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Sen. Collins Backed Off Private Equity Tax Reform — And Reaped Huge Donations

Reprinted with permission from ProPublica

In late November 2017, Senate Republicans were racing to secure the votes for their sweeping tax overhaul. With no Democrats supporting the bill and even some Republicans wavering, Sen. Susan Collins, the Maine Republican, found herself with enormous leverage.

The day before the vote, she offered an amendment to make the legislation, which lavished tax cuts on corporations and the wealthy, more equitable. It expanded a tax credit to make child care more affordable. To pay for it, she took aim at a tax break cherished by the private equity industry.

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New IRS Rules On Dark Money Likely Won’t Be Ready Before 2016 Election

by Theodoric Meyer, ProPublica.

The Internal Revenue Service says it won’t come out with new proposed rules for so-called dark money groups until late spring at the earliest, increasing the likelihood that no changes will take effect before the 2016 elections.

These groups — social welfare nonprofits that can engage in politics, but do not have to disclose their donors — have become a major force in elections, pouring at least $257 million into the 2012 elections. The Wesleyan Media Project estimates that dark money paid for almost half the TV ads aired in the 2014 Senate races.

The IRS originally issued a draft version of the rules for dark money groups more than a year ago, but withdrew them for revisions after receiving intense criticism from both ends of the political spectrum.

Some advocates of campaign finance reform have touted tighter IRS controls as the best shot of reining in the influence of such groups ahead of the 2016 presidential race.

Under the current IRS rules, social welfare nonprofits are allowed to spend money on politics as long as they are “primarily engaged in promoting in some way the common good and general welfare of the people of the community.” But it’s unclear exactly how much revenue groups can put toward politics, and which activities count as political.

As ProPublica has reported, social welfare nonprofits have sworn under penalty of perjury that they would not engage in politics and then spent heavily to influence campaigns. Some have spent much or all of the money they raised on elections. Others have reported campaign expenditures to the Federal Election Commission, then told the IRS that the spending was not political.

IRS Commissioner John Koskinen said in June that the agency expected to have revamped draft rules out early next year, but spokeswoman Julianne Breitbeil now says it will take longer. Even the late spring deadline is hardly firm: Marcus Owens, a Washington lawyer who used to run the IRS’ exempt organizations division, said the agency “regularly misses its self-appointed deadlines” for releasing new rules.

If the IRS issues a proposal in late spring, it’s possible new rules could be finalized before the 2016 election, said Lloyd Hitoshi Mayer, a law professor and associate dean at the University of Notre Dame who is an expert in nonprofit tax law.

But the agency needs to clear several hurdles to pull this off.

Once the new draft comes out, the agency will accept comments from the public—figure 60 to 90 days for that. The IRS is also required to hold a public hearing, which typically follows the comment period. After that, the agency will revise the rules again or move to finalize them, said Nancy Ortmeyer Kuhn, a former senior attorney for the exempt organizations division in the IRS chief counsel’s office.

“I would guess at a minimum it would be a year before they’d be finalized, but that’s optimistic,” she said.

John Pomeranz, a Washington lawyer who has advised politically active social welfare nonprofits, said he thought it would be “almost impossible” for the IRS to have the rules in place in 2016.

“I would buy you lunch if these rules go into effect before Jan. 1, 2017,” he said.

Even if the IRS manages to finish the rules next year, there may be other roadblocks.

Republicans, who will control both the Senate and the House next year, could propose legislation blocking or postponing any new strictures on dark money. The House passed a bill introduced by Rep. Dave Camp, a Michigan Republican, earlier this year that would have delayed the implementation of new IRS rules on nonprofits, but the measure didn’t make it out of the Senate. A spokeswoman for Camp declined to comment on whether he would introduce a similar bill next year.

“This is going to be a bitter battle,” said Gary Bass, the executive director of the Bauman Foundation, who has called for clearer regulations. Lawsuits filed by those who think the rules don’t go far enough or those who think they go too far could delay the rules further, he added.

It’s unknown how aggressive the IRS’ new proposal will be in attempting to rein in political activity by social welfare nonprofits. Some observers expect the agency to set a hard limit on how much of groups’ spending can be devoted to politics, perhaps 40 percent or less. Others think the limit will be higher — close to 50 percent — or that there won’t be a numerical limit at all.

