Fired U.S. Attorney Preet Bharara Said to Have Been Investigating HHS Secretary Tom Price

Tom Price
Tom Price of Georgia speaking at CPAC. (Photo by Gage Skidmore)

By Robert Faturechi, ProPublica

Former U.S. Attorney Preet Bharara, who was removed from his post by the Trump administration last week, was overseeing an investigation into stock trades made by the president’s health secretary, according to a person familiar with the office.

Tom Price, head of the Department of Health and Human Services, came under scrutiny during his confirmation hearings for investments he made while serving in Congress. The Georgia lawmaker traded hundreds of thousands of dollars worth of shares in health-related companies, even as he voted on and sponsored legislation affecting the industry.

Price testified at the time that his trades were lawful and transparent. Democrats accused him of potentially using his office to enrich himself. One lawmaker called for an investigation by the Securities and Exchange Commission, citing concerns Price could have violated the STOCK Act, a 2012 law signed by President Obama that clarified that members of Congress cannot use nonpublic information for profit and requires them to promptly disclose their trades.

The investigation of Price’s trades by the U.S. Attorney’s Office for the Southern District of New York, which hasn’t been previously disclosed, was underway at the time of Bharara’s dismissal, said the person.

Bharara was one of 46 U.S. attorneys asked to resign after Trump took office. It is standard for new presidents to replace those officials with their own appointees. But Bharara’s firing came as a surprise because the president had met with him at Trump Tower soon after the election. As he left that meeting, Bharara told reporters Trump asked if he would be prepared to remain in his post, and said that he had agreed to stay on.

When the Trump administration instead asked for Bharara’s resignation, the prosecutor refused, and he said he was then fired. Trump has not explained the reversal, but Bharara fanned suspicions that his dismissal was politically motivated via his personal Twitter account.

“I did not resign,” he wrote in one tweet over the weekend. “Moments ago I was fired.”

“By the way,” Bharara said in a second tweet, “now I know what the Moreland Commission must have felt like.”

Bharara was referring to a commission that was launched by New York Gov. Andrew Cuomo in 2013 to investigate state government corruption, only to be disbanded by the governor the next year as its work grew close to his office. In that case, Bharara vowed to continue the commission’s work, and eventually charged Cuomo associates and won convictions of several prominent lawmakers.

Bharara referred questions from ProPublica to the U.S. attorney’s office in the Southern District of New York. A spokesperson there declined to comment. The Justice and Health and Human Services departments also didn’t respond to requests for comment.

A White House spokesperson didn’t respond to questions about whether Trump or anyone in his cabinet was aware of the inquiry into Price’s trades.

In December, the Wall Street Journal reported that Price traded more than $300,000 worth of shares in health companies over a recent four-year period, while taking actions that could have affected those companies. Price, an orthopedic surgeon, chaired the powerful House Budget Committee and sat on the Ways and Means Committee’s health panel.

In one case, Price was one of just a handful of American investors allowed to buy discounted stock in Innate Immunotherapeutics — a tiny Australian company working on an experimental multiple sclerosis drug. The company hoped to be granted “investigational new drug” status from the Food and Drug Administration, a designation that expedites the approval process.

Members of congress often try to apply pressure on the FDA. As ProPublica has reported, Price’s office has taken up the causes of health care companies, and in one case urged a government agency to remove a damaging drug study on behalf of a pharmaceutical company whose CEO donated to Price’s campaign.

Innate Immunotherapeutics’ CEO Simon Wilkinson told ProPublica that he and his company have not had any contact with American law enforcement agencies and have no knowledge of authorities looking at Price’s stock trades.

Another transaction that drew scrutiny was a 2016 purchase of between $1,001 and $15,000 in shares of medical device manufacturer Zimmer Biomet. CNN reported that days after Price bought the stock, he introduced legislation to delay a regulation that would have hurt Zimmer Biomet.

Price has said that trade was made without his knowledge by his broker.

In a third case, reported by Time magazine, Price invested thousands of dollars in six pharmaceutical companies before leading a legislative and public relations effort that eventually killed proposed regulations that would have harmed those companies.

Louise Slaughter, a Democratic Congress member from New York who sponsored the STOCK Act, wrote in January to the SEC asking that the agency investigate Price’s stock trades. “The fact that these trades were made and in many cases timed to achieve significant earnings or avoid losses would lead a reasonable person to question whether the transactions were triggered by insider knowledge,” she wrote.

What federal authorities are looking at, including whether they are examining any of those transactions, is not known.

Along with the Price matter, Bharara’s former office is investigating allegations relating to Fox News, and has been urged by watchdog groups to look into payments Trump has received from foreign governments through his Manhattan-based business. Bharara’s former deputy, Joon Kim, is now in charge of the office, but Trump is expected to nominate his replacement within weeks.

ProPublica reporters Jesse Eisinger and Justin Elliott and research editor Derek Kravitz contributed to this story.

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Is Preet Bharara Trying to Tell Us Something?

Preet Bharara
Preet Bharara, U.S. Attorney for the Southern District of New York, speaks at Harvard Law School’s Class Day on Wednesday, May 28, 2014. (U.S. Department of Justice photo).

By Cezary Podkul, ProPublica

Fired by President Donald Trump, Preet Bharara left behind a mysterious, thirteen-word message. “By the way, I know what the Moreland Commission must have felt like,” he tweeted last Sunday.

Americans are getting used to deciphering the tweets of a president who eviscerates his enemies in 140 characters or less. So perhaps it’s inevitable that a public official whom he dismissed would fight back in the same way — and similarly raising questions about the tweeter’s intent and state of mind.

A spokesman for the U.S. attorney’s office for the Southern District of New York said he could not elaborate on Bharara’s tweet. And the ex-prosecutor himself has made no further public comment, leaving those familiar with the Moreland Commission’s history to speculate about the presidential parallels.

The cryptic reference to the corruption-fighting commission, which New York Gov. Andrew Cuomo unexpectedly disbanded in March 2014, could simply mean that Bharara knows what it’s like to be let go when there’s still important work to be done. Or it could be read to accuse Trump, like Cuomo, of trying to axe an investigation before it brings down his friends. In the most sinister interpretation, it could even be a threat or a portent — since Cuomo’s allies ultimately faced justice anyway.

“I think Preet is way too smart to simply say something that might have wide-ranging implications without thinking it through,” said Chris Malone, a political science professor at City University of New York’s Lehman College. Malone said he thinks Bharara was “sending a message” that “you’re cutting off an investigation in midstream.”

Following a series of corruption scandals involving state lawmakers, Gov. Cuomo created the Moreland Commission to Investigate Public Corruption, as it was formally known, in July 2013 to root out corruption in politics and state government. It was named for a 1907 law known as the Moreland Act, which gives the governor broad authority to investigate state agencies. The panel’s 25 members included current and former district attorneys from across the state who were empowered to issue subpoenas and compel testimony.

The panel issued a first draft of its findings in December 2013 and vowed to “proceed with ongoing investigations as we continue to follow the money.” Those investigations hadn’t reached their conclusion when, four months later, Cuomo abruptly dismantled the commission.

Cuomo said at the time that a package of modest ethics reforms agreed to by the legislature eliminated the need for the commission. But a subsequent New York Times investigation revealed that Cuomo’s aides undermined the commission as the panel’s subpoenas started getting close to the governor’s office. The timing suggested Cuomo was concerned that the commission might dig up unwelcome facts about his administration.

Enter Bharara. After Cuomo disbanded the panel, the Moreland Commission handed over documents, computer files and other materials from its investigation to the federal prosecutor, who vowed to take over its mantle.

Those documents helped lead to the downfall of longtime Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos. Both were indicted by Bharara’s office and convicted on corruption charges. Another Bharara inquiry led to bribery charges against Cuomo confidant Joseph Percoco and several other players in upstate economic development programs championed by the governor, though Cuomo himself was not charged with any wrongdoing. Percoco and seven other co-defendants pleaded not guilty to the charges in December.

Bharara’s office handled hundreds of cases on everything ranging from public corruption to insider trading to accounting fraud and drug trafficking. It’s unknown whether any of his cases touched on the Trump administration, but the possibility exists: Trump Tower, the president’s unofficial residence, falls squarely within Bharara’s district.

