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FAA Under Pressure To Allow Commercial Drones

By Daniel Rothberg, Tribune Washington Bureau

WASHINGTON — It seems like a perfect time to get into the drone business.

With easy access to technology and patchy regulation, small commercial drones already have been used to film box-office hits and market expensive real estate.

Internet retailer Amazon is testing its sixth generation of an unmanned aircraft system that could one day whisk packages to customers within hours. With big corporations like FedEx and Domino’s Pizza flirting with the technology, law firms, trade groups and insurers are lining up to capitalize on an expected economic gold mine.

There’s only one catch: Commercial drones are illegal.

In a 2007 policy statement, the Federal Aviation Administration essentially declared a ban on operating drones for commercial purposes. The agency doubled down on that position in early April, appealing an administrative order that tossed out the legal foundation for its policy. The ruling came after a commercial drone user challenged an FAA fine levied against him.

The ongoing case and mounting pressure to tap into the potentially lucrative industry puts the FAA in a tough spot. The regulatory body, responsible for keeping U.S. airspace safe, plans to propose a rule for commercial drones by the end of the year. But regulations aren’t likely to be final until 2015 at the earliest, leaving some wondering whether the FAA can catch up to an industry already half past go.

“I don’t think there’s any question that market pressure is intense and the FAA is struggling on the regulatory side to keep up,” said James H. Burnley, a former U.S. transportation secretary and a Washington attorney.

Much of the commercial interest is focused on small drones — those that weigh less than 55 pounds, fly less than 400 feet high and often remain within the operator’s line of sight. Many look no different from toy helicopters.

But from a regulatory standpoint, integrating these drones into the national airspace is a complicated challenge that must reconcile changing technology with safety concerns, including how to keep the drones from crashing into manned aircraft or causing damage or injury as they land.

“We really want to get it right the first time,” said FAA spokesman Les Dorr.

The FAA has certified more than 600 public-sector entities to fly drones, mostly law enforcement agencies and universities. It announced last month that the first of six national sites for commercial drone testing was ready in North Dakota.

But to date, the agency says it has made only one exception to its commercial ban, allowing oil company ConocoPhillips to survey marine mammals and ice in the Arctic.

Commercial drone advocates say the agency is taking too long. Thirty-three industry groups, including the National Ski Areas Association and National Sunflower Association, are urging FAA Administrator Michael Huerta to expedite the approval process, citing a nearly four-year delay on its small-drone rule.

“The current regulatory void has left American entrepreneurs and others either sitting on the sidelines or operating in the absence of appropriate safety guidelines,” they wrote in an April 8 letter.

Some businesses aren’t waiting for the FAA rules to be completed. A Minnesota-based beer company made an online commercial that featured a drone transporting its “frosty winter lager” to some expectant ice fishermen.

Weeks later, a Detroit flower company announced plans to drone-deliver roses on Valentine’s Day. In March, the Washington Nationals sent up a drone to catch the baseball team’s spring training on tape.

Several large law firms have launched drone practices, and there’s even a fledgling insurance market. Nationwide Insurance’s agricultural subsidiary is offering liability coverage to a handful of customers who use small drones in their farm operations, an underwriting director confirmed.

Amazon told shareholders in April that it’s continuing to test the “octocopter” that it unveiled in December, saying it will be ready to roll out drone delivery service as soon as the FAA gives its OK.

Although even unauthorized testing of commercial drones is prohibited under the FAA policy and the agency regularly notifies operators when it discovers a violation, weak enforcement has often left businesses flying in an air of uncertainty. For many, the crime outweighs the punishment.

“If you wait until the FAA passes its rule, you will be too far behind,” said Jerry LeMieux, a retired Air Force colonel who serves as president of the Unmanned Vehicle University, an Arizona-based academy for unmanned systems engineering. “The time to get in is now.”

To date, the FAA has issued only one fine for an unauthorized commercial drone flight. It wrote a letter ordering the Minnesota beer company and the Detroit florist to cease their activities. But the agency learns about most violations only from reports in the media, tips from rival businesses or when companies film their drone flights and post them on YouTube.

“There is a perception, largely correct, that (operators) are unlikely to get caught, and if they do get caught, there aren’t going to be significant consequences,” said Timothy Reuter, a drone enthusiast in Washington who created a network of local groups to highlight the benefits of civilian use.

Hollywood has an especially rich history of using unmanned aircraft. In 1995, the company Flying-Cam won an Oscar for developing an unmanned helicopter system equipped with a camera. Before the FAA ban, Flying-Cam shot more than 80 films in the U.S., according to its director of operations, Haik Gazarian.

