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Trump Weakened Key Civil Rights Agency When It Is Needed Most

Reprinted with permission from ProPublica

In recent weeks, as protests against police violence and systemic racism have swept across the nation, a key federal civil rights agency — an agency created to bridge racial divides — has been largely absent.

Dubbed “America's Peacemaker," the Community Relations Service was established in 1964 as civil rights protesters across the South came under attack. The service, which is part of the Justice Department, is credited with helping to avert bloodshed during some of the most contentious demonstrations of the 1960s.

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How Fed Bailout Greased A Top Treasury Official’s Family Financial Firm

Reprinted with permission from ProPublica.

Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin have become the public faces of the $3 trillion federal coronavirus bailout. Behind the scenes, however, the Treasury's responsibilities have fallen largely to the 42-year-old deputy secretary, Justin Muzinich.

A major beneficiary of that bailout so far: Muzinich & Co., the asset manager founded by his father where Justin served as president before joining the administration. He reported owning a stake worth at least $60 million when he entered government in 2017.

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Sen. Burr Gives Up Intel Committee Chair As FBI Probe Intensifies

Reprinted with permission from ProPublica.

Sen. Richard Burr will be stepping aside as chairman of the Senate Intelligence Committee during the investigation into his stock trades, Senate Majority Leader Mitch McConnell announced Thursday.

“Senator Burr contacted me this morning to inform me of his decision," McConnell wrote in a statement. “We agreed that this decision would be in the best interests of the committee and will be effective at the end of the day tomorrow."

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Sen. Burr And Brother-in-Law Dumped Stocks On Same Day — Then Market Crashed

Reprinted with permission from ProPublica.

Sen. Richard Burr was not the only member of his family to sell off a significant portion of his stock holdings in February, ahead of the market crash spurred by coronavirus fears. On the same day Burr sold, his brother-in-law also dumped tens of thousands of dollars worth of shares. The market fell by more than 30 percent in the subsequent month.

Burr's brother-in-law, Gerald Fauth, who has a post on the National Mediation Board, sold between $97,000 and $280,000 worth of shares in six companies — including several that have been hit particularly hard in the market swoon and economic downturn.

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Sen.Burr Pushes Healthcare Industry Legislation While Trading Its Stocks

Reprinted with permission from ProPublica.

In his 15 years in the Senate, Richard Burr, a North Carolina Republican, has been one of the health care industry's staunchest friends.

Serving on the health care and finance committees, Burr advocated to end the tax on medical device makers, one of the industry's most-detested aspects of the 2010 Affordable Care Act. He pushed the Food and Drug Administration to speed up its approval process. As one of the most prominent Republican health care policy thinkers, he has sponsored or co-sponsored dozens of health-related bills, including a proposal to replace “Obamacare." He oversaw the implementation of major legislation to pump taxpayer money into private sector initiatives to address public health threats. “The industry feels very positive about Sen. Burr," the president of North Carolina's bioscience trade group said during Burr's last reelection campaign. “He's done a stellar job."

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Sen. Burr Sold His Pricey Townhouse To Lobbyist Donor


The chairman of the Senate Intelligence Committee, Richard Burr, has come under fire in recent weeks for unloading stock holdings right before the market crashed on fears of coronavirus and for a timely sale of shares in an obscure Dutch fertilizer company.

Now the North Carolina Republican's 2017 sale of his Washington, D.C., home to a group led by a donor and powerful lobbyist who had business before Burr's committee is raising additional ethical questions.

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FBI Probing Sen. Burr Over Pandemic Stock Sales

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Federal authorities are scrutinizing Sen. Richard Burr's stock sell-off before the market crash triggered by the coronavirus outbreak, CNN reported on Sunday.

The news comes less than two weeks after ProPublica and the Center for Responsive Politics reported that Burr, a Republican from North Carolina, unloaded between $628,000 and $1.72 million of his holdings on Feb. 13 in 33 separate transactions, a significant portion of his total portfolio. The sales came soon after he offered public assurances that the government was ready to battle the coronavirus.

According to CNN, the FBI has reached out to Burr seeking information about the trades. The inquiry is in its early stages and is being done in coordination with the Securities and Exchange Commission.

Alice Fisher, an attorney advising Burr, declined to confirm the investigation, but she said in a statement to ProPublica that "Senator Burr welcomes a thorough review of the facts in this matter, which will establish that his actions were appropriate."