David Keating, president of the Center for Competitive Politics, which has called for less restrictive campaign finance regulations, said he doubted the rules would significantly affect the social welfare nonprofits that spend the most on elections, such as Crossroads GPS on the right and Patriot Majority USA on the left.

“For the people who are pinning their hopes on IRS rules changing how these groups operate, I think they’re kidding themselves,” he said. “I don’t think it’s going to happen.”

Kuhn, the former IRS senior attorney, said she expected the agency to come up with rules that are “bland and hard to attack.”

“The whole controversy of dark money — I really don’t think that’s going to be solved through the IRS regulatory process,” she said.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletter.

Photo: Tobym via Flickr

Secret Donors Behind Some SuperPACs Funneling Millions Into Midterms

by Theodoric Meyer, ProPublica.

In the final weeks before this year’s elections, a SuperPAC called Key Questions, Key Answers started buying TV ads across Pennsylvania attacking Tom Wolf, the Democratic candidate for governor.

“Don’t vote for a wolf in sheep’s clothing,” the narrator says in one of the ads as a sheep with Wolf’s face bleats the word “taxes.”

Like all SuperPACs — outside groups allowed to take unlimited amounts of money from individuals, corporations and unions — Key Questions must disclose its donors.

But last week, Key Questions told the Federal Election Commission it had just one, a social welfare nonprofit called Let Freedom Ring. Since social welfare nonprofits — sometimes called dark money groups — aren’t required to identify their donors, it’s impossible to say who’s really behind Key Questions’ last-minute ad blitz.

Outside groups, including SuperPACs and nonprofits, have spent more than $539 million on politics in this election cycle, according to the Center for Responsive Politics, a nonprofit that monitors money in politics. That’s almost twice as much as such groups spent during the 2010 midterm elections.

SuperPACs alone have shelled out about $332 million so far in this cycle, mostly from donors who are disclosed.

But Key Questions is one of a handful of SuperPACs, liberal and conservative, funded entirely or almost entirely by dark money groups, FEC records show, obscuring the origin of the money they are putting into 2014 races.

A SuperPAC called the Government Integrity Fund Action Network, which has spent more than $1 million on ads supporting Tom Cotton, the Republican Senate candidate in Arkansas, is entirely funded by the Government Integrity Fund, a dark money group.

And Alaska SalmonPAC, a SuperPAC that’s spent more than $1.4 million to support Democratic Sen. Mark Begich and oppose his opponent, has received almost all of its funding from the League of Conservation Voters, which doesn’t disclose its donors.

It’s not illegal for SuperPACs to be funded entirely by dark money unless a nonprofit is effectively acting as a straw donor, helping the real source of a contribution avoid disclosure, said Paul S. Ryan, senior counsel for the nonpartisan Campaign Legal Center. Otherwise, such donations are kosher at the federal level, he said, even if “voters are getting no useful information about where the money’s coming from.”

Nonetheless, Ann Ravel, an FEC commissioner and the former chairwoman of the California Fair Political Practices Commission, said she saw such maneuvers as troubling end runs around disclosure requirements for SuperPACs. “It creates a difficulty in determining whether there’s corruption in the political system,” she said.

Key Questions and Let Freedom Ring are closely connected.

Let Freedom Ring’s president, Colin Hanna, is also the chairman of Key Questions. JC Callahan, another Let Freedom Ring staffer, is Key Questions’ treasurer. Both groups are run out of the same office in Hanna’s home in West Chester, PA.

The ads funded by Let Freedom Ring’s $200,000 donation started airing earlier this month in the Harrisburg, Philadelphia and Pittsburgh markets.

Hanna said he came up with the commercials to help counter the millions that Wolf has poured into his own campaign against Republican Gov. Tom Corbett. Wolf has been leading Corbett in the polls. “I felt the prevailing wisdom that Tom Wolf had the race sewed up was suspect,” Hanna said.

Let Freedom Ring was one of the earliest dark money groups to spend heavily on political ads.

Hanna started the group back in 2004 with the help of a $1 million donation from John M. Templeton Jr., a surgeon whose father was a wealthy philanthropist and investor. Let Freedom Ring spent millions on ads attacking Barack Obama in 2008, two years before the Supreme Court’s Citizens United decision helped spur a massive rise in political spending by social welfare nonprofits.