Last November, the president asked Bharara to stay on as the chief prosecutor for the district. Bharara came out of the meeting at Trump Tower saying “I expect that I will be continuing to work at the Southern District of New York” under President Trump. Nevertheless, on Saturday, Trump fired him.

“He made such a big deal of bringing him to Trump Tower and telling him that he’s going to stay on,” Malone said. “Something obviously changed.”

The Moreland Commission handed off its materials to Bharara. Perhaps Bharara’s tweet implies that he, too, has documents to share with other investigators. If so, we’d like to suggest a worthy recipient: ProPublica.

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For New York Families in Custody Fights, a ‘Black Hole’ of Oversight


By Joaquin Sapien, ProPublica

When Anna Frank lost custody of her 9-year-old son, she blamed her husband and the judge who decided the case in his favor.

She also faulted Barbara Burkhard, a psychologist appointed to evaluate the family and advise the court on the matter. According to Frank, Burkhard concluded—after meeting Frank once and without interviewing her son—that their claims of abuse were invented and that Frank had poisoned her child against his father.

Frank ultimately regained custody of her son, based partly on testimony from other psychologists who disputed Burkhard’s contentions. But before she did, she sought sanctions against Burkhard from the agency that oversees licensed psychologists in New York.

Frank’s densely detailed, 12-page complaint to the Office of Professional Discipline was never investigated, let alone acted upon.

“Due to our inability to access records or discuss the services rendered with this psychologist, we are unable to investigate this matter or to initiate disciplinary action based upon your complaint,” a letter from the office, from the spring of 2012, explained. “I am sorry we cannot be of more assistance to you.”

The office’s response was typical, a ProPublica examination shows.

Though psychologists who appear in New York’s Family and Matrimonial Courts help shape decisions of grave consequence—from custody to child protection to juvenile delinquency—their work is subject to little or no professional oversight, purportedly because the confidentiality of such proceedings makes them hard to penetrate even for regulators.

Several lawyers who have represented parents in such court cases say they and their clients have received similar responses when they’ve tried to pursue complaints against court-appointed psychologists with OPD.

“They rely upon a bureaucratic Catch-22 to avoid having to take a hard look at misconduct and take their responsibility of oversight seriously,” said Timothy Tippins, who wrote a 2016 article for the New York Law Journal on inadequate oversight of such evaluators. “You can’t make this bureaucratic bullshit up.”

Pace University law professor Merril Sobie, a former chair of the New York State Bar Association’s Committee on Children and the Law, has pressed OPD on what recourse exists for families who challenge the competence or objectivity of the psychologists in their cases. The agency has provided few answers.

“It’s a black hole,” Sobie said.

When ProPublica asked OPD several months ago to explain why it did not investigate complaints against psychologists working in family and matrimonial courts, officials responded with little more than a description of the office’s mandate and staffing. They declined requests for interviews.

This month, when we pressed again, the office—an arm of the New York Department of Education—issued a short statement indicating it was seeking more authority to gather information in such investigations:

“The State Education Department investigates every complaint that alleges conduct constituting professional misconduct through its Office of Professional Discipline,” the statement said. “The Department’s ability to investigate court-appointed psychologists can be hampered because the records necessary to pursue such an investigation are, by law, private and open to inspection only upon permission of the Family Court. To help eliminate this potential obstacle to a thorough investigation, the Department is discussing with the New York State Legislature amendments to the law that would give our professional conduct officers greater access to court records. We will continue to pursue such an amendment this legislative session.”

Without intervention by OPD, there’s virtually no place to take complaints against court evaluators.

Since 2008, New York City’s Appellate Court has had a committee that certifies the just over 200 psychologists and psychiatrists who get court appointments and can adjudicate complaints against them. Through June 2015, it had received 10 complaints and issued two admonitions.

But while the committee can bar problem practitioners from testifying in court, it has no authority over psychologists’ licenses. Moreover, court systems elsewhere in the state haven’t set up such committees, partly out of fear that certification requirements might dissuade qualified professionals from taking appointments in regions where practitioners are difficult to find.

“They didn’t want to put things in the way of getting people to do this work,” said Jacqueline Silbermann, a former top New York Matrimonial Court judge who was involved in setting up the city’s certification committee and pushed courts outside the city to do the same. “The bottom line is they didn’t.”

That leaves OPD, whose investigators are tasked with responding to complaints not only about the state’s nearly 14,000 licensed psychologists, but nearly 50 other kinds of professionals, from dentists to massage therapists.

The agency, also known as the Office of the Professions, has come under fire before for its weak enforcement. A 2016 ProPublica investigation found it had not implemented criminal background checks for nurses that are routine in other states and often took years to administer discipline. Critics say it is also impeded by its unusual structure. As part of the Department of Education, OPD comes under the state’s Board of Regents, whose primary responsibility is to oversee the state’s vast public education system, and needs board approval to impose its stiffest sanctions.

But in the case of Family and Matrimonial Court psychologists, OPD’s oversight is not so much flawed as it is absent entirely.

Since 1994, according to a review by ProPublica, only one evaluator who is today approved for court work in New York City has been disciplined by the state, and it is unclear whether that action had anything to do with work he may have done for the courts. Since Family and Matrimonial Court evaluators elsewhere in the state aren’t certified, it’s impossible to know if any have been disciplined.

At a 2012 public hearing, Nancy Erickson, one of the attorneys who represented Frank, called OPD’s approach to overseeing psychologists one of the court system’s most troubling aspects.

“This refusal of OPD means that psychologists who are incompetent or even corrupt can continue to make money by doing custody evaluations that could end up misleading the courts and harming children and their families,” she said.

The tumultuous saga of the Frank family provides as good a window as any into court evaluators’ pivotal role in custody cases.

Anna Frank had filed for divorce in 2007 in Suffolk County Supreme Court, which handles matrimonial matters. She says her husband of 16 years, Michael Frank, was prone to screaming fits and physical aggression. Police records show she called local officers to complain of physical abuse several times as the marriage unraveled. Each parent had had the other arrested over domestic disputes. Their young son allegedly bore witness to their violent fights and later said he, too, suffered abuse at the hands of his father.

Michael Frank denies ever abusing either his wife or son, and insists the police reports were based on false allegations.

Anna Frank, though, did get a one-year order of protection against her husband and sought to dissolve the marriage. The Franks then came before Suffolk County Supreme Court Judge Andrew Crecca, with Anna seeking custody of her son, child support, and what she deemed her share of the family’s finances and Michael, the primary breadwinner, seeking to protect his assets and gain full custody of his son himself.

To sort through the competing accusations, the judge appointed Barbara Burkhard. Burkhard’s company, Child and Family Psychological Services, P.C., had provided therapeutic services to children since 1999 under a contract with Suffolk County’s Department of Social Services. (Burkhard did not respond to repeated emails and phone messages regarding this story.)

In the Frank case, Burkhard started out in 2008 functioning as what’s known as the Franks’ “parenting coordinator,” where she would oversee transfers of the child by his warring parents.

Then Judge Crecca took the somewhat unusual step of appointing Burkhard to complete a forensic psychological evaluation of the family. Normally these roles are kept separate in order to avoid preconceived notions on the part of the evaluator.

In January 2009, Burkhard was part of a chaotic dispute involving the Franks. Anna was supposed to drop her son off at Burkhard’s office so he could be picked up by Michael. But he refused to get out of her car. Burkhard tried to speak with the boy in the car. He was crying, yelling, telling her he did not want to go. He said his father had abused him, sexually and physically. When the boy’s father arrived, he, too, tried to talk to him in the car. In a terror, the boy got out of the car and darted across a busy street. With some coaxing from Burkhard’s staff, the boy came back and embraced his mother, insisting he go home with her. The police arrived and questioned everyone at the scene and the boy went home with his mother.

Based on what she saw, Burkhard recommended in a “preliminary report” that the boy be removed from his mother’s care immediately. She determined that what the boy needed most was more time with his father, outside of his mother’s sphere of influence. She recommended that Michael Frank receive temporary, sole custody while the divorce proceedings progressed. The judge followed her recommendation.

Anna Frank felt the actions were unfounded and unfair and that the court had essentially awarded sole custody to her husband based on a single episode. Burkhard never interviewed her, or her son, and now, in Anna Frank’s view, the psychologist was putting him in harm’s way.