"The law is clear that any American — including a Senator — may participate in the stock market based on public information, as Senator Burr did," she said. "When this issue arose, Senator Burr immediately asked the Senate Ethics Committee to conduct a complete review, and he will cooperate with that review as well as any other appropriate inquiry."

The FBI and SEC declined comment.

The CNN report suggested that the Justice Department was scrutinizing stock trades made by multiple lawmakers. After the ProPublica story on Burr, various media outlets reported on other senators who also sold stock before the downturn, including a Daily Beast story on GOP Sen. Kelly Loeffler of Georgia and her husband selling between $1.27 million and $3.1 million of stock. They also purchased shares of Citrix, a work-from-home software company.

Loeffler has said the trades were made without her knowledge by a third-party financial adviser. A Loeffler spokesperson told CNN that Loeffler has not been contacted by the FBI.

Burr has defended his sell-off, saying he relied solely on public information to inform his trades, including CNBC reports, and did not rely on information he obtained as chair of the Senate Intelligence Committee.

His stock sales drew widespread outrage, resulting in calls for his resignation from prominent Republicans and Democrats. Three House Democrats have introduced legislation to bar lawmakers from trading individual stocks.

House Democrats Push For Tougher Oversight Of Regulators’ Conflicts Of Interest

Reprinted with permission from ProPublica.

A group of House Democrats introduced a bill on Wednesday that would require federal officials to disclose any potential conflicts of interest before they implement significant changes in U.S. regulations.

The lawmakers said the legislation is intended to alert the public if those involved in the decisions, including the president and his top advisers, would personally profit from revising or replacing the rules.

“President Trump ran and campaigned on this idea of draining the swamp,” said the bill’s author, Rep. David Cicilline, D-R.I. “We see, in fact, he has filled the swamp with people who have deep business interests and may be using their positions in the government to advance their financial interests.”

Among those who would have to project how much they would personally benefit from any particular regulatory changes are members of the new deregulation teams Trump has installed at federal agencies. The groups are tasked with weakening or eliminating government rules found to be overly burdensome for businesses.

The Congress members cited a recent investigation by ProPublica and The New York Times revealing that members of these deregulation teams have deep industry ties and are reviewing regulations their previous employers sought to weaken or kill. Appointees include lawyers who represented businesses in cases against government regulators, staff members of political groups raising so-called dark money and employees of industry-funded organizations opposed to environmental rules. At least four were registered to lobby the agencies they now work for and at least two may be positioned to profit if certain regulations are undone.

Federal agencies have defended their deregulation teams, saying appointees are adhering to strict ethics rules and generally avoiding topics that would narrowly affect recent former employers. The Trump administration has said its deregulatory push is necessary because similar reviews of existing rules by past administrations were not rigorous enough.

Cicilline’s bill, co-sponsored by Reps. John Conyers, Raul Grijalva, Lloyd Doggett, Gerry Connolly and Peter DeFazio — all Democrats — would require “an assessment and quantification” of the conflicts of interest for any major regulatory action. The report would disclose any possible personal benefit for the president, his senior advisers and members of the deregulation teams, along with the heads of the agency issuing the rule, the Office of Management and Budget and the Office of Information and Regulatory Affairs.

Though ProPublica and the Times have identified nearly three dozen deregulation team members with potential conflicts, a full vetting of industry connections has been difficult because some agencies have declined to provide information about the appointees — in many cases, not even their names.

Cicilline was among a group of Congress members who wrote a letter to the White House in August calling on the administration to release the names of all deregulation team members as well as documents relating to their potential conflicts of interest.

He said they have received no response. “This sadly has become the practice of this administration to routinely ignore members of Congress. That’s very disturbing to me and other members,” Cicilline said.

The congressman does not yet have any Republican support for his legislation, which would be needed for it to pass. “One would hope that shining light on this would be a bipartisan issue,” Cicilline said. Members of the House Republican leadership didn’t immediately return requests for comment.

The deregulation teams are part of Trump’s push to cut red tape across government, and have created a new avenue of influence for industries trying to kill rules they say hurt profits, depress job creation and raise prices. Environmental, consumer and other liberal groups have argued such regulations protect the public, keeping drinking water clean and roads safe, for example.

Among the appointees are Byron Brown, who is a member of the deregulation task force at the Environmental Protection Agency. He is married to a senior government affairs manager for the Hess Corporation, an oil and gas company regulated by the EPA.