Now it shoots advertisements and films (recent titles include Skyfall and The Hangover) on sets overseas, where commercial drone flight is often permitted. Likewise, Domino’s tested its drone in Britain.

AFP Photo/Saul Loeb

George W. Bush Wants Brother Jeb To Run, Says He’d Be ‘Great President’

Daniel Rothberg, Tribune Washington Bureau

WASHINGTON — President George W. Bush said his younger brother Jeb Bush would make a “great president,” as speculation builds that the Republican former governor of Florida might mount a run for the White House in 2016.

Jeb Bush, a favorite of the Republican establishment, has maintained a high public profile in recent weeks, appearing at GOP fundraising events and weighing in on debates over immigration and education policy. He has publicly backed at least two GOP candidates in 2014 races, including his recent endorsement of California gubernatorial candidate Neel Kashkari.

“I hope Jeb runs,” the former president said during an interview on CNN. “I think he would be a great president. I have no clue what’s on his mind, and we will talk when he’s ready.”

In a GOP presidential primary, a new poll shows Jeb Bush and Sen. Rand Paulof Kentucky at the front of the pack, but by an extremely narrow margin. According to a Washington Post-ABC News poll released this week, 14 percent of Republicans and GOP-leaning independents each support Bush and Paul, while 13 percent back former Arkansas Gov. Mike Huckabee, and 11 percent line up behind Wisconsin Rep. Paul D. Ryan.

But the former president said his brother, who has said he won’t make a decision until after the November election, is unconcerned with polling.

“He’s checking his core, and as he said publicly, ‘I’m thinking about my family,’” George W. Bush said. “And of course, he knows full well what a run for the presidency can do on family.”

The Bush family is split about the possibility of a third Bush occupying the Oval Office. In appearance on the “Today” show last year, former first lady Barbara Bush said, “We’ve had enough Bushes” and that her son Jeb should not run, though she believes he is the most qualified.

In any case, George W. Bush, who ended his term as one of the most unpopular presidents in modern history, said he was ready and willing to offer his counsel to his brother.

“Hey, Jeb, if you need some advice, give me a call,” he said during the Thursday interview.

Photo via Wikimedia Commons

Health Official Says 7.5 Million Americans Now Signed Up For Obamacare

By Daniel Rothberg, Tribune Washington Bureau

WASHINGTON — Enrollment in health care exchanges created under Obamacare has risen to 7.5 million and is expected to continue increasing, Health and Human Services Secretary Kathleen Sebelius told a Senate committee Thursday.

Sebelius’ announcement marks a 400,000-person uptick since Obama announced last week that 7.1 million Americans had signed up for coverage through marketplaces on the final day of open enrollment. The administration’s original tally includes Americans who, because of issues signing up, received an extension until April 15.

“During these past six months, millions have obtained the security and peace of mind of affordable health coverage,” Sebelius said during a Senate Finance Committee hearing about her department’s budget for 2015. “Many of the people I’ve met have told me that they’ve been able to get covered for the first time in years. And some have insurance for the first time in their entire lives.”

The Congressional Budget Office originally predicted that seven million Americans would sign up through the health law but lowered its estimate by one million following the botched rollout of HealthCare.gov. Passing the seven million mark last week was already an achievement for an administration that faced a new flurry of attacks after the site’s disastrous launch.

But Obamacare remains a politically sensitive issue, especially as Democrats hope to keep control of the Senate by winning elections in moderate states where many Republican candidates are vigorously campaigning against the law. Support for the law remains divided on partisan lines, with 73 percent of Democrats and only 10 percent of Republicans in favor of the law, according to a Pew Research Center/USA Today poll released Thursday.

The survey, conducted April 3-6, after the April 1 open enrollment deadline, also shows that nearly half of independents believe the law will affect the country negatively. When asked how a candidate’s stance on the law would affect their vote, 60 percent of those opposed to the law said it would be a very important factor, compared to 48 percent who support it.

Sebelius’ announcement met pushback from Sen. Orrin Hatch (R-UT), who said questions remain, including whether enrollees will pay their premiums and how many included in the tally already had health coverage before the law.

“So far, it appears that the administration is hoping that the public will ignore these important questions and only focus on the number of claimed enrollees,” Hatch said.

Sen. Ron Wyden (D-OR), who chairs the committee, began his opening statement by highlighting “overlooked” health care improvements since passage of the law. He also cited a recent Gallup poll that shows the rate of uninsured Americans hitting its lowest point since 2008.

“There’s plenty of debate about which Americans enrolled in the Affordable Care Act and when, but the independent data shows that the number of uninsured is significantly lower than it has been in years,” Wyden said.

