Hodeiri from Zawiya. He said he was captured four months ago by Gadhafi's forces and taken to base. He said he was beaten and tortured while under detention.
Many of the prisoners looked disoriented as they stopped at a gathering place for fighters several miles away from the base. Some had signs of severe beatings. Others were dressed in tattered T-shirts or barefoot. Rebels fighters and prisoners embraced.
From the military base, about 16 miles west of Tripoli, the convoy pushed on toward the capital.
Mahmoud al-Ghwei, 20 and unarmed, said he had just came along with a friend for the ride .
"It's a great feeling. For all these years, we wanted freedom and Gadhafi kept it from us. Now we're going to get rid of Gadhafi and get our freedom," he said.
At nightfall, the fighters reached Janzour, a Tripoli suburb. Along the way, they were greeted by civilians lining the streets and waving rebel flags. One man grabbed a rebel flag that had been draped over the hood of a slow-moving car and kissed it, overcome with emotion.
"We are not going back," said Issam Wallani, another rebel. "God willing, this evening we will enter Tripoli."
The uprising against Gadhafi broke out in mid-February, and anti-regime protests quickly spread across the vast desert nation with only 6 million people. A brutal regime crackdown quickly transformed the protests into an armed rebellion. Rebels seized Libya's east, setting up an internationally recognized transitional government there, and two pockets in the west, the port city of Misrata and the Nafusa mountain range.
Gadhafi clung to the remaining territory, and his forces failed to subdue the rebellion in Misrata, Libya's third-largest city, and in the Nafusa mountains. Since the start of August, thousands of rebel fighters, including many who fled Gadhafi-held cities, joined an offensive launched from the mountains toward the coast.
The fighters who had set out from the mountains three weeks ago rushed toward Tripoli on Sunday, start out at dawn from a village just east of the coastal city of Zawiya. Only a day earlier had the rebels claimed full control of Zawiya, an anti-regime stronghold with 200,000 people and Libya's last functioning oil refinery.
Rebels said Saturday that they had launched their first attack on Tripoli in coordination with NATO and gunbattles and mortar rounds rocked the city. NATO aircraft also made heavier than usual bombing runs after nightfall, with loud explosions booming across the city.
On Sunday, more heavy machine gun fire and explosions rang out across the capital with more clashes and protests.
Government minders in a hotel where foreign journalists have been staying in Tripoli armed themselves on Sunday in anticipation of a rebel take over. The hotel manager said he had received calls from angry rebels threatening to charge the hotel to capture the government's spokesman, Moussa Ibrahim.
Heavy gun fire was heard in the neighborhood around the Rixos hotel, and smoke was seen rising from a close by building.
"We are scared and staying in our houses, but the younger boys are going out to protect our homes," said a woman who spoke to The Associated Press by telephone from the pro-rebel Tripoli neighborhood of Bin Ashour. She spoke on condition of anonymity for fear of reprisal. She said a neighbor's son was shot dead on Saturday night by Gadhafi troops as he tried to protect his street with a group of rebel youth.
Nuri al-Zawi, another resident of Bin Ashour, told the AP by phone that the rebels were using light arms to protect their streets, and in some cases were using only their bodies to fend off the Gadhafi troops riding in pickup trucks.
"We are used to this situation now. We are a city that is cut off from the world now," he said.
The residents reported clashes in neighborhoods all over Tripoli as well as the city's Mitiga military airport. They said they heard loud explosions and exchanges in of gunfire in the Fashloum, Tajoura and Bin Ashour neighborhoods. Residents and opposition fighters also reported large anti-regime protests in those same neighborhoods. In some of them, thousands braved the bullets of snipers perched atop high buildings.
Mukhtar Lahab, a rebel commander closing in on Tripoli and a former captain in Gadhafi's army, said his relatives inside the capital reported mass protests in four neighborhoods known as sympathetic to the opposition: Fashloum, Souk al-Jouma, Tajoura and Janzour. He said mosques there were rallying residents with chants of "Allahu Akbar" or "God is great," broadcast on loudspeakers.
___
Laub and Hubbard reported from Janzour, Libya. Hadeel Al-Shalchi in Cairo and Slobodan Lekic in Brussels contributed to this report. ||||| Tweet with a location
You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more ||||| Libya's leader Muammar Gaddafi waves from a car in the compound of Bab Al Azizia in Tripoli, after a meeting with a delegation of five African leaders seeking to mediate in Libya's conflict, in this April 10, 2011 file photo.
AMSTERDAM The International Criminal Court prosecutor said on Sunday Saif al-Islam, the son of Libya's Muammar Gaddafi, had been detained in Libya.
"Saif was captured in Libya," prosecutor Luis Moreno-Ocampo told Reuters. "We have confidential information from different sources that we have within Libya confirming this.
"It is very important to make clear there is an obligation to surrender Saif to the ICC in accordance with the Security Council resolution."
Libyan rebels said earlier that they had detained Saif and Gaddafi's eldest son Mohammed Al-Gaddafi.
In June the ICC issued arrest warrants for Gaddafi, his son Saif and Libyan intelligence chief Abdullah al-Senussi on charges of crimes against humanity after the U.N. Security Council referred the Libyan situation to the court in February.
Moreno-Ocampo said the rebel transitional national council in Libya had not yet been in touch with the ICC about the capture of Saif, but the prosecutor said he would be in contact with them on Monday to discuss the next steps.
(Reporting by Aaron Gray-Block; editing by Andrew Roche) ||||| TUNIS |
TUNIS (Reuters) - Libyan leader Muammar Gaddafi said Sunday he will stay in Tripoli "until the end" and called on his supporters around the country to help liberate the capital from a rebel offensive.
He said in an audio message played over state television he was "afraid that Tripoli will burn" and he said he would provide weapons to supporters to fight off the rebels.
(Writing by Richard Valdmanis) ||||| Violence in Libya continued Sunday as rebel forces continued advancing through the city of Tripoli. Most of the city has been captured by the rebels now. They control nearly all of the city. Muammar Qaddafi's sons are in custody with the National Transitional Council, and are likely to be charged by the International Criminal Court. Qaddafi himself is currently missing, with rumors flying that he has either left the city of Tripoli, or the country itself. Rebel fighters and citizens of Tripoli gathered in Green Square to celebrate the apparent fall of Muammar Qaddafi, and took the time to rename it Martyr Square, as it was before Qaddafi came to power. President Obama weighed in Sunday evening, saying, "the momentum against the Qadhafi regime has reached a tipping point." Our live blog of the events from Sunday can be read below.