The agency has declined to say whether Brown or his wife own shares in Hess, though an agency ethics official said Brown had recused himself from evaluating regulations affecting the company. The agency declined to say whether Brown would also recuse himself from issues affecting the American Petroleum Institute, where his wife’s company is a member. The association has lobbied to ease Obama-era natural gas rules, complaining in a recent letter to Brown’s team about an “unprecedented level of federal regulatory actions targeting our industry.”

Before she led the deregulation team at the Department of Housing and Urban Development, Maren Kasper was a director at Roofstock, an online marketplace for investors in single-family rental properties. Financial disclosure records show that Kasper owned a stake in the company worth up to $50,000.

Changes at HUD could increase investor interest in rental homes, affecting a company like Roofstock. The agency, for example, oversees the federal government’s Section 8 subsidies program for low-income renters. Ethics officials allowed Kasper to keep her stake during her short tenure on the task force, but she pledged not to take actions that would affect the company.

Header image: Rep. David Cicilline, D-R.I. (Bill Clark/Roll Call/Via Getty Images)

Tom Price’s $150,000-Plus Stock Windfall

Reprinted with permission from ProPublica.

 

Tom Price doesn’t appear to have suffered a financial hit when he fulfilled his pledge to sell off some assets as the new head of the Department of Health and Human Services.

On one transaction alone, Price made a profit of more than $150,000 on shares he held in a tiny Australian biotech company, according to his financial disclosures. His purchases of that stock, which came while he was serving in Congress, were the subject of particular scrutiny during his confirmation hearings in January. He was one of a handful of U.S. investors allowed to buy discounted shares in Innate Immunotherapeutics, which was working on an experimental multiple sclerosis drug.

Price invested about $10,000 in 2015 and another $50,000 to $100,000 in the company last summer, records show. He appears to have sold all those shares on two days in February, reaping between $265,000 and $550,000, according to forms he filed last month with the federal Office of Government Ethics. Filers are required to show only a range of the value of any sold or purchased stock, meaning that his overall profit could range from $154,983 to as much as $489,981.

The forms show Price also sold shares worth a total of tens of thousands of dollars in about three dozen other companies involved in businesses including health care, technology and airlines.

While he served in Congress, Price reported trading hundreds of thousands of dollars’ worth of shares in health-related companies while he voted on and sponsored legislation affecting the industry. He testified at his HHS confirmation hearings that his trades were lawful and transparent. Democrats accused him of potentially using his office to enrich himself. ProPublica previously reported that his trading is said to have been under investigation by federal prosecutors.

Price testified during his confirmation hearings that the discounted shares in Innate Immunotherapeutics “were available to every single individual that was an investor at the time.”

But, as The Wall Street Journal reported, the discounted shares were only available to American investors by invitation. Price learned of the company from his friend Rep. Chris Collins, R-N.Y., a company director and its largest shareholder. Collins told the Journal he invited Price to buy, and Price did so in two purchases, one at 18 cents a share and another at 26 cents a share during the summer of 2016. When Price sold off his investment, Innate was trading at around 90 cents.

Before he was confirmed, Price pledged to sell off his holdings.

Price did not respond to a request for an interview.

Price has said before that his trades while he was in Congress were promptly disclosed, as required by law. He has rejected allegations that he ran afoul of insider-trading rules or used his position as chair of the powerful House Budget Committee to get information or opportunities not available to normal investors.

Last week, ProPublica reported that on the same day his stockbroker bought him up to $90,000 of stock in six pharmaceutical companies, Price arranged to call a top U.S. health official, seeking to scuttle a controversial rule that could have hurt the firms’ profits and driven down their share prices.

 

Tom Price Intervened On Rule That Would Hurt Drug Profits, The Same Day He Acquired Drug Stock

Reprinted with permission from ProPublica.

On the same day the stockbroker for then-Georgia Congressman Tom Price bought him up to $90,000 of stock in six pharmaceutical companies last year, Price arranged to call a top U.S. health official, seeking to scuttle a controversial rule that could have hurt the firms’ profits and driven down their share prices, records obtained by ProPublica show.

Stock trades made by Price while he served in Congress came under scrutiny at his confirmation hearings to become President Trump’s secretary of health and human services. The lawmaker, a physician, traded hundreds of thousands of dollars’ worth of shares in health-related companies while he voted on and sponsored legislation affecting the industry, but Price has said his broker acted on his behalf without his involvement or knowledge. ProPublica previously reported that his trading is said to have been under investigation by federal prosecutors.