And according to court records, the boy did suffer. His behavior and state of mind deteriorated after that. Usually a strong student, his grades began to decline. Rather than completing assignments, he’d scrawl all over them that he wanted to see his mother. He complained to teachers and social workers that his father had beaten him with a belt and locked him in a basement. His behavior grew increasingly erratic. He tried to run away. He broke windows. He urinated and defecated around the house. Social workers with Child Protective Services became a regular presence at the boy’s home, but their reports echoed Burkhard’s belief that Anna Frank was encouraging the boy to make false allegations of abuse.

Burkhard, in report after report, told the court the boy had become “enmeshed” with his mother, potentially succumbing to something akin to what’s known as “Parental Alienation Syndrome.” Burkhard’s reports suggested his mother may have convinced him to make up abuse allegations, in order to heighten her chances of winning custody.

Burkhard had the boy evaluated by more mental health professionals, and Judge Crecca decided the boy should be removed from both parents and live at a residential treatment center called Little Flower, in Wading River, about 30 minutes from where the Franks lived. He first came to the home in December 2009.

Over the next few years, Frank said she spent every penny she had battling her husband in court to get her son back. She lost her job as a school psychologist after Child Protective Services filed a neglect charge against her—deeming her responsible for her boy’s fear of his father. The school, she said, decided she couldn’t work with children with such a charge pending against her.

“They tried to strip me of everything I cared about,” Frank said, in a recent interview. “It was devastating.”

She said she supported herself by taking jobs in retail, making a meager $10 an hour after growing accustomed to an $80,000 annual salary.

She said Little Flower came to believe her son was telling the truth about his father all along and helped her regain custody.

In January 2010, Little Flower delivered a report to the court stating that the boy’s relationship with his father remained deeply strained and that his psychiatrist was concerned about the boy’s tales of abuse.

Anna Frank said staff from the home agreed to testify on her behalf, urging the judge to believe the boy. Again, Burkhard weighed in, recommending that if the boy were to leave Little Flower, he should move back in with his father. The home’s staff disagreed. They told the judge if the boy wasn’t going to move in with his mother, he’d be better off in foster care, Anna Frank said.

Ultimately, Michael Frank consented to a settlement that granted custody of the boy to his mother.

In an interview, Michael Frank said he never “abused his son or her, never, never, never.” He said his wife lied in a number of ways: The police reports were false, and Little Flower never took her side. And he claimed Anna lost her job not because of the neglect charges, but because she “stopped showing up to work.”

He said he was the “stable parent.” He said his wife had “brainwashed” their son. He repeatedly cited the fact that she is a trained psychologist, which, as he put it, “gave her plenty of knowledge on how to manipulate young kids. And that’s exactly what she did.”

But by the end, he said he had little choice but to “give up.” He said his son was clearly suffering and their relationship felt irrevocably fractured.

He said Burkhard had handled the case professionally.

“There was no rush to judgment,” he said.

Robert Gallo, one of several court-appointed attorneys who wound up representing Anna Frank over the five-year court battle, told ProPublica that the case, taken as a whole, reflects a dire need for outside oversight:

“I don’t want to sound like I am bashing Burkhard,” he said. “In that case, I thought she was wrong. But I’ve had others where I thought she was right. Take her out of the mix, and a different psychologist may have just looked at the same facts and got a whole different view. Which is why there should be some oversight and some real clear rules. I don’t think anybody is doing that today.”

Anna Frank sure tried.

During the custody battle, she was determined to hold Burkhard accountable for the assessment that helped lead to the loss of her child. She complained to OPD in April 2011.

The agency’s investigators are charged with ensuring “public protection” from “professional misconduct” across a variety of licensed professions. When it comes to psychologists, their complaint process is no different for practitioners doing evaluations for Family Court than for matters such as fraudulent billing or disclosing private medical information that might come up in private practices.

In cases in which OPD’s investigators substantiate complaints, the agency can issue administrative warnings for minor violations or—in more serious cases, which are reviewed by a violations committee—fine or censure licensees.

The committee can also refer cases to the state Board of Regents, which can refer the most egregious cases to the state attorney general for criminal prosecution. The board can also revoke a professional’s license.

Complaints against psychologists are relatively rare and discipline is even rarer. In 2015, for example, 88 complaints were filed against psychologists statewide and OPD issued one warning, two violation decisions, and four regent actions.

But to Erickson, Frank’s lawyer, OPD’s professed unwillingness to even look into complaints about the subset of practitioners acting as court evaluators is particularly problematic.

Erickson brought Frank’s case and several others like it to the state bar association’s Children and Family Law committee, then run by Merril Sobie, in April 2011. OPD seemed to have “a policy against investigating complaints that arise out of a court proceeding,” Erickson told the committee.

She pointed out that complainants had few good options other than OPD. The American Psychological Association, for example, publishes non-mandatory guidelines for forensic evaluations and looks into complaints about practitioners, but has little enforcement power. A “psychologist can simply drop his or her membership,” Erickson said.

Sobie was struck by what he described as OPD’s “hands-off” policy and decided the committee should pursue an explanation for it.

ProPublica obtained Sobie’s subsequent correspondence with OPD and its director, George Ding.

In his first letter, dated December 2011, Sobie described the problems his committee saw in OPD’s handling of complaints about evaluators.

He said complainants were often told to address their concerns to the judge presiding over their custody case, when the judge “would in all likelihood advise the litigant to file a complaint with OPD, the APA, or another office,” Sobie wrote. OPD also advised litigants to write to the court “to release their reports and relevant records” so that it could begin an investigation, a step Sobie said would risk stirring up the “hornet’s nest” by demanding the presence of their ex-spouse after a grueling custody battle.

“The Committee believes that this policy may place many children in danger; unfortunately, no matter how many valid complaints are filed against a court-ordered custody evaluator OPD will not investigate,” Sobie wrote. “An incompetent (or unethical) evaluator could continue to harm children.”

Sobie closed the letter by offering to help Ding develop a better approach. “We would happily assist you in improving procedures to better protect New York’s children,” he said.

Then he waited. And waited.

The New Year came and went. He sent the same letter again in late January 2012.

“We would appreciate the courtesy of a reply,” he wrote.

Still, nothing.

“I was not happy,” he said, recalling his dismay in an interview. “I didn’t think they were fulfilling their responsibility. I didn’t think that was the appropriate way to respond to the state bar association. And they wouldn’t put a goddamn thing in writing.”

The following month, in February 2012, Erickson brought another complaint filed with OPD to Sobie’s committee’s attention.

In this instance, the psychologist—a highly active forensic evaluator based in Brooklyn named N.G. Berrill—was not even appointed by the court. He was retained directly by a man who sought to halt his ex-wife’s unsupervised visits with their children.

According to the complaint, Berrill never contacted the mother and never attempted to question the statements the ex-husband made about himself. And yet he concluded the mother’s relationship with the kids had a potentially damaging effect. Berrill wrote a letter to the court recommending that her visitations with her children be supervised by state social workers from then on. The woman wound up losing custody.

Asked about the Family Court case by ProPublica, Berrill declined to respond to the allegations in the complaint and said in an email he did not want his work “discussed” in this article.

When an investigator with OPD wrote back to the complainant, the responses struck her as bizarre.

The letter said that since the woman herself was “not the parent who requested the report from Dr. Berrill” and since the office could not “interview the children or obtain copies of the necessary records without the consent of the father, this office could not adequately conduct an investigation.”

It also noted that Berrill disclosed the fact that he never spoke to the woman and “the court recognized that fact.”

“It is based on this that the decision was made to close your file.”

Sobie, more alarmed than ever, wrote to Ding again in May 2012.

“It has come to our attention OPD’s policies are perhaps more seriously flawed than we thought,” he said, laying out the details of the complaint.

“The response from OPD is frankly incomprehensible,” he said. “When we wrote our December 1, 2011 letter, we thought OPD took a ‘hands off’ policy only when the licensee was appointed by a court; the current example indicates that even a licensee who is not court appointed will not be investigated.”

Ding never wrote back.

After weeks of prodding, Sobie said he finally got a phone call from him.