During the hearing, Sebelius noted that three million Americans also enrolled for Medicaid coverage between October and the end of February.

“Now we know that if more states move forward on Medicaid expansion, more uninsured Americans will be able to get covered,” she said.

AFP Photo/Joe Raedle

Reid Will Refund Campaign For Purchases From Granddaughter’s Business

By Daniel Rothberg, Tribune Washington Bureau

WASHINGTON — Senate Majority Leader Harry Reid, D-Nev., plans to reimburse his campaign more than $16,000 for purchasing holiday gifts from his granddaughter’s jewelry business.

The Federal Election Commission sent Reid’s campaign a letter last week asking it to provide more information about payments listed as “holiday gifts” on its 2013 year-end campaign finance report. The filing lists two payments in October 2013 to “Ryan Elisabeth” totaling $16,786.93.

A Reid aide confirmed that “Ryan Elisabeth” is the name of a company owned by his granddaughter Ryan Elisabeth Reid. The aide described the gifts as trinkets — coasters, picture frames, jewelry — valued at about $50 each. The aide said they were distributed to a large number of supporters and staff members.

According to Reid’s campaign, the spending is in compliance with FEC regulations. Federal election rules permit campaigns to distribute gifts of “nominal value.” Still, Reid said in a statement Tuesday that he would personally refund the campaign for the expenditures.

“I thought it would be nice to give supporters and staff thank-you gifts that had a personal connection and a Searchlight connection, but I have decided to reimburse the campaign for the amount of the expenditure,” he said. Reid was born in Searchlight, Nev.

In his news conference Wednesday, Reid reiterated that his campaign “complied with all the rules” but suggested that he wanted to avoid any appearance of impropriety.

Jon Ralston, a Nevada-based journalist, first reported the expenditures.

During a review of the campaign’s disclosure form, the FEC asked Reid’s campaign, Friends for Harry Reid, to clarify expenses described as “holiday gifts.” Under FEC regulations, terms used to describe expenditures must clearly explain the purpose of the spending.

FEC rules prohibit converting campaign funds to personal use, according to Paul S. Ryan, senior counsel at the Campaign Legal Center. But he said candidates are permitted to buy gifts from family members if they are purchased at fair-market value.

The Republican National Committee criticized the purchases, attacking the majority leader for improperly handling campaign funds.

“It’s pretty brazen for Senator Harry Reid to funnel nearly $17,000 in campaign funds to his granddaughter for ‘holiday gifts,'” Jahan Wilcox, a RNC spokesman said, who noted that Reid made similar campaign reimbursements in 2006. “One of these days Reid will learn that Nevadans don’t appreciate him using campaign money as his personal slush fund.”

AFP Photo/Alex Wong

Homeland Security Charges 14 With Operating Child Pornography Website

By Daniel Rothberg, Tribune Washington Bureau

WASHINGTON — Fourteen men have been charged with operating a child pornography website with 27,000 members and more than 2,000 videos, federal law enforcement officials announced Tuesday.

The investigation, one of the largest online child exploitation probes ever launched by U.S. Immigration and Customs Enforcement, found 251 victims in 39 states and five foreign countries.

In most cases, young boys were targeted online by the men and tricked into creating sexually explicit videos of themselves, according to a statement from the Department of Homeland Security.

“Operation Round Table,” the name given to the investigation, started with the June 2013 arrest of the network’s alleged creator, Jonathan Johnson, 26. According to the statement, he acknowledged enticing young boys by assuming female personas on social networks and pressing other men to follow suit.

Most victims were male between 13 to 15 years old, officials said. Two victims were 3 years old or younger.

In a news conference Tuesday, Secretary of Homeland Security Jeh Johnson said the alleged perpetrators targeted “the most innocent, most vulnerable members of our society with no regard for the immediate or lasting harm they cause to the victims and their families.”

Led by ICE and the U.S. Postal Inspection Service, the investigation identified victims in Britain, Canada, New Zealand, Australia and Belgium.

From June 2012 until June 2013, the child pornography site operated on Tor, an underground network that directs Internet traffic through relays to ensure user anonymity.

As authorities pour through more than 40 terabytes of data, they say more arrests are likely. Officials also cited more than 300 open investigations into possible website subscribers.

In addition to Johnson, authorities have charged 10 men in the Eastern U.S. District of Louisiana believed to be largely responsible for running the scheme and producing pornographic materials.
Three men were also charged in Colorado, New York and Wisconsin.

While ICE Deputy Director Daniel Ragsdale said arrests play a vital role, he also said law enforcement must employ other strategies to curb an increase in child exploitation.