On March 17, 2016, Price’s broker purchased shares worth between $1,000 and $15,000 each in Eli Lilly, Amgen, Bristol-Meyers Squibb, McKesson, Pfizer and Biogen. Previous reports have noted that, a month later, Price was among lawmakers from both parties who signed onto a bill that would have blocked a rule proposed by the Obama administration, which was intended to remove the incentive for doctors to prescribe expensive drugs that don’t necessarily improve patient outcomes.

What hasn’t been previously known is Price’s personal appeal to the Centers for Medicare & Medicaid Services about the rule, called the Medicare Part B Drug Payment Model.

The same day as the stock trade, Price’s legislative aide, Carla DiBlasio, emailed health officials to follow up on a request she had made to set up a call with Patrick Conway, the agency’s chief medical officer. In her earlier emails, DiBlasio said the call would focus on payments for joint replacement procedures. But that day, she mentioned a new issue.

“Chairman Price may briefly bring up … his concerns about the new Part B drug demo, as well,” she wrote. “Congressman Price really appreciates the opportunity to have an open conversation with Dr. Conway, so we really appreciate you keeping the lines of communication open.”

The call was scheduled for the following week, according to the emails.

An HHS spokesman didn’t respond to a request for comment from Price. DiBlasio and Conway didn’t respond to questions about the phone call.

The proposed rule drew wide opposition from members of both parties as well as industry lobbyists and some patient advocacy groups. It was meant to change a system under which the government reimburses doctors the average sales price for drugs administered in their offices or inside clinics, along with a 6 percent bonus. Some health analysts say that bonus encourages doctors to pad their profits by selecting more expensive treatments.

Critics argued that the rule might cause Medicare enrollees to lose access to lifesaving drugs. Lawmakers worried the federal government was potentially endangering patients and turning them into guinea pigs in a wide-scale experiment in cost savings.

However, supporters of the rule said the experiment in payments was the kind of drastic action needed to rein in soaring health costs. “We are actively reforming every other aspect of our health-care system to pay for value except pharmaceuticals,” Rep. Jan Schakowsky (D-IL), said at the time. “Drug manufacturers are the only entity that can charge Medicare anything they want.”

The six companies that Price invested in were steadfastly opposed to the rule. McKesson formally warned investors in a Securities and Exchange Commission filing that such a change could hurt share prices. The firms lobbied the government to kill the plan.

And at two of the six companies Price invested in, people who used to work for the congressman were part of the lobbying effort.

Price’s former chief of staff, Matt McGinley, lobbied House members for Amgen, disclosure records show. Another former Price aide, Keagan Lenihan, lobbied on behalf of McKesson, where she was director of government relations at the time. Lenihan has since reunited with Price, returning to government to work as a senior adviser to her old boss at HHS.

Neither McGinley nor Lenihan responded to requests for comment.

Although Price said he wasn’t aware of his broker’s trades at the time they were made, he would have learned of his holdings no later than April 2016 when he signed and filed his latest financial disclosure forms. In earlier disclosures, Price signed forms listing his other health-related holdings, which included some drug stocks.

Price’s personal intervention raises more questions about the overlap between his investments and his work as a member of Congress.

According to House ethics guidelines, “contacting an executive branch agency” represents “a degree of advocacy above and beyond that involved in voting” on legislation where a financial conflict of interest may exist.

“Such actions may implicate the rules and standards … that prohibit the use of one‘s official position for personal gain,” the guidelines state. “Whenever a Member is considering taking any such action on a matter that may affect his or her personal financial interests, the Member should first contact the Standards Committee for guidance.”

Tom Rust, chief counsel for the House Ethics Committee, declined to comment, saying any consultations with members of Congress are confidential.

In December, after Trump was elected and named Price as his choice to lead HHS, Obama administration health officials scrapped their plan to change the drug reimbursement system. “The complexity of the issues and the limited time available led to the decision not to finalize the rule at this time,” a spokesman said.

 

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

Reprinted with permission from 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.

Conservatives Plot Their Course On The Rising ‘Sea Of Red’ In State Capitals

Reprinted with permission from ProPublica.

Shortly after the November election, with the nation’s political attention focused on the Trump transition, an influential advocacy group met outside Washington to discuss how to leverage the extraordinary shift of power to Republicans in the rest of the country.