Original post: It's down to "zero hour" in Libya, according to the Libyan Rebel Council, as rebel forces approach Qaddafi in Tripoli. Yesterday there were rumors that Qaddafi had already fled the city with his two sons, and the White House itself indicated today that Qaddafi's "days are numbered." Nonetheless, Qaddafi has maintained that his forces would defend the city with "their last drop of blood." We will update with developments from Tripoli as they come in.
12:20 a.m.: We are signing off. Come back tomorrow morning for more coverage.
11:47 p.m.: Outlook in Tripoli is beginning to get better
BBC News' Matthew Price reports from the Rixos Hotel in Tripoli, where most foreign journalists are staying during the conflict:
"The overall picture in Tripoli is patchy. There are certainly large areas, where the opposition is in control. But some areas are still under government control. However, one of the most vivid signs of the collapse of the Gaddafi regime is that government employees have been slowly leaving our hotel - the place from where Libya's state TV has been broadcasting."
He also filed a story for BBC News describing his experiences in the hotel with other journalists and government officials since the fighting began:
We gathered - the international media together - to work out what we might do. Body armour on, escape routes chosen. No route to the port, no boats there to take us out anyway. Then the hotel chef came up and asked us if we would like dinner. We dined in flak jackets - helmets by our side. And as the Iftar meal, the breaking of the fast ended, so too did the relative silence. Heavy weapons opened up again, explosions outside the hotel.
11:04 p.m.: More gunfire in Green Square
CNN's Sara Sidner has told Wolf Blitzer there's been more gunfire in Green Square. She said it seemed like it was coming from snipers on nearby roofs, but it was unclear. [Clarification: The footage that aired was from an earlier time in the evening. Sidner went into the square with rebels when a sniper fired from a nearby rooftop. The CNN crew was forced behind the pillars in the square. She was unharmed. Sidner did tweet this shortly after 11p.m.: "Green square nearly empty. We were warned to get out. Rebels say Gadhafi troops advancing toward square."]
10:52 p.m.: Head of National Transitional Council says Mohammed Qaddafi has not been hurt
As a follow up, Al Jazeera spoke to the NTC, who said Qaddafi's sons are now in custody, and Mohammed Qaddafi is fine. Al Jazeera Arabic was interviewing him earlier Sunday when the interview was cut short after gunshots were heard on the other end of the phone line before the line went dead. The head of the NTC told Al-Jazeera he was not hurt. Video of the interview can be seen here:
Rebels told Al-Jazeera they had control of the whole city now, except for Qaddafi's Bab Al-Azizyah stronghold.
10:38 p.m.: Obama says the conflict against Qaddafi's has come to "a tipping point"
Via The Weekly Standard, President Obama issued a statement Sunday evening on the situation in Libya:
Tonight, the momentum against the Qadhafi regime has reached a tipping point. Tripoli is slipping from the grasp of a tyrant. The Qadhafi regime is showing signs of collapsing. The people of Libya are showing that the universal pursuit of dignity and freedom is far stronger than the iron fist of a dictator. The surest way for the bloodshed to end is simple: Moammar Qadhafi and his regime need to recognize that their rule has come to an end. Qadhafi needs to acknowledge the reality that he no longer controls Libya. He needs to relinquish power once and for all. Meanwhile, the United States has recognized the Transitional National Council as the legitimate governing authority in Libya. At this pivotal and historic time, the TNC should continue to demonstrate the leadership that is necessary to steer the country through a transition by respecting the rights of the people of Libya, avoiding civilian casualties, protecting the institutions of the Libyan state, and pursuing a transition to democracy that is just and inclusive for all of the people of Libya. A season of conflict must lead to one of peace. The future of Libya is now in the hands of the Libyan people. Going forward, the United States will continue to stay in close coordination with the TNC. We will continue to insist that the basic rights of the Libyan people are respected. And we will continue to work with our allies and partners in the international community to protect the people of Libya, and to support a peaceful transition to democracy.
10:28 p.m.: Rumors of another clash; South African ambassador speaks; NATO involvement increased
CNN's Sara Sidner tells Wolf Blitzer that rebels in Tripoli are on the move and getting prepared for a battle in the city. She was in Green Square but crowds have been cleared out in preparation. She said the feeling has become slightly more tense, and there are rumors that Qaddafi forces are "on the way."
South Africa's ambassador to Libya, Mohammed Dangor, told Al-Jazeera he had no knowledge of any South African planes in Libya. He said he already left Libya on Saturday with most of the other South African representatives in the country. Some remain behind for now, though.
"I have no knowledge of any South African planes in Tripoli ... but Nato should know, since they control the airport and no plane can land without their permission," he said.
The New York Times is reporting NATO and the United States played a larger role in preparing the rebels to invade Tripoli over the last few weeks:
The officials also said that coordination between NATO and the rebels, and among the loosely organized rebel groups themselves, had become more sophisticated and lethal in recent weeks, even though NATO’s mandate has been merely to protect civilians, not to take sides in the conflict. NATO’s targeting grew increasingly precise, one senior NATO diplomat said, as the United States established around-the-clock surveillance over the dwindling areas that Libyan military forces still controlled, using armed Predator drones to detect, track and occasionally fire at those forces.
9:24 p.m.: Chavez speaks out; Mohammmed under house arrest, interviewed, and shot at
Venezuelan president Hugo Chavez has spoken out against NATO's involvement in the conflict in Libya. Appearing on state television in Venezuela, he criticized the United States and European countries for "destroying Tripoli with their bombs."
"Today we are seeing images of the democratic governments of Europe, along with the supposedly democratic government of the United States destroying Tripoli with their bombs," Chavez said. "Today they dropped I don't know how many bombs."
He asked Velezuelans to, "Pray to God for the Libyan people." Per the Associated Press , Chavez said the attacks were oil-motivated and caused damage to schools and hospitals.
Al-Jazeera Arabic spoke with Mohammed Qaddaffi on air, who is now under house arrest in Libya. Mohammed, "took a very apologetic tone and said it was a lack of wisdom that caused the revolution and crisis in Libya." The interview was interrupted by sounds of gunfire and explosions, and eventually cut short with no indication of his safety.