“Our agency is seeing a growing trend where children are being enticed, tricked and coerced online by adults to produce sexually explicit material of themselves,” Ragsdale said in a statement. “While we will continue to prioritize the arrest of child predators, we cannot arrest our way out of this problem: Education is the key to prevention.”

Photo: Fingers SFV via Flickr

With Florida Race Looming, Top Republican Shares Digital Strategy

By Daniel Rothberg, Tribune Washington Bureau

WASHINGTON — The chairman of the Republican Party’s congressional campaign wing said Tuesday that a hotly contested special election in Florida is serving as a laboratory for testing messages and tactics for the 2014 midterm races.

During a news conference, Rep. Greg Walden, R-Ore., said the National Republican Congressional Committee is working to improve the breadth and depth of its voter database, and that the committee will keep tabs on how its digital strategy plays out in Florida.

The NRCC has made significant investments to bridge what Walden said is a gap between the digital campaign capabilities of Democratic and Republican operations.

“We realize this is not brain surgery or rocket (science),” Walden said. “It’s computer science. And so we can get there, and we are getting there.”

With eight full-time staffers, Walden said the NRCC had the largest data team in Republican politics at the start of the year and is making “progress” in bolstering its online operation.

Walden also pointed to a shift toward more sophisticated uses of data that will allow campaigns to hone tactics and voter contact. Talking about the party’s data stores, Walden said Republicans have long had “a huge water tank on the hill” but that it was never fully exploited.

He said that by sharing more detailed information with campaigns, such as demographic data, those operations are able to view the race through a wider lens. Campaigns with the improved data can, for example, use it to predict different turnout scenarios, rather than focusing solely on the overall number of votes they need, he said.

“They can then manipulate the numbers to say, ‘OK, what if I only get X of this? What does that mean in terms of Y of that,'” he said.

Although campaigns will focus primarily on local issues within each district, Walden said, the national context can’t be ignored, including President Barack Obama’s relatively low approval rating and what he said was Obamacare’s unpopularity. Though it won’t be the only issue in 2014, Walden said, Obamacare will be an “underlying issue” in every race.

Throughout his remarks, Walden drew comparisons with the 2006 midterm election in which Democrats took control of the House of Representatives amid growing discontent with President George W. Bush and disapproval of the war in Iraq.

In 2013, Walden said, the Democratic Congressional Campaign Committee’s fundraising outdid the NRCC’s effort by $15 million, a gap he attributed to the DCCC’s robust online presence and several events featuring the president, always a guaranteed fundraising boon.

But Walden defended the NRCC’s fundraising record, touting 2013 as a strong year, with contributions up 11 percent from 2011 and an increase in small and individual donors. The committee came in under budget and over revenue, he said.

Photo: The Rachel Maddow Show via Flickr

U.S. To Revamp Nutrition Labels, Emphasizing Calorie Counts And Added Sugars

By Daniel Rothberg, Tribune Washington Bureau

WASHINGTON — The Obama administration on Thursday will propose the first major revamp of nutrition labels in more than two decades, an update that would emphasize calorie information, include the amount of added sugars and revise serving sizes to reflect how people really consume food.

The revision is aimed, in part, at addressing serious public health issues, including obesity and other chronic diseases. Administration officials believe the new labels could lead consumers to make more healthful food choices and encourage the food industry to reformulate some products, particularly those with high amounts of added sugar.

First lady Michelle Obama, who has made better nutrition a focus of her “Let’s Move!” initiative to battle childhood obesity, is slated to announce the Food and Drug Administration proposal at the White House with top administration officials.

“Our guiding principle here is very simple: that you as a parent and a consumer should be able to walk into your local grocery store, pick up an item off the shelf, and be able to tell whether it’s good for your family,” she said in a statement.

Thursday’s announcement will begin a 90-day period for public comments on the proposal. The administration plans to release a final rule within the next year, although there is no deadline.

Given the costs tied to revising the labels, found on about 700,000 products, the FDA is proposing an implementation period of two years after the rule is issued, an administration official said.

The Grocery Manufacturers Association, which represents more than 300 companies, said “the time is right for an update,” called the proposal “a thoughtful review” and promised to work with the FDA. But the organization also said: “It is critical that any changes are based on the most current and reliable science. Equally as important is ensuring that any changes ultimately serve to inform, and not confuse, consumers.”

On the proposed label, the calorie count would appear in larger, bold typeface. The updated label would also include a separate entry in the sugar section to differentiate between added sugar and natural sugar.