The American Legislative Exchange Council — a nonprofit better known as ALEC — briefed its members and allied groups on the bright future for its agenda now that Republicans will effectively control 68 of the nation’s 99 state legislative bodies, as well as 33 governor’s mansions. Among other things, group members said they would push bills to reduce corporate taxes, weaken unions, privatize schooling and influence the ideological debate on college campuses.

“We can pretty much do whatever we want to right now,” said Rep. Jim DeCesare, a Republican state legislator in Kentucky, where the party gained the state House for the first time in nearly a century.

DeCesare, who had been minority whip, described plans for “a pretty intense agenda” including a so-called right-to-work law allowing employees who are covered by collective bargaining agreements to opt out of joining labor unions. Another, he said, would be repealing rules that require government contractors to pay employees more than the minimum wage. Neighboring states competing for new businesses, he said, had already gutted such regulations.

“We’ve got some catching up to do, but we plan to make up a lot of ground in a very short time,” DeCesare said. “This is our time to shine.”

Another ALEC official, Michael Bowman, told the group that outside advocates, not lawmakers, held the key to success. “Legislators are not the trailblazers of developing policies,” Bowman said. “They’re actually the retail consumers.”

ALEC, founded in 1973, acts as a clearinghouse for business-friendly model bills. Among its major donors are the billionaires Charles and David Koch. Members include corporations and their lobbyists, along with hundreds of legislators who work together to craft free-market legislation offered in many states at once. The group has successfully advanced bills imposing voter ID rules and loosening labor and environmental regulations.

Because the group generally allies with Republicans, November’s results provide the best chance yet to turn its ideas into law. In Iowa, for example, the party regained dominance in the state Senate, winning a trifecta of both chambers and the governorship for the first time in almost two decades. Republicans expanded their lead in the Pennsylvania Senate to a two-thirds majority, large enough to threaten to override vetoes by Gov. Tom Wolf, a Democrat. Even in North Carolina, where Democrat Roy Cooper eked out a win for governor, Republicans retained their veto-proof majorities in the legislature, where lawmakers have pushed through a series of controversial laws, including one that rolled back protections for transgender people using public bathrooms. The number of states where Republicans control both the legislature and the governor’s office will rise from 23 to 25. The total number of Republican legislators nationwide also has grown.

The post-election lunch meeting, held Nov. 17 at the organization’s Arlington, Virginia, headquarters, included members of ALEC and other conservative groups, with some calling into a private conference line. Ashley Varner, a strategic communications director at ALEC, opened the session by pointing out that with the power shift in Washington, opportunities at the state level were flying under the radar. “There’s a sea of red,” Varner said, adding that hundreds of incumbents from both parties had been ousted. “What are we going to do with these new legislatures?’

Inez Feltscher, director of ALEC’s education task force, outlined plans to advocate for legislation giving money to parents who take their children out of public schools — stipends they could use for private schooling or other educational expenses. Critics of these “education savings accounts” say they’re a drain on public-school funding, while proponents argue they give parents a chance to pick the best situation for their kids.

Feltscher acknowledged another motivation: “To break the monopoly on one of the most important institutions in America.” Conservatives have long been at odds with teachers unions over the structure and curriculum of public schools. “We’ve let the left take over almost all of the cultural institutions of this country,” she said.

Another ALEC target, Feltscher said, would be the state of “free debate on American universities,” which conservatives say are largely dominated by left-leaning faculty, courses and speakers. For example, she said, lawmakers could use a range of tactics to press administrators to include multiple ideologies during on-campus public policy talks, such as demanding an annual count of campus events that included more than one perspective. Simply requiring measurement and public reporting would apply pressure, she said, but legislators could also take it to “the nuclear level” and threaten to pull funding from schools that are perceived to be limiting discourse.

“There’s going to be a lot more aggression on this,” Feltscher said.

ALEC executives also forecasted tax cuts and other conservative fiscal reforms in New Hampshire, Missouri, Alabama, Mississippi, South Carolina and West Virginia. Jonathan Williams, vice president of ALEC’s Center for State Fiscal Reform, reminded the group that one of the only Republican majorities lost in November came in Nevada, where taxes had been raised.

Williams acknowledged the presidential campaign was “a little light on policy details” but said he was optimistic the Trump administration would follow the states’ lead. “The stars have aligned,” Williams said.