“Essentially he said they can’t get involved if it’s a court ordered forensic because of confidentiality,” Sobie said. “I said ‘You are a state agency charged with enforcing professional discipline, I don’t see how you couldn’t do this. Don’t you have subpoena power? I find it very difficult to believe that a judge upon motion of a state agency who is charged with that responsibility would deny the motion. Did you ever do that?’ And of course, they never did that.”

Ding did not respond to questions about Sobie’s version of their back-and-forth.

In 2012, Sobie’s tenure as chair of the Children and Law Committee came to a close. The committee subsequently lost some of its interest in evaluators.

Erickson said she continued to hear from mothers who felt OPD had unjustly dismissed their complaints.

In one such case, a woman was told by an OPD investigator that it found no “evidence sufficient to support taking action against the subject” but then explained that “a request for the official documents and the evaluation was denied by Family Court.”

Once again, OPD had apparently closed an investigation without getting the records it would need to even start it.

That case was featured in Tippins’ law journal article, titled “Custody Evaluators: Where’s the Oversight?”

Tippins, a veteran attorney who has become the go-to expert in how to effectively challenge their work, has written extensively on the topic of oversight. In the article, he declared the OPD’s professed unwillingness or inability to investigate Family Court evaluators to be “as dangerous as it is derelict.”

“Evaluations are often flawed by bias, methodological deficiency, or both,” he wrote. “While many evaluators strive to present reliable expertise, incompetent or unethical evaluators are hardly strangers to the courts.”

He went on to explain that thorough cross examination of evaluators is rare and that cases are often settled on the basis of their work, making outside oversight an absolute imperative.

In his view, OPD provides nothing of the kind.

“If the subject were not so serious, this rigmarole would be worthy of Abbott & Costello,” he wrote.

In his response to Tippins, Ding asserted that his office “investigates every complaint which alleges conduct constituting professional misconduct.”

Ding said he could not supply evidence of the office taking action against a court-appointed evaluator because its data “is not maintained in a manner that is based on the information that you are seeking.”

Tippins’ article helped reinvigorate the bar association committee’s interest.

Ding accepted an invitation to their annual meeting last December.

Finally, Sobie and Erickson thought they might get some answers.

But Ding didn’t show up.

He apologized, saying he got the date wrong, and called in by phone, answering questions for an hour.

According to people who attended the meeting, he stuck to his claim that his office can’t investigate Family or Matrimonial Court cases because it can’t access essential records. Asked if he ever went to court to ask for records, he said he’d done so only once. Someone at the committee meeting noted that Ding could go to the state Attorney General’s office to seek a subpoena. According to those present, Ding said he assumed the attorney general had other priorities.

OPD disputes this version of events, but would not supply details as to what happened.

Ding did call the current head of the Children and Law Committee to complain that someone on the committee had described the meeting to ProPublica. He said it put him in “a very bad position” with the Attorney General’s office.

Sobie said the meeting left him certain of one thing:

“There is no professional oversight.”

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5 Trump Cabinet Members Who’ve Made False Statements to Congress

U.S. Attorney General Jeffrey Sessions
U.S. Attorney General Jeffrey Sessions


By Eric Umansky and Marcelo Rochabrun, ProPublica

As most of the world knows by now, Attorney General Jeff Sessions did not tell the truth when he was asked during his confirmation hearings about contacts with Russian officials.

But Sessions isn’t the only one. At least four other cabinet members made statements during their nomination hearings that are contradicted by actual facts: EPA Chief Scott Pruitt, Education Secretary Betsy DeVos, Treasury Secretary Steve Mnuchin, and Health and Human Services Secretary Tom Price.

The statements were all made under oath, except those of DeVos. It is a crime to “knowingly” lie in testimony to Congress, but it’s rarely prosecuted.

If you know of instances that we’ve missed, email us.

EPA Chief Scott Pruitt

The falsehood: Pruitt stated in testimony that he had never used a private email account to conduct business while he was Oklahoma’s attorney general.

The truth: Fox News 25 asked the state Attorney General’s office whether Pruitt had used a personal email. The answer was yes.

The Associated Press also received emails in response to a public records request showing Pruitt using a private account to conduct state business.

Pruitt’s response: None.

Education Secretary Betsy DeVos

The falsehood: DeVos said during her confirmation hearings that she has not been involved in her family’s foundation, which has given millions of dollars to group that oppose LGBT rights.

“You sit on the board,” Sen. Maggie Hassan, D-N.H., noted. DeVos responded, “I do not.”

The truth: As The Intercept has detailed, tax filings have listed DeVos as vice president of the foundation’s board for 17 years.

DeVos’ response: She said the foundation’s nearly two decades of filings were the result of a “clerical error.”

Treasury Secretary Steve Mnuchin

The falsehood: In written testimony, Mnuchin denied that his former bank had used so-called “robo-signing” to improperly foreclose on homeowners. “OneWest Bank did not ‘robo-sign’ documents,” Mnuchin wrote.

The truth: As the Columbus Dispatch detailed, OneWest Bank employees frequently signed documents in bulk without proper review, which is what robo-signing is. One employee testified that she typically signed about 750 foreclosure documents per week. The Dispatch noted that a judge stopped three OneWest Bank foreclosures “specifically based on inaccurate robo-signings.” Reuters also detailed the bank’s robo-signing back in 2011.

Mnuchin’s response: A spokesman offered the following statement after the Dispatch’s story: “The media is picking on a hard-working bank employee whose reputation has been maligned but whose work has been upheld by numerous courts all around the country in the face of scurrilous and false allegations.”

Health and Human Services Secretary Tom Price

The falsehood: During his confirmation hearings, Price insisted that the discount he got on a biotech stock was “available to every single individual that was an investor at the time.”

The truth: As The Wall Street Journal reported, fewer than 20 investors in the U.S. were offered the discount, including Price.

Price’s response: Price did not respond to the Journal’s story.

Attorney General Jeff Sessions

The falsehood: Sen. Al Franken, D-Minn., asked Sessions whether “anyone affiliated with the Trump campaign communicated with the Russian government in the course of this campaign.”

Session responded: Sen. Franken, I’m not aware of any of those activities. I have been called a surrogate at a time or two in that campaign and I did not have communications with the Russians.”

The truth: Yes, he did.

Sessions’ response: His office’s first statement: “I never met with any Russian officials to discuss issues of the campaign. I have no idea what this allegation is about. It is false.”

An anonymous White House official gave a New York Times reporter a different take, saying Sessions and the ambassador did talk and “had superficial comments about election-related news.”

Sessions’ spokeswoman later said Sessions often spoke with “foreign ambassadors as a senior member of the Armed Services Committee.” Washington Post reporters asked all 26 members of the committee if they spoke to the Russian ambassador in 2016. Sessions was the only one.

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Trump Plan: Deport to Mexico Immigrants Crossing Border Illegally, Regardless of Nationality


By Ginger Thompson and Marcelo Rochabrun, ProPublica

Leer en español.

Buried deep in the Trump administration’s plans to round up undocumented immigrants is a provision certain to enrage Mexico — new authority for federal agents to deport anyone caught crossing the southern border to Mexico, regardless of where they are from.

If present immigration trends continue, that could mean the United States would push hundreds of thousands of Guatemalans, Hondurans, Salvadorans, Brazilians, Ecuadorans, even Haitians into Mexico. Currently, such people are detained in the U.S. and allowed to request asylum.

President Trump wants them to do so from Mexico, communicating via videoconference calls with U.S. immigration officials from facilities that Mexico would presumably be forced to build.

“This would say if you want to make a claim for asylum or whatever we’ll hear your case but you are going to wait in Mexico,” a DHS official said. “Those are details that are being worked out both within the department and between the US government and the government of Mexico … there are elements that still need to be worked out in detail.

Kelly and Secretary of State Rex Tillerson will travel to Mexico later this week to meet with representatives of the Mexican government. It remains unclear if they will discuss this issue.

The new authority for immigration agents is among the dramatic, some would say untenable, tactics the Trump administration is preparing to deploy as it upends President Obama’s policies on illegal immigration.

A pair of memos signed by John Kelly, the Homeland Security secretary, and publicly released on Tuesday outline the plans for what present and former government officials say will be a massive roundup of undocumented immigrants. Near final drafts of the memos had leaked over the weekend and had been first reported by McClatchy.