Al-Jazeera English's Zeina Khodr is in the former Green Square and reported this video of the celebrations there:
8:10 p.m.: Libyans celebrate in a renamed Green Square
Ujala has been relieved, and Connor will take over this live blog. First, a quick rundown of things that have happened since our last update:
Libyans have gathered in Tripoli's Green Square to celebrate the fall of Tripoli to Libyan rebels, CNN reports. On television, CNN is reporting that the celebrating Tripoli citizens have renamed it "Martyr's Square," the original name of that part of the town. Qaddafi had changed the name to Green Square. This image, from Getty, shows the size of the crowd there:
Additionally, Qaddafi's sons will be sought by the International Criminal Court for war crimes:
International Criminal Court chief prosecutor Luis Moreno-Ocampo also said Saif Gadhafi had been arrested and would be sought by court "for his participation in crimes against humanity (affecting) the Libyan people." The court, based in The Hague, earlier this summer issued an arrest warrant for Saif Gadhafi as well as his father and uncle Abdullah al-Sanussi. Moreno-Ocampo said the court plans Monday to contact authorities associated with those holding Saif al-Islam to try to arrange for his transfer to the Netherlands for an eventual trial.
Reuters reports President Obama isn't making a statement until he has full confirmation on what's happening. He's currently on vacation in Martha's Vineyard.
6:30 p.m.: Tripoli Surrenders
Libyan military forces in Tripoli have now officially surrendered to the rebel forces, according to Al-Jazeera TV.
6:15 p.m.: Qaddafi Speaks Again, Unlikely from Libya
This is very dangerous...Why would you allow this to happen? How can you let Tripoli, which was beautiful and safe, how can you allow this? This must not happen... Otherwise you will remain servants of the imperialists... and the British imperialism will return once again... All the men and women must come out, in order to prevent the traitors and agents from Tripoli... Now all of the tribes are marching... from the western mountains, because they have heeded the call... there is no place for the agents of imperialism... not in front of these huge masses which are marching to Tripoli right now... Those who understand Islam, they must take all the women -- the women we trained to use weapons -- they must also march...
The full speech was longer and more rambling. According to Al-Jazeera, no one knows where Qaddafi is, though some have suggested he has been granted political asylum in Algeria by its President Abdelaziz Bouteflika and is there now. But Al-Jazeera TV says it can confirm that he is "definitely, definitely not in Tripoli," he left "maybe even weeks ago."
Meanwhile: CNN confirms another Qaddafi son has been captured: Saadi Ghaddafi.
6:05 p.m.: NATO Secretary's General has issued a statement:
NATO is ready to work with the Libyan people and with the Transitional National Council, which holds a great responsibility. They must make sure that the transition is smooth and inclusive, that the country stays united, and that the future is founded on reconciliation and respect for human rights.
5:45: Qaddafi Speaks: Vows to Stay Until the End
From an audio recording, Qaddafi spoke: he gave a rallying call to the tribes to come into Tripoli.
"The West will not protect you. How can you allow for Tripoli to be burned? ...Beautiful Tripoli they will turn it tomorrow into a destroyed city... you must lead now and march... Those who understand Islam properly must go out and lead the people, go out, take your weapons, there should be no fear. Those who work for the imperialists there are but a few."
Additionally, another report on his sons: from Al Arabiya: Mohammed, the eldest son of Muammar Gaddafi gave himself up & Saif Al Islam was captured." And Al-Jazeera TV reports that people are celebrating in Tripoli, though there is still resilience in some areas from Qaddafi forces. From their video feed, there are scenes of people stamping on rugs with Qaddafi's image.
5:15 p.m.: Moussa Ibrahim speaks, saying that in 11 hours 1,300 people killed, 5,000 people injured. He blames NATO, asking for negotiations.
"These armed gangs would not be able to move...you cannot condition peace, you need to sit down and talk...Why has the right to say you cannot discuss this?.. All NATO cares about is how to destroy this political system so that it can fulfill its deires, not the desires of the Libyan people, but the desires of NATO... We are very resilient, and still very strong... the death toll will increase and increase, each side is terrified of the other side, so let's stop... We need our leader Qaddafi, without him both sides would collapse and make it easy prey for the other side."
He also said reinforcements were coming, and "people would not give up... Qaddafi should lead us for our peace, democracy, and negotiations."
5:00 p.m.: Qaddafi's sons reportedly captured.
France 24 is reporting that Gomaa Al Komati of the Libyan NTC said: I confirm that Saif Al Islam has been captured. We believe Qaddafi is now in Algeria. Al-Jazeera English confirmed that Saif Al-Islam had been captured, and confirmed that the presidential guard had surrendered.
Both sons are captured, according to other reports -- from Al Jazeera: sources confirm arrest of Qaddafi's two sons: Saif Gadafi and Sady in Tripoli Libya.
CNN is confirming there's currently a fierce gun battle outside the Rixos hotel in Tripoli, and Al Arabiya reports Gaddafi presidential guard surrenders to rebels, citing rebel national transitional council." Sky News describes the scene in Tripoli: "These scenes are amazing - there are hundreds of people who have come out onto the streets to greet this convoy of rebel soldiers. You can hear them singing and dancing, it is an amazing scene."
4:30 p.m.: Security brigade surrenders, and UNCONFIRMED reports that Qaddafi may even be dead.
Al-Jazeera says brigade in charge of Gadhafi's security surrenders and lays down arms, according to Reuters. Reports are that there is singing and dancing -- with even women and children out in the streets: "Scenes in Tripoli are 'absolutely amazing' with many hundreds of people on the streets celebrating."
Malik Al-Abdeh, Chief Editor of the Syrian pro-democracy satellite channel Barada TV, tweeted: "CONFIRMED: Mu'amar Gaddafi, leader of Libya for 42 years, has been shot DEAD in vicinity of Rixos Hotel in Tripoli."
4:00 p.m.: Libyan rebels marched into parts of Tripoli on Sunday evening, pushing past the city’s outer defense lines and setting off celebrations in some western neighborhoods of the capital, the New York Times reports. Al-Jazeera reports that Libya rebels arrived in the Green Square in Tripoli Center.
3:00 p.m.: Al-Jazeera reports that Libya's defected ex-prime minister Abdes Salam Jalloud said Sunday he believed it was too late for his former ally Muammar Gaddafi to strike a deal to leave power and he would likely be killed. In an interview with Italian media he said:
I believe the regime has a week left, 10 days at most. And maybe even less. He has no way of leaving Tripoli. All the roads are blocked. He can only leave with an international agreement and I think that door is closed. I think it would be difficult for Gaddafi to give himself up. And he is not like Hitler who had the courage to kill himself... I don't think the evolution of the situation in Tripoli will allow him to survive.