Bowman, who is ALEC’s vice president of policy, said the change in Washington might benefit ALEC’s fight to preserve anonymity for donors to politically active nonprofit groups at the state level. With Trump in office, Democrats might now start to see the value of this privacy. “Democrats who are afraid of the Republican administration are beginning to say ‘Maybe we need to embrace some First Amendment rights,’” Bowman said.

Contacted for comment, Varner, the ALEC communications director, said the organization’s optimism is based not on expanded Republican control, but rather voter discontent with the status quo, regardless of party. DeCesare, the Kentucky lawmaker, responded with an email stating he didn’t attend the meeting. Varner, however, confirmed that DeCesare had called into the meeting on the conference line.

This week, some of the promises DeCesare made during the ALEC meeting began to materialize, with a Kentucky House committee approving a “right to work” bill and another to roll back the prevailing wage rule.

Stephen Voss, a University of Kentucky political scientist, said the Republican resurgence will have a major impact on important policies across the country. He expects most of the changes to percolate out of formerly split states where the GOP has now taken total control — like Kentucky — rather than in states with longstanding Republican majorities.

“Those are the states where there’s just a lot of pent-up demand, a lot of unhappiness with the status quo,” he said. “The people who have been waiting to make those changes can now implement them.”

Voss said that shifts in political control after years of stability often produce a period of dramatic policy innovation.

“And what we know about public policy is it spreads,” Voss said. “Other states will pick up their innovations, good or bad.”

IMAGE: Flickr/Kumar Appaiah

A Kansas Group’s Push To Oust Judges Reveals A Gap In Campaign Finance Rules

by Robert Faturechi, ProPublica.

With just three weeks left before the upcoming midterm elections, a group called “Kansans for Justice” surfaced with the aim of persuading voters to oust two of their state Supreme Court justices.

“Your Kansas Supreme Court justices are using their political beliefs to rule against sound court cases,” the group’s website said. “On November 4th, vote No and remove Kansas Supreme Court Justices Eric Rosen and Lee Johnson from the bench.”

Kansas Supreme Court justices are appointed by the governor, but at the end of each justice’s six-year term, voters decide whether to retain the judge or allow the governor to pick a replacement.

The unexpected emergence of Kansans for Justice in what have historically been uncontested retention races has exposed a loophole in the state’s campaign finance rules: Even though the group has all the hallmarks of a political committee — it is soliciting contributions, plans to send mailers, and has an explicit electoral goal — it’s not required to report anything about its leadership, donors or spending.

The disclosure requirements imposed on groups that try to influence other types of races don’t apply because Supreme Court justices are not included in Kansas’ legal definition of “state officers” — an omission that shocked even the attorney at the state agency that oversees campaign finance.

No one appears to track the rules around these elections but a ProPublica review found that at least one other state has a similar gap in campaign finance regulation for these increasingly politicized races. Experts called the lack of transparency worrisome, leaving voters unable to see who’s trying to influence retention elections and the system blind to the potential conflicts of interest that could arise if backers of such efforts come before the courts they helped remake.

“It’s a particularly egregious form of dark money,” said Alicia Bannon, an attorney with the Brennan Center for Justice at the New York University School of Law, who has been critical of special interest influence in judicial races. “Not only do you not know who’s behind the spending, you don’t even have information about what spending is taking place … there can be groups that are having quite a significant impact on a state’s race without any kind of public scrutiny.”

In an early interview, a spokeswoman for Kansans for Justice described the group as a nonpartisan, grassroots effort.

“Our goal is really to reach Kansas voters, help them understand what the Kansas Supreme Court is doing,” Amy James said. “We obviously feel a change is needed.”

The group did not respond to a request for information about their donors and spending.

One of the group’s supporters said its anti-retention push shouldn’t be subject to disclosure rules because it’s not a political campaign in support of particular candidates, but rather against the two incumbents.

This particular retention vote, however, could have distinctly political consequences. The two justices targeted by Kansans for Justice were appointed by a Democrat, former Gov. Kathleen Sebelius. If they’re voted out, their replacements could be chosen from a pool submitted to Republican Gov. Sam Brownback, who’s embroiled in a contentious fight for re-election himself. Brownback has made eliminating “liberal” justices one of his central campaign promises. Depending on the election results, the court’s balance could shift from 4-3 in favor of Democratic appointees to 5-2 in favor of Republican appointees.