Officials disclosed that two former Senate aides to Attorney General Jeff Sessions drafted the plan without input from career DHS policy staffers. The ideas aren’t new. Many of the approaches described in the memos come from a 1996 law that policy makers and law enforcement agents had disregarded as either unenforceable or absurd.

“Most of these provisions of law have been there for decades,” the DHS official said. “We are simply trying to execute what Congress has asked us to do.”

Among them was the Mexico part of the plan, for example, which calls for returning undocumented immigrants “to the foreign contiguous territory from which they arrived.” The memo goes on to point out how foisting the immigrants onto Mexico would benefit DHS’s budget, saying that it would, “save the Department’s detention and adjudication resources for other priority aliens.” 

However, former senior Mexican and American immigration officials said it could very well create new security problems along the border, as authorities in each country push unwanted migrants back and forth.

The American Immigration Lawyers Association said that the proposal would violate U.S. law and international treaty obligations. Mexico is as likely to embrace the plan as it did the notion of paying for a wall. “I would expect Mexico to respond with an emphatic ‘No,'” said Gustavo Mohar, a former senior Mexican immigration and national security policy official.

Whether viable or not, the Trump administration’s deportation plans mark a dramatic departure from decades of policy and practice. Current and former immigration policy officials say that while the details of how the administration intends to carry out the plans remain unclear — if not insurmountable — the administration’s overall message to enforcement agents across the country is clear: the limits have been lifted.

President Obama attempted to focus enforcement efforts on immigrants who had been convicted of serious crimes, and on those who were caught while or shortly after illegally entering the country. Still, his administration deported record numbers of immigrants, most of whom had only been accused of minor crimes and immigration violations.

The Trump administration says it, too, is focused on deporting criminals, but it has redefined crimes to include any activity that might bring a conviction, including entering the U.S. without permission. Effectively, that makes virtually everyone in the U.S. without a proper visa subject to roundup at their workplace or home.

“If you are present in the U.S. without being admitted or paroled or having overstayed your visa, the immigration laws of the U.S. subject you to removal,” the DHS official said. “Everyone who is in violation of the laws is theoretically subject to enforcement. The Department has limited resources and we will, to the extent that we can, focus on folks who have committed serious crimes.”

The only clear exception, according to the enforcement plan and the DHS briefing, is for immigrants who were illegally brought to the U.S. as children, known as Dreamers.

“Anyone who complained about Obama as the deporter-in-chief,” said David Martin, formerly DHS’s principal deputy general counsel, “is unfortunately going to get a taste of what it’s like when someone is really gung-ho.”

Greg Chen, the policy director at AILA, said the Trump plan would “effectively unleash a massive deportation force with extremely broad authority to use detention as the default mechanism for anyone suspected of violating immigration law.”

The question looming over the proposals is how many of them, with all their legal and logistical obstacles, will the president actually be able to carry out.

The memos, for example, authorize the Border Patrol to hire 5,000 new agents, even though the force has never been able to fill the slots it has already been allotted. Some 60 percent of applicants to the Border Patrol fail the required polygraph, and those who pass take 18 months to get sent out into the field.

The Trump plan calls for the expansion of a George W. Bush-era program, known as 287g, which allows DHS to deputize state and local police as immigration agents. It was touted after 9/11 as a critical “force-multiplier.” But by 2010, some of the country’s largest police departments were refusing to participate because they believed it would shatter the trust between their officers and the communities they were sworn to protect. Meanwhile, participating agencies, which foot the bill for the program, were suddenly saddled with new debts and hounded by accusations of racial profiling and other abuse, forcing the Obama administration to suspend expansion of the program.

Until now, the enforcement of summary deportation laws, known as “expedited removal,” have been limited to those apprehended within 14 days of illegally entering the country and within 100 miles of Canada or Mexico. The memos signed by Kelly would allow use of those laws anywhere in the country against anyone who entered illegally within the past two years.

Lucas Guttentag, a former DHS adviser and Stanford law professor, said this would “unleash chaos,” violate due process, and meet challenges in court, similar to those that scuttled the administration’s travel ban.

There would also be aggressive challenges, lawyers said, to plans that would allow immigration agents to deport unaccompanied minor children who crossed the border illegally, rather than uniting them with parents or other relatives in the U.S.

The reason for discussing unaccompanied minors is ” that they have been abandoned by their parents or legal guardians,” the DHS official said. If it is “determined that there is a parent or guardian in the U.S. that they can be handed over to, then DHS needs to take a hard look over whether that person is actually” an unaccompanied minor.

“There will be a renewed focus on ensuring that folks don’t abuse the system,” the DHS official added.

They also expect legal opposition to a proposal that would strip undocumented immigrants of existing privacy protections, allowing personal information such as asylum cases or immigration violations to be publicly disclosed.

“We want to ensure that our privacy policies are consistent with the law,” the DHS official said. “The Privacy Act applies by statute to citizens” and green card holders. “The President has asked us to align our laws with what congress has directed.”

“The Trump people have clearly bought into the model of harsh enforcement. They apparently think, ‘we’ll be tough, and a lot of people will leave on their own,'” said Martin, an immigration law professor at the University of Virginia. “They believe they’ll win in the court of public opinion. I’m not sure about that. A lot of Americans know hard-working undocumented immigrants. The kind of enforcement Trump’s people are talking about will visibly create many more sympathetic cases than unsympathetic ones.”

Some of the provisions explicitly acknowledge that it could take years before DHS has the manpower and money to pull off what the president has ordered. Immigration enforcement agents, however, have already begun filling the policy void by launching raids and deportations, including some that advocates worry are meant to test the limits. Meanwhile panic has taken hold in many immigrant communities.

“The level of fear is more than anything we’ve ever seen,” said Marielena Hincapie, executive director of the National Immigration Law Center. She said the plan’s sweep, “sent a chill to my bones,” because it threatens to do irreparable harm to millions of families. She added, “This all seems aimed at changing who we are as a nation.”

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Trump Once Told New York City His Net Worth Was Much Lower Than What He Said Publicly

Donald Trump

By Derek Kravitz, ProPublica

In the late spring of 2009, a Wall Street Journal reporter was trying to figure out how much now-President Donald Trump was worth. The never-shy real-estate developer passed along that his fortune was at least $5 billion, not counting the value of the Trump brand.

A month later, Trump’s accountant prepared a financial statement, which was later included in Trump’s bid to run a long-neglected municipal golf course in the Bronx. The document included a different estimate of Trump’s net worth: “in excess of $3 billion.”

ProPublica obtained the financial statement through an open-records request to New York City. (Check out the documents.)

Trump’s estimates of his worth have long varied wildly. He boasted during his Comedy Central Roast in 2011 that he was worth $7 billion. Last May, he said in a press release accompanying his federal ethics disclosure forms that he’s worth more than $10 billion.

What’s notable in this case is that the two estimates—one public and one private—were offered at nearly the same time.

“With Trump, following the Art of the Deal approach, you’re dealing with truthful hyperbole. So you don’t know where the truth is with both of these numbers,” said Steve Rosenthal, a senior fellow at the Urban Institute’s Urban-Brookings Tax Policy Center and a tax lawyer in Washington, D.C., who reviewed the documents for ProPublica.

The Trump Organization and the White House have not responded to ProPublica’s requests for comment.

There are reasons to be skeptical of even the numbers Trump gave to New York City. They are self-reported and aren’t looked at by auditors.

A few months after Trump offered those figures, Forbes magazine estimated he was worth $1 billion less than what he claimed to New York City officials.

Author and journalist Timothy O’Brien, who was sued by Trump after publishing much lower net-worth estimates in 2005, told ProPublica that he wouldn’t take Trump’s net-worth figures to New York City at face value.

“Just to begin with, this is about half of what he said publicly and he’s self-contradictory,” O’Brien said. “And, generally, he’s never fully disclosed his debts and he inflates the value of his assets.”

ProPublica also obtained another, older document from New York City in which Trump listed his net worth. The August 2001 document puts the figure at $2.4 billion. It was part of a Trump Organization bid for a contract to run skating rinks in New York’s Central Park. The company submitted a detailed questionnaire to the city, which claimed Trump had assets of more than $2.7 billion, liabilities of $325 million and $5 million in cash. Making a false statement on the city’s bid form can result in criminal charges.