2:30 p.m.: Libyan rebel forces reportedly in outskirts of Tripoli, taking over military base. Fox News reports:
Euphoric Libyan rebels have pushed to the western outskirts of Tripoli without meeting any resistance after they overran a major military base that defends the capital... giving them access to large stores of weapons... Hours earlier, the same rebel force of hundreds drove out elite forces led by Muammar al-Qaddafi's son in a brief gunbattle. The fighters hauled off truckloads of weapons and advanced full speed toward the capital... NATO has reportedly been bombing Qaddafi's Tripoli compound continuously, though no casualties have been reported yet.
2 p.m.: Germany and France have acknowledged Qaddafi's losing battle and asked him to step down, the AP reports. French President Nicolas Sarkozy urged Gadhafi to "spare his people further useless suffering" by stepping down immediately. He also said that the outcome of the 6-month-long conflict "is no longer in doubt."
1 p.m.: Qaddafi will stay until the end, and Libyan government denies loss of control to rebels. Qaddafi issued a new audio message played over state television on Sunday saying he will stay in Tripoli "until the end" and calling on his supporters to help liberate the capital from a rebel offensive, according to the New York Times. He said he was "afraid that Tripoli will burn." Rebel troops claimed to have broken Qaddafi’s “ring of steel” defense and advanced upon the city. Nonetheless, government spokesman Moussa Ibrahim maintained on state TV said that city remained well-defended by “thousands of professional and volunteer soldiers” loyal to the government and that “the situation is under control.”
12:30 pm: Libyan rebels may hope to avoid a battle in Tripoli. "Libyan rebel forces ill-equipped to fight their way into a city the size of Tripoli may look to locally brokered deals or a burgeoning popular uprising to break the will of Muammar Gaddafi's forces," Reuters reports.
Gauging the loyalty of Tripoli's population is far from easy. Gaddafi loyalists have put on many marches and demonstrations of loyalty in recent months, but hundreds if not thousands of his opponents also took to the streets in the early stages of the uprising before they were cowed. The rebels will hope security forces will melt away... "I think they'll wait on the outskirts and hope for either an uprising or that Gaddafi decided to call it a day and leaves," said David Hartwell, Middle East analyst for IHS Jane's
Reuters adds that "Some say Gaddafi himself might already have fled, perhaps to his hometown of Sirte or a desert base further south. The long speeches at boisterous public meetings have given way to broadcast addresses delivered on scratchy telephone lines."
12 p.m.: The White House has predicted that Muammar Gaddafi's days as leader of Libya are numbered, from , from Al-Jazeera "The United States continues to communicate closely with our allies, partners, and the (rebels' Transitional National Council)... We believe that Gaddafi's days are numbered, and that the Libyan people deserve a just, democratic and peaceful future," said White House spokesman Josh Earnest.
Want to add to this story? Let us know in comments or send an email to the authors at usehgal at theatlantic dot com or connorbsimpson at gmail dot com. You can share ideas for stories on the Open Wire. ||||| AL-MAYA/TRIPOLI (Reuters) - Rebel fighters streamed into Tripoli as Muammar Gaddafi's forces collapsed and crowds took to the streets to celebrate, tearing down posters of the Libyan leader.
A convoy of rebels entered a western neighborhood of the city, firing their weapons into the air. Rebels said the whole of the city was under their control except Gaddafi's Bab Al-Aziziya-Jazeera stronghold, according to al-Jazeera Television.
Gaddafi made two audio addresses over state television calling on Libyans to fight off the rebels.
"I am afraid if we don't act, they will burn Tripoli," he said. "There will be no more water, food, electricity or freedom."
Gaddafi, a colorful and often brutal autocrat who has ruled Libya for over 40 years, said he was breaking out weapons stores to arm the population. His spokesman, Moussa Ibrahim, predicted a violent reckoning by the rebels.
"A massacre will be committed inside Tripoli if one side wins now, because the rebels have come with such hatred, such vendetta...Even if the leader leaves or steps down now, there will be a massacre."
NATO, which has backed the rebels with a bombing campaign, said the transition of power in Libya must be peaceful.
After a six-month civil war, the fall of Tripoli came quickly, with a carefully orchestrated uprising launched on Saturday night to coincide with the advance of rebel troops on three fronts. Fighting broke out after the call to prayer from the minarets of the mosques.
Rebel National Transitional Council Coordinator Adel Dabbechi confirmed that Gaddafi's younger son Saif Al-Islam had been captured. His eldest son Mohammed Al-Gaddafi had surrendered to rebel forces, he told Reuters.
Only five months ago Gaddafi's forces were set to crush the rebel stronghold of Benghazi, the leader warning in a television address that there would be "no mercy, no pity" for his opponents. His forces, he said, would hunt them down "district to district, street to street, house to house, room to room."
The United Nations then acted quickly, clearing the way for creation of a no-fly zone that NATO, with a campaign of bombing, used ultimately to help drive back Gaddafi's forces.
"It's over. Gaddafi's finished," said Saad Djebbar, former legal adviser to Libyan government.
Al Jazeera television aired images of people celebrating in central Tripoli and tearing down posters of Gaddafi, which had dominated Libyan cities for decades.
In Benghazi in the east, thousands gathered in a city-center square waving red, black and green opposition flag as news filtered through of rebel advances into Tripoli.
"It's over!" shouted one man as he dashed out of a building, a mobile telephone clutched to his ear. Celebratory gunfire and explosions rang out over the city and cars blaring their horns crowded onto the streets. Overhead, red tracer bullets darted into a black sky.
"It does look like it is coming to an end," said Anthony Skinner, Middle East analyst, Maplecroft. "But there are still plenty of questions. The most important is exactly what Gaddafi does now. Does he flee or can he fight?"
"In the slightly longer term, what happens next? We know there have been some serious divisions between the rebel movement and we don't know yet if they will be able to form a cohesive front to run the country."
Gaddafi, in his second audio broadcast in 24 hours, dismissed the rebels as rats.
"I am giving the order to open the weapons stockpiles," Gaddafi said. "I call on all Libyans to join this fight. Those who are afraid, give your weapons to your mothers or sisters.
"Go out, I am with you until the end. I am in Tripoli. We will ... win."