Across the country, state Supreme Court races have become increasingly politicized, a trend that supporters say helps hold judges accountable for legislating from the bench and critics call a threat to judicial independence.

According to the Brennan Center, outside groups and parties spent upwards of $24 million on Supreme Court contests during the 2012 election cycle, about twice as much as the two previous cycles combined. Unlike megabuck federal elections, as little as a few hundred thousand dollars can swing these races, giving donors more bang for the buck.

Most of the attention has focused on states where voters elect justices, not on the 20 states where governors appoint them and voters only get to decide whether they’re retained. But in these states, too, political activity around judicial contests has ratcheted upward.

During the last cycle, justices in Florida faced an expensive challenge from the state Republican Party and Americans for Prosperity, a group supported by billionaire brothers David and Charles Koch. In that race, all three justices were ultimately retained, despite ads blasting them for a decision to block a proposition aimed at blunting Obamacare. Even some Republicans called the anti-retention campaign a threat to judicial independence.

In 2010, three justices up for retention in Iowa were booted from office after a ruling that legalized same-sex marriage. The groups that funded the anti-retention movement, which included the National Organization for Marriage and the American Family Association, significantly outspent their opposition.

The disclosure rules for outside groups active in retention elections vary considerably from state to state, a ProPublica review found.

In states such as California and Tennessee, groups campaigning for or against retention have to register and report on their fundraising and spending just like any other political committees.

But at least one other state, Utah, appears to take the same approach as Kansas. In an interview, Utah’s deputy director of elections initially said groups campaigning against retaining a justice would have to register as political committees. But upon reviewing the election code, he found that justices aren’t included in the state’s definition of “public office.”

“It’s just surprising,” said Justin Lee, the deputy director. “Anything else on the ballot, whether an issue or a proposition or any candidates, when you’re spending money for or against it, that has to be disclosed and registered.”

In Kansas, the gap in campaign-finance rules was discovered when Brett Berry, the lawyer for the state’s Governmental Ethics Commission, received an inquiry from a man who said he was calling on behalf of the friends and relatives of Wichita Massacre victims.

In this 2000 incident, one of the most notorious crimes in the state’s history, two brothers went on a week-long killing spree. Earlier this year, the Kansas Supreme Court tentatively vacated the brothers’ death sentences because of problems with the jury instructions in their trial.

The man who called Berry asked him what the reporting obligations would be for a group expressly advocating against the retention of a Supreme Court justice.

Berry thought the answer was obvious.

“I told him they’d have to register as a PAC,” Berry said, referring to political action committees, which in Kansas are required to register and reveal their donors and expenditures.

But then he dug further and found an obscure 2010 ethics opinion that concluded Kansas’ campaign finance law doesn’t apply to judicial retention elections.

“And it dawned on me,” Berry recalled. “I called him back and told him ‘You don’t have to register as a PAC and you’re not subject to the reporting requirements … Campaign finance doesn’t apply.'”

Berry said he doesn’t understand why state law allows this type of political spending to go completely unchecked.

“It just seems like it’s something we should be regulating because we regulate state and local offices,” he said. “You think of a Supreme Court justice. They’re on the ballot. That’s a state office.”

Days after Berry told the caller no disclosure was required, Kansans for Justice was launched. The group has gotten a flurry of local press since unveiling its campaign against Rosen and Johnson. It takes donations on its website, and plans to send out political mailers urging Kansans to oust the two “activist” judges.

The man who called on behalf of the group, Berry said, was David Gittrich — a well-known anti-abortion activist. In the past, Gittrich has been a vocal critic of activist judges on the state Supreme Court, and his organization, Kansans for Life, has unsuccessfully encouraged voters to oust such jurists.

Asked by ProPublica about his relationship with Kansans for Justice, Gittrich said he had read about them in the newspaper. “That’s it,” he said. “Got about as close a relationship with you as I do with them, closer with you because I’ve talked to you.”

Gittrich acknowledged he had called Berry on the group’s behalf, but said he was doing a favor for a friend associated with the group. He would not identify the friend.

Kansans for Justice did not respond to questions about what relationship the group has, if any, with Gittrich.

Bannon, the critic of special interest influence in judicial races, said states that don’t require disclosure for retention campaign spending need to update their laws.

“It’s deeply troubling,” she said. “The increased politicization of judicial election and retention is a new political phenomenon. States haven’t kept up with this new reality.”

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Photo: J. Stephen Conn via Flickr