In recommending that Trump be selected as the winning proposal, the city’s Department of Parks and Recreation selection committee said the “unquestioned financial capability of the Trump Corporation … was the decisive factor.”

The year before, Trump told Forbes magazine he was worth $5 billion.

The estimates Trump gave New York City are also lower than what he said in a sworn deposition in the lawsuit against O’Brien in December 2007. Trump said then he was worth more than $4 billion—”a very conservative number, in my opinion,” Trump offered.

Trump sued O’Brien for libel after the journalist wrote in his book, TrumpNation: The Art of Being The Donald, that Trump’s net worth was between $150 million and $250 million. The lawsuit was eventually dismissed.

During the 2007 deposition for the case, an attorney asked Trump if his “net worth goes up and down based upon your own feelings?” Trump said that it did.

“Yes, even my own feelings, as to where the world is, where the world is going, and that can change rapidly from day to day,” Trump responded. “Then you have a September 11th, and you don’t feel so good about yourself and you don’t feel so good about the world and you don’t feel so good about New York City. Then you have a year later, and the city is as hot as a pistol. Even months after that it was a different feeling. So yeah, even my own feelings affect my value to myself.”

Trump could clear up the confusion about his worth by releasing an audited assessment of his net worth. The president has so far declined to do so.

Al Shaw contributed to this report.

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Can The Democrats Be As Stubborn As Mitch McConnell?

Mitch McConnell
U.S. Senate Republican Majority Leader Mitch McConnell

By Alec MacGillis, ProPublica

In laying the groundwork recently for President Trump’s first nomination for the Supreme Court, Mitch McConnell, the Senate majority leader, had this to say: “What we hope would be that our Democratic friends will treat President Trump’s nominees in the same way that we treated Clinton and Obama.”

McConnell was referring to his party’s grudging acceptance, without resort to filibusters, of President Obama’s first-term nominees to the court, Sonia Sotomayor and Elena Kagan. What McConnell notably neglected to mention, of course, was the very different approach he himself had taken with the open seat Trump was now on the verge of filling: refusing even to hold a confirmation hearing last year for Obama’s nominee, Merrick B. Garland.

That McConnell could now blithely ask for a routine reception of a Trump nominee for the very seat that he managed to freeze unfilled for nearly a year galls Democrats to no end and demonstrates, more than ever, that it’s impossible to match McConnell for sheer chutzpah. But his comment also underscored the conundrum that the Democrats and their new leader, Chuck Schumer of New York, now confront in the Senate minority.

As McConnell showed in the first six years of President Obama’s tenure, the Senate’s rules and traditions allow a determined minority to block much of a president’s agenda — indeed, the Democrats’ 48 Senate seats are their only real leverage against President Trump. But McConnell’s unprecedented use of the filibuster — which forced Democrats to muster 60 votes to get anything done — and other obstructionist tactics drew loud rebukes from Democrats and traditionalists, who identified his intransigence as eroding longstanding norms and contributing greatly to voters’ anger over a dysfunctional Washington.

Can Democrats, who are more philosophically invested in showing that government can function, really bring themselves to replicate McConnell’s obstructionist methods? Would they really be willing to withhold cooperation even in areas where they and President Trump might find agreement, such as a major infrastructure package?

These questions are especially pressing for Senate Democrats because of the landscape they face next year, when 25 of their seats (including those of the two independents who caucus with them) are up for re-election, as opposed to only eight Republican ones. Those 25 include five states that Trump won handily: West Virginia, Missouri, Indiana, Montana and North Dakota. Doesn’t unified opposition to the president mean risking those seats and further diminishing their minority status?

A closer look at McConnell’s opposition during the Obama years suggests that the choices confronting Schumer and the Democrats may not be as stark as they seem. For one thing, the McConnell approach does not preclude going through the motions of working with the president of the opposite party. Recall that in the summer of 2009 McConnell allowed three Republicans, led by Chuck Grassley of Iowa, to spend months meeting with three Democratic counterparts on health care reform. The negotiations came to naught, allowing McConnell to claim that his party’s eventual monolithic vote against the Affordable Care Act came only after the Democrats’ refusal to move off their “far left” proposal.

The meetings also dragged out debate around the bill, helping sour the public on the legislation. As Robert F. Bennett, then a Utah senator and close McConnell ally, who died last year, told me of McConnell in early 2014: “He said, ‘Our strategy is to delay this sucker as long as we possibly can, and the longer we delay it the worse the president looks: Why can’t he get it done?'” He remembered the party leader’s promise to “delay it, delay it, delay it as long as we can.” The main lesson: “Every time something would come up, he would find a way to delay it.” Another lesson for Schumer and the Democrats might be that they could enter into negotiations over an infrastructure package, but insist on doing it mostly on their terms.

The record of Republican intransigence in the Obama years also suggests that voters pay far less attention to the legislative process than Washington insiders would like to believe. What McConnell recognized was that a president’s party is rewarded in midterm elections if he’s popular and getting things done, and punished if he’s not. Grassley, for instance, might’ve been tempted to help President Obama create a bipartisan health care bill since he hailed from a state, Iowa, that had embraced Obama in 2008. Instead, by withholding support, and even endorsing the “death panel” rhetoric around the bill, Grassley fueled the resistance to the “overreaching” president in 2010 and easily won re-election that year.

Similarly, Senate Democrats’ 2018 prospects in states that Trump won will depend more on whether the president is seen as succeeding — on how energized or demoralized the ends of the polarized electorate are — than on whether a given senator found an issue or two of common ground with him.

All of this still leaves the basic question of whether Democrats really have it in them to slow government to a crawl as much as McConnell did. Their willingness, goaded on by an inflamed Democratic base, to force postponements of committee votes on Trump nominees suggests they just might. The biggest test still awaits: whether, in protest of the treatment of Garland, to filibuster the confirmation of Trump’s Supreme Court nominee, Neil M. Gorsuch, which could lead to Republicans’ eliminating the filibuster for court confirmations once and for all.

The two sides of the debate facing the Democrats have been articulated by a veteran arbiter of Washington mores, Norman Ornstein of the American Enterprise Institute. Shortly after the election, he urged Schumer not to mimic the obstructionist methods of McConnell. He wrote: Democrats “will be tempted to adopt the Republican playbook from 2009, when Democrats controlled Washington: Vote in unison against everything, filibuster everything, even those things you like, to obstruct action and make it look ugly, allow damage to the country in the short term to reap political rewards in the next election.” He thought that would be a mistake, because it would limit the ability of Democrats to do anything positive.

But Ornstein told me that he is changing his thinking on this, after witnessing initial Trump moves such as the ban on travel from seven majority-Muslim countries and witnessing how reluctant Republicans have been to provide a check on him. He now recommends that Democrats stall President Trump’s agenda by repeatedly denying unanimous consent on the Senate floor.

This sounds similar to McConnell’s brand of obstruction, but Ornstein argues it’s not, because the opponent is different. “We don’t have a conventional president,” he said. “We’re seeing behavior that could lead us right down the path to martial law or authoritarian rule. These are dangerous times, and you have to think through your strategy in that context.” For Democrats, using “leverage to pull us back from the brink of something that shatters our fundamental system is now in order.”

Of course, McConnell had framed the context for his own obstructionism in dire terms, too, saying it was necessary to withhold bipartisan cooperation from Obama so that voters would realize just how radical his agenda really was. Now, with Trump in the White House and Republicans in control of Congress, McConnell is calling for a new era of comity. “The first thing we have to do is move beyond this us-and-them mentality that has so often characterized the last eight years,” he said on the Senate floor late last month. “We’re all in this together. We rise and fall as one.”

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Drug Distributors Penalized For Turning Blind Eye In Opioid Epidemic

opioid epidemic

By Charles Ornstein, ProPublica

As the toll of the opioid epidemic grows, scores of doctors have lost their licenses and some have gone to prison. Pharmacies are being sued and shuttered. Pharmaceutical manufacturers are under investigation and face new rules from regulators.

But penalties against companies that serve as middlemen between drug companies and pharmacies have been relatively scarce — until recently.

In the past month, two major drug distributors, also known as wholesalers, have formally agreed to pay millions of dollars to settle claims that they failed to report suspicious orders for controlled substances to the Drug Enforcement Administration, as required by law.