A Libyan government official told Reuters that 376 people on both sides of the conflict were killed in fighting overnight on Saturday in Tripoli, with about 1,000 others wounded.
A diplomatic source in Paris, where the government has closely backed the rebels, said underground rebel cells in the capital had been following detailed plans drawn up months ago and had been waiting for a signal to act.
That signal was "iftar" -- the moment when Muslims observing the holy months of Ramadan break their daily fast. It was at this moment that imams started broadcasting their message from the mosques, residents said. (Additional reporting by Missy Ryan in Tripoli, Robert Birsel in Benghazi, Libya, William Maclean in London, Hamid Ould Ahmed in Algiers; Writing by Christian Lowe and Richard Valdmanis; Editing by Andrew Roche) | As the Libya endgame continues, news is breaking quickly: A rebel leader tells the AP Seif al-Islam Gadhafi has been arrested, and Reuters reports that Moammar Gadhafi's government is ready to negotiate with rebels. Earlier reports on Twitter stated that both of Gadhafi's sons had been captured (his eldest reportedly surrendered); that Gadhafi's security and presidential guard have surrendered; and that hundreds of people are out on the streets of Tripoli celebrating. The Washington Post reports that Gadhafi's compound is basically surrounded and the rebel flag flies from many buildings. Earlier, Reuters reported that the rebels entered the capital with little resistance. Rebels say they currently control a handful of Tripoli neighborhoods. Gadhafi recently gave his second audio message in less than 24 hours on state TV, urging those in Tripoli to arm themselves and "fight for your politics, your oil, your land. I am with you in Tripoli—together until the ends of the earth," he shouted, sounding angry. Reuters also notes that he vowed to stay in Tripoli "until the end." He stated his fears that "they will burn Tripoli," but assured loyalists that "we will ... win." The Atlantic Wire says that, according to Moussa Ibrahim, 1,300 people have been killed in 11 hours. |
This report provides an analysis of state and federal laws regarding diploma mills, which offer students academic degrees for little or no meaningful academic work. Specifically, this report addresses the criminal, civil, and common law ramifications for both the manufacturers and distributors of phony degrees, as well as for the buyers and users of such degrees. This analysis does not address counterfeit degrees that purport to be from existing accredited universities, but rather focuses primarily on the legal issues surrounding phony degrees from entities that provide diplomas without requiring an appropriate level of academic achievement. Although no formal legal definition exists, a diploma mill is generally regarded as an entity that lacks accreditation from a state or professional accreditation organization, but that nonetheless sells college and graduate degrees that are fraudulent or worthless because of the lack of standards imposed on the purchasers of such degrees. While experts estimate that diploma mills have existed for hundreds of years, such entities have proliferated in recent decades due to lax law enforcement and technological advances such as the rise of the Internet. By some estimates, there are several hundred diploma mills operating at any given time, with revenue in excess of $500 million per year. Because many diploma mills use the Internet to operate their phony institutions of higher education, it is sometimes difficult to distinguish between purveyors of phony degrees and legitimate online institutions that operate traditional distance learning degree programs. This difficulty is one reason that federal and state policy makers have trouble drafting laws that can be used to shut down phony institutions. Nevertheless, most diploma mills display some or all of the following hallmarks of a fraudulent operation: (1) they are unaccredited or they claim to be accredited but the organization that they cite is not one of the legitimate accrediting agencies recognized by the Council on Higher Education Accreditation or the United States Department of Education (ED); (2) they do not require previous academic records, such as grade point average or test scores, for admission; (3) they charge tuition based on the number of degrees purchased rather than the number of credit hours or courses taken; (4) they offer many or all degree credits based on a student's life experience; (5) they guarantee that students will receive diplomas in far less time than it would take at a traditional university; (6) their professors often have degrees from unaccredited universities and have little or no contact with students; (7) they are located in a foreign country or have addresses that are post office box numbers; and (8) they have names that are strikingly similar to legitimate, accredited universities. Diploma mills pose dangers to consumers and employers, as well as the general public and to legitimate institutions of higher education. Although some individuals who obtain degrees from diploma mills are active conspirators in fraud, others are innocent victims of financial scams in which they pay hundreds or thousands of dollars for worthless degrees. If the fraudulent credentials are discovered, such individuals may lose their jobs or face civil or criminal charges. Regardless of whether such individuals have fraudulent intent, employers who hire individuals with fake degrees may, at best, have inadequately trained employees and, at worst, expose themselves to liability for the mistakes of such employees. Finally, diploma mills may harm members of the general public who receive professional services from individuals with fake academic credentials, and they may damage the reputation of legitimate degree-granting institutions. Despite the potential harm caused by diploma mills, state and federal efforts to shut down these entities have been somewhat erratic over the years, depending in part on the jurisdiction and enforcement priorities involved. For example, enforcement has been weak at times for reasons that range from the difficulty in distinguishing between fraudulent and legitimate institutions to the ability of diploma mills to move jurisdictions quickly if authorities in one state begin an aggressive enforcement campaign. Further complicating matters is the fact that every state has its own diploma mill laws, which vary in strength and effectiveness. Meanwhile, the federal government pursues enforcement actions against diploma mills under a separate set of laws. These federal and state laws regarding diploma mills are discussed in detail below. In general, the regulation of education in the United States is a state responsibility. Nevertheless, the federal government plays a role in education oversight, and diploma mills are no exception. Although federal law does not explicitly prohibit diploma mills, the sale of fraudulent academic credentials is punishable under several federal statutes relating to mail fraud, wire fraud, and conspiracy, and at least five different governmental agencies have some direct involvement in or authority over the legal issues raised by diploma mills, namely the Federal Bureau of Investigation (FBI), which is housed within the Department of Justice (DOJ); the U.S. Postal Inspection Service; the Federal Trade Commission (FTC); the Department of Education; and the Department of Homeland Security (DHS). In addition, where tax fraud is involved, the Internal Revenue Service (IRS) has been known to participate in prosecutions of diploma mill operators, and attorneys with a separate division of DOJ prosecute cases involving fraud against the federal government. Finally, the Office of Personnel Management (OPM) has personnel rules that prohibit applicants and employees from making misrepresentations to federal agencies. Each of these agencies, and the relevant laws and regulations, are discussed in detail in this section. The two agencies with the greatest degree of legal authority to regulate and prosecute diploma mills are the FBI and the U.S. Postal Inspection Service. Both agencies have the authority to investigate crimes involving mail fraud, wire fraud, and other types of fraud, and diploma mills are often prosecuted under these statutes if they use the mail or telephone wire to commit fraud. Under the federal mail fraud statute, use of the mail with intent to commit fraud is punishable both civilly and/or criminally, respectively, by a fine and/or by up to twenty years in prison. Use of a fictitious