Hanna decided to create Key Questions this year in addition to the dark money group on the advice of his lawyer, he said. “I think the difference between the two may have more utility in the future than at present,” Hanna said. He declined to elaborate.

Social welfare nonprofits like Let Freedom Ring are required to devote the majority of their efforts to “the promotion of social welfare,” not politics, and to report how much they spend to influence elections to the Internal Revenue Service.

But Let Freedom Ring’s annual filings to the IRS seem to conflict with its reports to election regulators. In 2008, 2010 and 2012, Let Freedom Ring reported spending money on politics to the FEC. But on tax forms for each of those years, signed under penalty of perjury, the group told the IRS it had spent no money on politics.

This appears to violate the tax code, said Brian Galle, an associate professor at Boston College Law School who specializes in nonprofits and political activity. “It’s very hard to argue that you didn’t know you were engaging in political activity when you’re telling another government regulator that you’re engaging in political activity,” he said.

Hanna referred questions about the tax forms to the group’s lawyer, Cleta Mitchell.

Mitchell declined to comment on Thursday, saying she did not have time so near the election.

Let Freedom Ring may not be Key Questions’ sole donor for much longer.

Hanna said the SuperPAC had received contributions from another contributor since filing its most recent FEC report, but declined to identify the source.

Pennsylvania voters won’t find out who it is before they head to the polls. The SuperPAC’s next FEC report isn’t due until more than a month after Election Day.

Robert Maguire, a Center for Responsive Politics researcher who has investigated SuperPACs funded by dark money groups, said the practice runs counter to the Supreme Court’s ruling in the Citizens United case. Justice Anthony M. Kennedy wrote in his majority opinion that voters would be able to “whether elected officials are ‘in the pocket’ of so-called moneyed interests,” thanks to disclosure requirements.

“This effectively nullifies that,” Maguire said.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletter.

Photo: “kaje_yomama” via Flickr

Why Is The Cuomo Administration Automatically Deleting State Employees’ Emails?

by Theodoric Meyer, ProPublica.

This story was co-published with the Albany Times-Union and WNYC.

New York governor Andrew M. Cuomo’s administration — which the governor pledged would be the most transparent in state history — has quietly adopted policies that allow it to purge the emails of tens of thousands of state employees, cutting off a key avenue for understanding and investigating state government.

Last year, the state started deleting any emails more than 90 days old that users hadn’t specifically saved — a much more aggressive stance than many other states. The policy shift was first reported by the Albany Times-Union.

A previously unpublished memo outlining the policy raises new questions about the state’s stated rationale for its deletions policy. What’s more, the rules on which emails must be retained are bewilderingly complex — they fill 118 pages — leading to further concern that emails may not be saved at all.

“If you’re aggressively destroying your email, it looks like you’re trying to hide something,” said Benjamin Wright, a Dallas lawyer who has advised companies and government agencies on records retention.

ProPublica obtained the memo through a public records request.

In the June 18, 2013, memo, Karen Geduldig, the general counsel of the state’s Office of Information Technology Services, described New York’s decision to automatically delete emails as a way to cut down on the state’s “enormous amount of email data.”

But the state implemented the policy as part of a move to Microsoft’s Office 365 email system, which offers 50 gigabytes of space per email user — enough to store hundreds of thousands or even millions of emails for each state worker. The state’s version of Office 365 also offers unlimited email archiving.

The Office of Information and Technology Services declined to comment on the record. An official in the office said even though the state can store large quantities of email, it can still be difficult to manage.

“Just because you have a big house doesn’t mean you have to shove stuff in it,” the official said.

Geduldig’s memo also pointed out that some federal government agencies and corporations automatically purge employees’ email. “Such a system will aid the state in improving its email management,” Geduldig wrote.

But many states take a different tack.

Florida, for instance, requires state employees to keep routine administrative correspondence for at least three years, and emails dealing with policy development for at least five years. Connecticut requires employees to keep routine emails for at least two years. Washington State requires workers to keep emails dealing with public business for two years, and emails to and from top officials for four years. Those states also do not automatically delete email.