McKesson Corp., the largest such company in the U.S., last month agreed to pay a $150 million fine. And in late December, Cardinal Health reached a $44 million settlement with the federal government. That’s on top of another $20 million that Cardinal Health agreed this month to pay the state of West Virginia, which has been among the hardest hit by opioid overdoses. Other distributors have also agreed to pay smaller amounts to West Virginia within the past few months. AmerisourceBergen, for instance, will pay $16 million.

“Have the distributors gotten the message? I would hope so,” said Frank Younker, who worked at the DEA for 30 years and retired as a supervisor in its Cincinnati field office in 2014. “The distributors are important. They’re like the quarterback. They distribute the ball. … There’s plenty of blame to go around.”

The death toll from drug overdoses topped 52,000 in 2015, including 33,000 involving an opioid, according to the Centers for Disease Control and Prevention. Although the epidemic began with prescription pills, it is now being driven largely by heroin and various synthetic opioids.

The fines, some of which had been in the works for years, come as news organizations have raised questions about the significant role distributors have played by failing to stop or report pharmacies that appeared to be dispensing more pills than seemed reasonable.

The Charleston Gazette-Mail reported in December how drug companies shipped nearly 9 million hydrocodone pills over two years to one pharmacy in the town of Kermit, West Virginia, population 392. All told, the newspaper reported, drug wholesalers distributed 780 million pills of oxycodone and hydrocodone in the state over six years. “The unfettered shipments amount to 433 pain pills for every man, woman and child in West Virginia,” the story said.

The Washington Post reported in October how DEA leadership delayed and blocked enforcement actions as the overdose epidemic grew. Civil case filings against distributors, manufacturers, pharmacies and doctors dropped from 131 in fiscal 2011 to 40 in fiscal 2014, the Post reported. Immediate suspension orders (the toughest sanction the DEA has) fell from 65 to 9.

Later, the Post reported why that may have been: The drug industry had hired dozens of officials from the DEA, leading some current and former officials to ask whether the industry sought to hire away those who presented “the biggest headaches for them.”

Reports also have suggested that the DEA’s ability to go after problem distributors has been hobbled by watered down enforcement powers. The Los Angeles Times reported in July how Congress passed a bill supported by industry that allows companies accused of failing to report suspicious orders to delay enforcement proceedings against them if they submit a “corrective action plan.” It also made it harder for the agency to immediately suspend the licenses of those it oversees. President Barack Obama signed it into law in April 2016. Critics say it removed key tools at the DEA’s disposal.

In response to written questions for this story, the DEA said it has always held distributors “accountable for preventing the diversion of controlled and abused prescription drugs, including the opioid painkillers.”

Asked if its recent fines were too little, too late, the agency replied, “We don’t think so. We hope large fines such as this one [against McKesson] will get the attention of the companies’ leaders and stockholders and prompt them to be responsible corporate citizens, because people are dying as a result of the diversion of the opioid drugs they sell, and that can’t continue.”

In statements released when the distributors finalized their settlements, the companies said they have improved their performance in recent years. McKesson noted that the settlement covers reporting practices dating back to 2009. “Since 2013, McKesson has implemented significant changes to its monitoring and reporting processes,” the company said in a statement.

As part of the settlement, the DEA will suspend the registrations of four of McKesson’s distribution centers, on a staggered basis, blunting the effect of the punishment.

“Pharmaceutical distributors play an important role in identifying and combating prescription drug diversion and abuse,” John H. Hammergren, chairman and chief executive officer, said in the statement. “McKesson, as one of the nation’s largest distributors, takes our role seriously.”

The DEA had previously taken action against McKesson in 2008 for failing to report suspicious orders, a factor cited in the latest fine.

Cardinal Health’s fine was the last aspect of a 2012 settlement with the DEA, which included a two-year suspension of its Lakeland, Florida, distribution center. “These agreements allow us to move forward and continue to focus on working with all participants in addressing the epidemic of prescription drug abuse,” Craig Morford, its chief legal and compliance officer, said in a statement last month.

Federal prosecutors who worked on the McKesson case said that distributors play an important role in the overall system in which controlled substances get distributed. “What Congress envisioned is that there would be gatekeepers along the way in this closed system,” said Kurt Didier, an assistant U.S. attorney in Sacramento, in an interview. “It starts with the physician writing the prescription and the pharmacist filling the prescription. In between, you have entities like the distributors.

“In this overall scheme, a distributor is obligated to report to DEA prescriptions or orders that it views are suspicious,” Didier said.

The agencies regulating the industry have had their own problems. The Gazette-Mail reported that the West Virginia pharmacy board didn’t pay much attention to its own rules requiring that wholesalers report such orders. The board also had not examined reports from distributors regarding suspicious orders by pharmacies, nor had it shared those with law enforcement.

For its part, the DEA also has been faulted several times by the Government Accountability Office for, among other things, how it sets annual quotas for the amount of controlled substances that can be produced, the information and guidance it provides to the entities it regulates, and how it uses confidential informants.

The Healthcare Distribution Management Association, the trade group that represents the distributors, asked the DEA in 2010, 2011 and 2013 to clarify the companies’ roles and responsibilities, but it received no response.

Younker said he’s worried that the law Congress passed last year, allowing distributors to sign corrective action plans instead of being sanctioned, could hamstring the DEA. “That’s a very big blow. … Will you again see these large-scale fines? I personally doubt it.”

In its responses to ProPublica, the DEA said that it worked extensively with Sens. Orrin Hatch, R-Utah, and Sheldon Whitehouse, D-R.I., to develop the new law. “That law doesn’t change our role as regulators but it does impact the tools that we have to take action against distributors who aren’t meeting their responsibilities to prevent diversion.”

Chuck Rosenberg, the DEA’s acting administrator, told a Senate panel last year that his agency was working to improve itself and its interactions with those it regulates. “In many ways, I think we’re broken…,” he said. “I think we’ve been slow. I think we’ve been opaque. I think we haven’t responded to them.”

Jim Geldhof, who retired in January 2016 after more than 40 years with the DEA, most recently as a manager in the Detroit field office, said the recent fines are important, but he wonders if they will make any difference. “It’s going to be pretty hard to undo the damage that’s been done,” said Geldhof. “Do they get it? I don’t know. I don’t have a real lot of faith in industry frankly.”

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Teens Report Onslaught of Bullying During Divisive Election

A rainbow flag, the gay pride symbol, flapping in the wind. (Photo by Ludovic Bertron)


By A.C. Thompson, ProPublica

A new national survey of more than 50,000 teens charts a surge in abusive and hateful behavior among young people since the beginning of the presidential election campaign.

“Our biggest takeaway was that 70 percent of all respondents had witnessed bullying, hate speech or harassment since the 2016 election,” said Allison Turner, assistant press secretary for the Human Rights Campaign, a prominent LGBT advocacy group that conducted the survey. HRC polled a large, though not demographically representative, sample of the nation’s youth.

Race, sexual orientation, and immigration status were the factors most often linked to bullying and social marginalization, according to the survey, which documented the experiences of adolescents between the ages of 13 and 18, many of them gay, lesbian, or transgender; some 45 percent of the teens who participated identified as heterosexual.

Most of the teens surveyed said hateful incidents have been on the increase since the start of the highly contentious presidential campaign, which culminated with the inauguration of Donald Trump on Jan. 20.

In recent months, phone calls, texts and instant messages have been pouring into the Trevor Project, a crisis center for LGBT young people, said social worker David W. Bond, a vice president with organization. The day after the election, Bond and his colleagues were deluged with young people seeking help.

“The volume has continued to be higher than typical levels for November and December. This is very indicative of a higher level of emotional distress” for LGBT youth throughout the country, he said. “They’re clearly more distressed, so much that they feel the need to reach out for help.”

In the survey, high school students described bus rides bristling with homophobic and racist epithets and attacks on student groups like the Gay-Straight Alliance.

“The election results and the rhetoric going on in the media are enabling what would otherwise have been latent discrimination,” Bond said. His organization, he said, is now counseling youth confronted by a wave of more “obvious and observable discrimination that is seemingly more welcome in the public eye, unfortunately.”

After more than 18 months of political invective aimed at Mexico and Mexican immigrants, Latino young people are, unsurprisingly, rattled. The survey found Latinos were “20 percent more likely than other youth to have been personally bullied.”