name or address in connection with mail fraud or any other unlawful purpose is punishable by monetary fines and/or up to five years in prison. Likewise, violations of the wire fraud statute are punishable with fines and/or up to twenty years in prison. In addition, any attempt or conspiracy to commit the types of fraud described above is subject to the same penalties that would have applied if the underlying crime had successfully been committed. If an individual is violating or about to violate these anti-fraud provisions, DOJ can seek an injunction in federal court to prevent such violations. Finally, the Post Office is authorized to take certain preventative actions if an individual conducts "a scheme or device for obtaining money or property through the mail by means of false representations." Over the years, federal enforcement of laws against diploma mills has waxed and waned. For example, the FBI and the Postal Inspection Service have periodically engaged in collaborative criminal investigations of diploma mills. Indeed, these investigations were particularly active from the late 1970s to the early 1990s, when the FBI spearheaded the DipScam operation. Short for diploma scam, DipScam consisted of an FBI task force whose successful investigations of diploma mills led to multiple arrests and convictions under federal anti-fraud statutes and to a decline in phony institutions. Ultimately, the DipScam task force disbanded shortly after the retirement of its top diploma mill expert, and phony institutions have made a comeback in the years since. Investigations and prosecutions of diploma mills also appear to have declined in recent years as federal agencies have focused enforcement efforts on other priorities. For example, since the events of September 11, 2001, combating terrorism has been the FBI's top priority, while the Postal Inspection Service has aggressively targeted the issue of identity theft in recent years. The FTC is another federal agency with some regulatory authority over diploma mills. Under the Federal Trade Commission Act, the FTC is authorized to enforce consumer protection laws that prohibit fraud, deception, and unfair business practices. As defined by the statute, unlawful deceptive trade practices include false and misleading advertising. With respect to vocational and distance learning schools, the FTC has interpreted the ban on false and misleading advertising to prohibit such schools from using deceptive trade or business names, misrepresenting the extent or nature of accreditation or approval, or issuing deceptive diplomas, degrees, or certificates. Specifically, FTC guidance notes that (a) It is deceptive for an industry member to issue a degree, diploma, certificate of completion, or any similar document, that misrepresents, directly or indirectly, the subject matter, substance, or content of the course of study or any other material fact concerning the course for which it was awarded or the accomplishments of the student to whom it was awarded. (b) It is deceptive for an industry member to offer or confer an academic, professional, or occupational degree, if the award of such degree has not been authorized by the appropriate State educational agency or approved by a nationally recognized accrediting agency, unless it clearly and conspicuously discloses, in all advertising and promotional materials that contain a reference to such degree, that its award has not been authorized or approved by such an agency. For false or misleading advertisements made with intent to defraud or mislead, penalties for a first offense consist of a fine of up to $5,000 or imprisonment for up to six months, or both. Penalties for a second offense consist of a fine of up to $100,000 or imprisonment for up to one year, or both. Unlike the FBI or Postal Inspection Service, the FTC is also authorized to sue individuals or companies that violate the trade statute in order to seek legal redress for injuries to consumers. Thus, the FTC may sue diploma mills in order to secure refunds or damages for consumers who have been deceived by phony degree-granting institutions. In addition, the FTC is authorized to seek injunctions in federal court to prevent false and misleading advertising. Despite this extensive authority, the FTC does not appear to have pursued many enforcement actions against diploma mills. ED is another agency with some involvement in the issue of diploma mills. Although ED is responsible for overseeing federal education efforts, the agency does not have any statutory authority to accredit colleges and universities. Rather, for purposes of identifying institutions that are eligible to receive federal student financial aid, the Higher Education Act (HEA) authorizes ED to recognize independent accrediting agencies that meet certain criteria. These accrediting agencies, in turn, verify the legitimacy of institutions of higher education. Because ED's regulatory authority is limited to overseeing entities that receive federal funding under statutes that provide federal financial assistance for education activities, the agency "has no oversight or regulatory authority over institutions that do not participate in the programs included in the HEA. Thus, we have no independent authority or ability to determine if such a school is a diploma mill." Furthermore, although ED recognizes legitimate accrediting agencies, some diploma mills falsely claim that they are accredited, but the accrediting agency that they cite is not recognized by ED or by the Council for Higher Education Accreditation, which is a private organization that also recognizes accrediting agencies. ED, however, does not have the authority to recognize these fake accreditation agencies. ED also lacks regulatory jurisdiction over foreign accrediting agencies or foreign educational institutions that do not participate in HEA programs, although U.S. accrediting agencies that have been recognized by ED may accredit foreign institutions that they determine to be comparable to U.S. institutions. Because many U.S.-based employers, academic institutions, and professional licensing organizations require evidence of academic achievement before they will hire, admit, or license applicants, individuals that have earned degrees or credits from institutions that are not accredited in the U.S. can verify their foreign academic credentials by consulting private organizations that provide credential evaluation services in order to establish that such foreign degrees or credits are comparable to those received from U.S. institutions. Despite ED's lack of oversight responsibility with respect to diploma mills, the agency has taken several steps to curb the proliferation of these phony institutions. To that end, ED has established a section on its website with detailed information on diploma mills and how to avoid them. In particular, ED maintains on this website a list of recognized accrediting agencies and accredited institutions so that students can verify that they will be attending a legitimate college or university. In addition, ED has taken a leading role in facilitating interagency coordination with respect to diploma mills. Recently, for example, ED convened a meeting of federal and state officials in order to "share information and create awareness about federal and state efforts to address the problem of diploma mills and to lay the groundwork for greater coordination in the future." In its capacity to issue visas that allow entry into the U.S., the U.S. Citizenship and Immigration Services (USCIS) of DHS also confronts the problem of diploma mills. For example, in order to receive a student visa, students must be enrolled in a federally approved academic institution. Likewise, some types of employment visas require a baccalaureate or advanced degree to qualify. Thus, existing immigration requirements and procedures provide guidelines for examining academic or professional credentials, including provisions for requesting an advisory evaluation from a credential evaluation service such as those described above. Despite concerns from some observers about the possible national security implications of diploma mills, existing immigration requirements and procedures provide for the screening of all visa applicants for terrorism and criminal grounds of inadmissibility. Therefore, an alien who is a known or suspected terrorist would be denied a visa regardless of whether the alien offers a fraudulent diploma as supporting documentation for an employment-based visa application or attempts to apply for a student visa at an unapproved institution. Other