Administration officials said that would help consumers comply with dietary guidelines recommending Americans decrease added sugar intake. But Marion Nestle, a professor of nutrition at New York University, predicted that the move could prompt push-back from food companies, which have a powerful Washington lobbying operation.

“The food industry is really eager for people to not know how much sugar there is,” she said.

Still, some public health advocates said that the added sugar category doesn’t go far enough. The FDA should also display the amount of sugar as a percentage of recommended daily value, argued Michael F. Jacobson, the executive director of the Center for Science in the Public Interest. “So many people consume far too much,” he said.

Jacobson noted that the American Heart Association recommends women consume no more than 25 grams of added sugar per day and men no more than 35 grams per day, while one can of soda contains about 40 grams.

To ensure compliance with the proposed requirement, companies would have to keep records of added sugar for FDA inspection.

The FDA proposal would also revise serving sizes to reflect the most recent data on consumer habits. The serving size for soda is currently 8 ounces, but consumers often drink soda in 12-ounce cans or even larger bottles.

The current rules allow manufacturers to use a larger serving size, as some soda makers do, but the proposed rule would require the serving size to be at least 12 ounces.

With the update, the serving sizes set in 1994 would increase for some products, such as ice cream, while sizes for other products, such as yogurt, would decrease.

“The serving sizes for many foods are a joke now — the half-cup of ice cream, 2-ounce muffins and bagels, which haven’t been seen in decades,” said Jacobson, praising proposed revisions.

For certain items that are typically finished all at once, such as a 20-ounce soda bottle, the updated label will also require manufacturers to display nutrition information for the entire package.

If a food package is two times the serving size and could be consumed all at once, such as a 24-ounce soda bottle, the FDA would require a dual-column label with a breakdown by both serving size and container size.

The administration officials, who discussed the proposal on the condition that they not be identified, said an economic analysis indicated the new label could bring between $20 billion and $30 billion in benefits at a cost of about $2 billion over 20 years, but did not provide details of the study.

The food industry, which would be responsible for updating the labels on its products, would bear much of the cost.

AFP Photo/Mario Tama

Holder Urges Congress To Adopt Standard For Cyber Attack Notification

By Daniel Rothberg, Tribune Washington Bureau

WASHINGTON — After a spate of large-scale cyberattacks on retailers, Attorney General Eric H. Holder Jr. urged Congress to adopt a national standard for notifying consumers of a security breach.
Holder said creating such a law would bolster the Justice Department’s ability to combat crimes and hold organizations accountable for failing to protect private information.

The announcement Monday comes just weeks after lawmakers called for tighter notification standards during congressional hearings into recent commercial cyberattacks, including high-profile cases at Target Corp. and Neiman Marcus. Several legislators, including Senators Patrick Leahy (D-VT) and Dianne Feinstein (D-CA), have recently introduced bills on the issue.

During the holiday season, an attack on Target’s systems compromised the security of 40 million payment card numbers as well as the names, addresses and phone numbers of as many as 70 million customers. The Justice Department and Secret Service are investigating the incident.

Not long after the Target attack, executives at upscale retailer Neiman Marcus discovered malware on its system had exposed as many as 1.1 million payment cards.

Holder said a notification standard would benefit consumers and law enforcement.

“This would empower the American people to protect themselves if they are at risk of identity theft,” he said in a video statement. “It would enable law enforcement to better investigate these crimes — and hold compromised entities accountable when they fail to keep sensitive information safe.”

Exceptions to the notification standard would be made for harmless security breaches, Holder said.

Forty-six states and the District of Columbia have laws that dictate standards for disclosing a breach. Some state attorneys general and consumer advocates have voiced concerns that a federal law might preempt stricter state laws.

Illinois Attorney General Lisa Madigan warned of just that in testimony before a House subcommittee. Madigan said her constituents do not want the state’s law pre-empted but instead are “asking why companies are not doing more to protect their personal and financial information and prevent these breaches from occurring in the first place.”

Consumer advocate Ed Mierzwinski said in an interview that he’s encouraged that Holder is engaged on the issue but cautions against passing a law that is weaker than the strongest state law. Another concern, he said, is that a federal law could prevent states from acting on future data security legislation.

But the National Retail Federation argues that for businesses that currently must comply with a patchwork of laws, one pre-emptive law would greatly simplify the notification process.

In written testimony Feb. 3, the retail trade group’s general counsel, Mallory Duncan, said a federal standard would allow businesses “to focus their resources on remedying the breach and notifying consumers rather than hiring outside legal assistance to help guide them through the myriad and sometimes conflicting set of 50 data breach notification standards in the state and federal jurisdictions.”

AFP Photo/Al Seib