An 18-year-old Californian reported a fear of speaking Spanish in public, while a young person in Illinois wrote, “My family and I go shopping and wash clothes at 2 am to avoid seeing and hearing people’s comments.”

To conduct the survey, HRC and allied organizations used social-media platforms, including Facebook, Snapchat, Twitter, and Instagram to engage young people during December and January. The technique, called “convenience sampling” by researchers, in this case was likely to draw in participants who have experienced abuse, or are supportive of LGBT equality.

Michael S. Pollard, a sociologist with the RAND Corporation who evaluated the survey and its methodology for ProPublica, said the study “was not designed to be representative of all US teens,” but its findings should be considered seriously because of the “very large group of adolescents” who took part.

The surveyors acknowledged the limitations of the data, writing that “although the sample’s demographics do not reflect the full racial and ethnic diversity of the nation’s youth, the large number of participants allows us to nonetheless learn first-hand about the experiences” of young people across the nation, particularly those who may feel targeted.

“We saw a lot of hateful speech during the election season,” said Turner of HRC. “We can see through our findings that this is affecting young people in a profound way.”

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For Trump’s Rich Appointees, Death May Be Certain But Taxes Aren’t


By Allan Sloan and Cezary Podkul, ProPublica

There are times when two seemingly unrelated tax policies intersect to create windfalls for fortunate people who are in the right place at the right time.

That is likely to be the case when it comes to calculating the tax benefits that will go to the billionaires and other very rich people joining the Trump administration. Among those who stand to benefit but haven’t been identified until now is Donald Trump’s son-in-law, Jared Kushner, even though he’s not taking a formal government job.

No, this isn’t going to be another screed on the tax code provision that provides a temporary tax break to high-net-worth people who take government positions and have to dispose of some of their holdings to avoid conflicts.

Rather, we want to show you how combining this tax break with repeal of the estate tax — a cherished Republican goal that could be achieved this year – can turn a temporary tax benefit into permanent tax avoidance, enriching the appointees and their heirs.

We’re dealing with substantial money here: at a minimum, tens of millions of deferred capital gains taxes; at a maximum, hundreds of millions. We can’t tell until we analyze filings that appointees haven’t yet made with the Office of Government Ethics. One wild card is their holdings outside of the publicly traded companies with which some of them are associated, because we don’t know what they would have to sell, how much of a gain they would have and how much in capital gains taxes they could defer. Rex Tillerson, for example, owns $28 million to $100 million in land and securities other than ExxonMobil, according to a Dec. 31 report he filed with the ethics office that listed more than 400 holdings.

Other very-well-off Trump appointees whose pending jobs will almost surely make them tax deferral candidates include Wilbur Ross, who made vast sums restructuring bankrupt steel companies; Gary Cohn, former No. 2 executive at Goldman Sachs; Steven Mnuchin, who made a huge profit buying a dead savings institution from the FDIC, reviving it and selling it to CIT, and also has extensive private holdings; Andy Puzder, chief executive of privately held CKE, a big restaurant chain; Linda McMahon, former chief executive of World Wrestling Entertainment; and Betsy DeVos, a scion of a rich family who married into the family of the co-founder of the Amway multilevel marketing firm, now known as Quixtar.

Kushner, who succeeded his father as head of the Kushner Companies, a former New Jersey real estate empire that’s now based in Manhattan, has said he’ll sell assets that pose a conflict with his new role as senior adviser to the president. So we asked his attorney, Jamie Gorelick of WilmerHale, whether Kushner would seek a “certificate of divestiture” from the government to allow him to defer taxes on gains generated by his sales. Her emailed answer: “Mr. Kushner will need a certificate of divestiture for certain divestitures that are required for his compliance with the ethics rules.”

Okay. Now, let’s back up a bit, and get into some of the details.

Under Section 1043 of the tax code, which was enacted in 1989, eligible federal appointees can defer capital gains taxes on securities and other assets that they’re required to sell to meet conflict-of-interest guidelines.

The idea was to avoid imposing large tax costs on people who want to join the government, usually for a lot less money than they’re used to making. As long as the appointees reinvest the sale proceeds in securities approved by the Office of Government Ethics, there’s no tax due on the gains until the replacement securities are sold.

If that happens, the appointees have to pay capital gains tax on the difference between the sale proceeds and the “cost basis”- the cost for tax purposes – of the assets they sold to avoid conflicts. If the replacement securities aren’t sold, the gains tax never comes due.

Now, watch. Under current estate tax law, the cost basis of assets owned by someone who dies is “stepped up” to the assets’ value the day of the person’s death, with no tax due on the gain.

However, people who have gotten substantial Section 1043 tax deferrals are likely to have estates that exceed the current estate tax threshold of about $5.5 million for an individual and $11 million for a married couple. So even if the appointee holds the replacement assets until he or she dies and avoids having to pay capital gains tax, under current rules those assets will be part of the appointee’s estate. The estate will pay up to a 40 percent tax on the assets, leaving less for inheritors.

“Our estate tax is a backstop to our income tax,” says Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. “It imposes taxes at death on income from property that previously escaped taxation, like capital gains that have never been realized.”

Repeal of the estate tax — which proponents routinely denigrate as a “death tax” even though only about one estate in 500 is big enough to be taxable — is an integral part of House Republicans’ proposed tax reform package.

Signs are that they intend to push hard to get the tax repealed quickly. “Our pro-growth tax reform blueprint includes fully repealing the death tax in order to protect family-owned businesses,” a spokeswoman for the Republican majority on the tax-writing House Ways and Means Committee emailed us.

Its committee chairman, Texas Republican Kevin Brady, also weighed in.

“I look forward to working with President-elect Trump on tax reform that permanently buries the death tax once and for all,” Brady said. “For too long, this double and triple taxation has threatened family-owned businesses — including women- and minority-owned businesses – from being passed down to their children and grandchildren.”

Rep. Richard E. Neal (Mass.) the top Democrat on Ways and Means, emailed us that “the estate tax is important not only because of the revenue it raises, but also for its role in making the tax code more fair. Dynastic wealth transfer and a landed aristocracy were not what our forefathers envisioned as pillars of our society.”

But Republicans are in power today, and the Democrats aren’t.

The last time a Republican Congress and a Republican president united in a repeal effort – in 2001, under George W. Bush – the estate tax was killed. Sort of. Rather than wiping out the tax all at once, for arcane budget reasons the Republicans merely raised the threshold and lowered the tax rate through 2009. The tax disappeared entirely in 2010, for that year only. It was scheduled to spring back to its 2001 form in 2011, which the 2001 Republicans had thought would never be allowed to happen.

But by then, Barack Obama had become president, the political dynamic had changed and the estate tax was resurrected in a compromise of sorts. It had a much higher threshold and a much lower rate than it did in 2001. It’s projected to bring in about $24 billion this fiscal year, according to Congress’ Joint Committee on Taxation.

It’s not clear exactly how estate tax repeal would work now. The Ways and Means Republican spokeswoman said repeal specifics are not available. “As we transform the blueprint into legislation, we are continuing to hear from the incoming administration about their ideas,” she said.

We contacted Democratic and Republican leaders in the House and Senate to see what they think of this, but could not get a response ahead of today’s inauguration. Trump’s spokespeople also did not respond.

Trump campaigned on a vague promise to tax unrealized gains above $10 million as part of estate tax repeal. That would have had the effect of substituting capital gains taxes for estate taxes on a handful of very large estates. But it’s uncertain how Trump’s proposal would work, or whether he will push legislative provisions that could cost his family and appointees serious money.

Hence our conclusion that a combination of Section 1043 and estate tax repeal would shower huge benefits on Trump appointees, including Kushner and his wife, Trump’s daughter Ivanka.

Under current law, the tax basis of assets is marked up, tax-free, to their value on the day the person who bequeathed the assets died. The 2010 estate tax repeal largely eliminated this provision, which meant higher capital gains taxes if heirs sold the assets.

However, even if the tax-free step-up in basis disappears as part of estate tax repeal, there are numerous ways that inheritors would be able to reap the benefits of the 1043 deferral for years or decades.

“A tax deferred is a tax saved,” tax expert Robert Willens says. And that’s the bottom line.

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