federal agencies have some involvement with the problems posed by diploma mills, although these agencies appear to have no direct regulatory authority over the activities of diploma mills. For example, as noted above, the IRS has been known to participate in prosecutions of diploma mill operators where tax fraud is involved, and attorneys with DOJ prosecute cases involving fraud against the federal government The Secret Service has also been involved in diploma mill investigations. Finally, certain OPM regulations that bar federal job applicants and employees from making misrepresentations to federal agencies, as well as other federal laws that punish individuals who make false or fraudulent statements to the federal government, appear to affect individuals whose claims of educational achievement are based on degrees received from diploma mills. It is these personnel rules and anti-fraud laws that most directly apply to situations involving use of diploma mill degrees in federal employment. Under federal law, both OPM and relevant agencies are authorized to establish a minimum educational requirement for a given job "if the duties of a scientific, technical, or professional position cannot be performed by an individual who does not have a prescribed minimum education." As a result, many federal jobs require applicants to have degrees in specific fields, such as law or medicine. Although federal personnel rules do not appear to address the issue of fraudulent academic credentials directly, federal law does direct OPM to consider the character of job applicants and to examine their suitability for federal employment. As part of this suitability review, OPM is authorized to take action against applicants, appointees, and employees to "protect the integrity or promote the efficiency of the service." According to the regulations, OPM may consider "dishonest conduct" and "material, intentional false statements or fraud in examination or appointment" as a basis for such a determination. Thus, it appears that individuals who knowingly use fraudulent academic credentials in order to secure federal employment are subject to disciplinary action, including cancellation of eligibility, denial of appointment, removal, cancellation of reinstatement eligibility, or debarment for a period of up to three years. Moreover, according to OPM, falsification of security clearance forms, which require information about education history, is a separate offense that could lead to loss of employment and/or security clearance. In order to combat the use of diploma mills in federal employment, OPM recently announced revisions to federal employment application forms and to OPM's USAJOBS website, which provides information about federal jobs and application documents. These revisions include the addition of an accreditation field that asks applicants whether their academic institutions were accredited by ED at the time of attendance. The revised documents also instruct applicants not to list credentials obtained from diploma mills, degrees based only on life experience, or degrees obtained from schools with few or no academic standards. In addition to revising federal employment forms, OPM has recently held a series of training sessions for managers at federal agencies in order to provide information about diploma mills and guidance for detecting the use of fraudulent credentials by federal employees. OPM has also indicated that it plans to hire additional staff to "oversee the adjudication of and conduct appropriate follow-up to personnel background investigations where diploma mill and other significant issues are identified." In addition to regulations regarding employee suitability, federal law allows agencies to pay for any academic degree training received by their employees, as long as such training is provided by a college or university that is accredited by a nationally recognized body. Since one hallmark of diploma mills is a lack of accreditation, such regulations appear to bar the use of federal funds to pay for employees to receive phony degrees from diploma mills. No such bar, however, appears to be applicable to the use of agency funds to pay for individual training courses offered by unaccredited school. Rather, OPM regulations specify only that "the agency head shall evaluate training to determine how well it meets short and long-range program needs by occupations, organizations, or other appropriate groups and that the "agency head may conduct the evaluation in the manner and frequency he or she considers appropriate." Several years ago, the Government Accountability Office (GAO; formerly the General Accounting Office) conducted an investigation to determine whether the federal government has paid for diploma mill degrees and whether federal employees who hold senior-level positions claim degrees from diploma mills. As a result of this investigation, GAO identified nearly $170,000 in fees that the federal government has paid on behalf of employees who have obtained degrees from diploma mills and 28 senior-level federal employees with diploma mill degrees at the eight agencies selected for review. For a variety of reasons, GAO has indicated that both figures appear to understate the extent of federal payments and the number of federal employees associated with diploma mills. To clarify federal employment policy with respect to academic credentials and employee training programs, OPM recently issued revisions to its Qualifications Standards Operating Manual. Under these revisions, OPM specified that applicants from institutions accredited by ED-recognized accrediting agencies or pre-accredited by ED meet the minimum qualification requirements for federal employment, but that applicants with credentials from pre-accredited schools, unlike those from accredited schools, are not eligible for student loan repayments. Although federal employees may not attend degree training programs at an institution unless it is accredited, they are eligible for tuition reimbursement for attending individual training classes at schools that are pre-accredited or that are deemed comparable to accredited institutions. Applicants from institutions in the latter category, including foreign schools, may also be deemed qualified for federal employment if they meet certain criteria set forth in the operating manual. Federal agencies, however, may not consider or accept credentials from diploma mills for any aspect of federal employment, including eligibility standards, student loan repayment, or employee training of any kind. In addition to OPM's personnel rules barring the use of diploma mill credentials in federal employment, other federal statutes may also be relevant to combating the use of fraudulent degrees. For example, a federal employee who knowingly and intentionally makes false or fraudulent statements or uses fake documents containing false or fraudulent statements may violate federal criminal law. According to the statute: whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully . . . makes any materially false, fictitious, or fraudulent statement or representation; or . . . makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title or imprisoned not more than 5 years, or both. Since issues related to personnel or employment practices may be considered to be matters that fall within the jurisdiction of the various branches of government, a federal employee who knowingly and intentionally uses a phony degree to secure federal employment or advancement could potentially be criminally liable. It is important to note, however, that this statute requires evidence of a specific intent to defraud, which is often difficult to establish. In addition, because of the intent requirement, this law would not apply to federal employees who, believing that their degrees are legitimate, innocently claim educational achievement based on degrees from diploma mills. Likewise, an employee who knowingly and intentionally secures agency funding to pay for his or her fraudulent degree may violate federal criminal laws. Indeed, any individual who "knowingly and with intent to defraud the United States, or any agency thereof, possesses any false, altered, forged, or counterfeited writing or document for the purpose of enabling another to obtain from the United States, or from any agency, officer or agent thereof, any sum of money, shall be fined under this title or imprisoned not more than five years, or both." Although it does not appear that this provision has been applied to diploma mill fraud in the context of federal employment, the language of this provision suggests that federal employees could potentially incur criminal penalties for collaborating with a diploma mill in order to get a federal agency to pay for a phony degree. Like the more general provision regarding false or fraudulent statements, this provision requires evidence of a specific intent to defraud. Finally, conspiracy to commit fraud against the United States government is also a federal crime punishable by fine, imprisonment for up to five years, or both. As noted above, state governments, rather than the federal government, have primary responsibility for overseeing education in the United States. Laws regarding diploma mills, however, vary widely in strength and effectiveness from state to state. While some states have strong laws that explicitly prohibit diploma mills and enforce these laws vigorously, other states have weak laws, lax enforcement, or both. This section examines a representative sample of state laws pertaining to diploma mills. It is important to note, however, that in addition to laws that specifically address diploma mills, many states have general anti-fraud statutes or professional licensing laws that may also apply when states are seeking to curtain diploma mill activities. These laws are beyond the scope of this report and therefore are not included in the discussion below. States that have strong laws regarding diploma mills include Oregon, New Jersey, and Illinois. Under Oregon law, for example, the Office of Degree Authorization (ODA) in the Oregon Student Assistance Commission is empowered to approve schools that offer academic degrees, validate claims of degree possession, and terminate substandard of fraudulent degree activities. Schools are prohibited from awarding degrees or from providing services purporting to lead to a degree unless they are approved by ODA, and individuals are barred from claiming that they possess an academic degree unless: that degree has been awarded by an institution that is approved by ODA or that is accredited by an agency recognized by ED; or the claim is accompanied by a disclaimer regarding the lack of accreditation and ODA approval. The penalty for individuals who violate this latter provision is a fine of up to $1,000. Oregon appears to aggressively enforce this statute, and ODA maintains a website with a list of unaccredited institutions whose degrees may not lawfully be used in the state. Under New Jersey law, the buying or selling with intent to deceive of any diploma purporting to confer an academic degree is unlawful. Furthermore, individuals are prohibited from using fraudulent academic credentials in connection with any business, trade, profession, or occupation, and may not intentionally misrepresent themselves as having received such a degree. Individuals who violate the New Jersey statute are liable for a civil penalty of $1,000 per offense. Similarly, Illinois' Academic Degree Act aims to prevent the use of fraudulent academic credentials. Under the statute, institutions are prohibited from awarding any degrees until they have received authorization and approval from the State Board of Higher Education. In order to qualify for approval, institutions that provide education in residence must require an appropriate period of instruction, while institutions that do not conduct instruction in residence must meet criteria regarding physical facilities, faculty, and record keeping. The Board of Higher Education is authorized to inspect the premises of degree-granting institutions, and refusal to permit such inspections is punishable by a revocation of approval, as well as other penalties available under the act. Since violations of the act are a felony, such penalties include fines, restitution, probation, or imprisonment. According to one diploma mill expert, Illinois is a state that aggressively enforces its diploma mill laws. Although Oregon, New Jersey, and Illinois are not alone in having strong diploma mill laws that are effectively enforced, some states have weak laws, law enforcement, or both. According to one diploma mill expert, Mississippi, Alabama, and Wyoming offer three examples of states that remain diploma mill havens. Neither Mississippi nor Alabama appears to have laws specifically targeting diploma mills on their books. Wyoming, on the other hand, does have laws requiring institutions that are located in the state and that lack legitimate accreditation to be licensed by the state, to maintain physical facilities, to be inspected by the state, and to employ instructors who meet certain educational criteria. The law also prohibits institutions from awarding degrees solely on the basis of payment of tuition or other suspect criteria or from falsely claiming accreditation. Violations of the statute are punishable as a misdemeanor by a fine of up to $1,000 or up to six months in prison, or both. Despite these prohibitions and penalties, Wyoming reportedly does not vigorously enforce its higher education licensing laws. Ultimately, it appears that the majority of states has laws that specifically target diploma mills. In addition, most states have laws of more general applicability, such as statutes pertaining to "civil actions for fraud and misrepresentation and criminal prosecutions for forgery, embezzlement, theft of services, or false pretenses or impersonation," that they can use to shut down diploma mills should they choose to do so. Enforcement of such laws, however, appears to vary from state to state, with "relatively few reported cases involving the criminal prosecution of persons who have made or used fraudulent academic credentials." In part, successful prosecutions may be rare since it is difficult to determine jurisdiction if a diploma mill operates in several states at once and since such institutions may relocate quickly and easily if the state in which they reside cracks down. Thus, the popularity of a given state as a haven for diploma mills often changes over time. As one commentator concludes: In the end, sound legislation at the state level is the first line of defense against unscrupulous diploma mill operators. But legislation by itself is insufficient. A well-equipped enforcement agency and a public mood that will support its efforts are also needed. In addition to prosecution under state and federal legislation, diploma mills may potentially be subject to a common law tort action for negligent misrepresentation or fraud. Under a lawsuit for fraud, an individual who was injured as a result of receiving a phony degree from a diploma mill could sue for damages if: (1) the owner or operator of the diploma mill knowingly made false representations regarding the quality of the degree and (2) the individual relied on those statements to his or her pecuniary detriment. A suit for negligent misrepresentation may be pursued if the defendant did not exercise reasonable care or competence in obtaining or communicating the false information, even if there was no intention to deceive nor knowledge of the information's falsity. In addition to common law actions for fraud or misrepresentation, many states have enacted unfair or deceptive practices statutes that provide consumers with remedies against false, misleading, and deceptive business practices, unconscionable actions, or breach of warranty. Depending on the circumstances, victims of diploma mill scams might be able to assert claims under these state statutes. Despite the available array of laws targeting diploma mills, these phony institutions continue to exist. Many observers believe that "[t]here appears to be a lack of prosecutorial interest at both the state and federal level in pursuing cases involving fraudulent academic credentials." Certainly, there have been notable examples of diploma mill prosecutions over the years. Nevertheless, the strength of overall enforcement efforts is difficult to gauge since it is unclear how many prospective cases have remained unpursued. | This report provides an analysis of state and federal laws regarding diploma mills, which offer students academic degrees for little or no meaningful academic work. Specifically, this report addresses the criminal, civil, and common law ramifications for both the manufacturers and distributors of phony degrees, as well as for the buyers and users of such degrees. This analysis does not address counterfeit degrees that purport to be from existing accredited universities, but rather focuses primarily on the legal issues surrounding phony degrees from entities that provide diplomas without requiring an appropriate level of academic achievement. |
Subsets and Splits