“It shouldn’t be an automatic process,” said Russell Wood, the records manager for the Washington State Archives. “There should be some point of review in there.”

Emails that qualify as “records” are supposed to be preserved under New York’s policy. But determining which emails qualify and which don’t — a task left up to individual state employees — can be mind-numbingly complicated.

The state’s rules include 215 different categories of records — including two separate categories dealing with office supplies.

“We don’t think it’s plausible at all that agency personnel are going to meticulously follow” those rules, said John Kaehny, the executive director of the good-government group Reinvent Albany. If the rules for preservation aren’t followed, emails will be purged by default.

The length of time emails are required to be kept varies by category. Any emails related to “human rights training,” for instance, must be kept for six years. Emails concerning “agency fiscal management” must be kept for three years. Emails about “the development of internal administrative policies and procedures” must be kept for a year, but emails “used to support administrative analysis, planning and development of procedures” can be deleted as soon as they’re “obsolete,” according to the rules.

The governor’s office has its own rules detailing which emails must be saved, with 55 categories, from emails of weekly reports to emails “related to Native-American affairs.” Anything that doesn’t fall into one of the categories “should be deleted” once they’ve been opened, the governor’s office advises.

There is no internal or external watchdog to make sure the rules are being followed, Kaehny said.

The state also doesn’t have a standardized system for preserving emails that do have to be saved, according to the Office of Information Technology Services official. State workers can save their emails by printing them out, pasting them into Microsoft Word documents or placing them in a special folder in the email program itself.

“Everyone does it differently, and some people are still learning how to do it,” the official said.

Emails related to potential litigation and freedom of information requests are not supposed to be deleted under New York State’s policy. But Karl Olson, a San Francisco lawyer who has represented news outlets including the Los Angeles Times in freedom of information lawsuits, said that deleting emails after such a short period of time might mean they’re gone by the time reporters need to request them.

“It may take a while for evidence of misconduct to bubble to the surface,” Olson said.

Emily Grannis, a fellow with the nonprofit Reporters Committee for Freedom of the Press, said New York’s automatic deletion policy “strikes me as inconsistent with the goals of [freedom of information] laws, and to have such a short timeframe is particularly troubling.”

Government agencies often adopt deletion policies to help protect themselves from potential lawsuits and freedom of information requests, said Mark Diamond, the chief executive of Contoural, a records management consulting firm. Getting rid of emails after 90 days, though, risks deleting correspondence that employees might need down the road. “I don’t think it’s a well-thought-out strategy,” he said.

Cuomo’s aides have also developed a reputation for using their personal email accounts to conduct state business — a move that can make it more difficult to seek the emails under the state’s freedom of information law. The Cuomo administration has denied that it does so, but a ProPublica reporter and others have, in fact, received such emails from officials.

New York isn’t the only state that destroys unsaved email after 90 days.

California’s governor’s office, for instance, has automatically deleted employees’ sent and received email after 90 days for more than a decade. But the office also requires employees to save far more than in New York, including official correspondence, memos, scheduling requests and other documents.

If you have information about or experience with the state’s email deletion policy, please contact Theo Meyer at theo.meyer@propublica.org.

Related articles: Read our coverage of how Cuomo administration officials have used their private email accounts for public business, and how the administration has denied that it does so.

Justin Elliott contributed reporting.

Photo: Pat Arnow via Flickr

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Cuomo Has Raised Millions Through Loophole He Pledged To Close

by Theodoric Meyer, ProPublica.

When he ran for office four years ago, New York Gov. Andrew M. Cuomo pledged to close a loophole in the state’s campaign finance regulations allowing corporations and individuals to pour unlimited amounts of money into politics.

Instead, he’s become the loophole’s biggest beneficiary.

New York State forbids corporations from giving more than $5,000 a year to candidates and political committees. But limited liability companies — businesses that share attributes of corporations and partnerships — are allowed to give up to $60,800 to a statewide candidate per election cycle and up to $150,000 a year to candidates and committees overall. What’s more, corporations and individuals can set up an unlimited number of LLCs through which to donate, making the caps effectively meaningless.

Cuomo took contributions from LLCs while running for governor in 2010, but said at the time that he was only accepting them so that he could get elected and change the law. He has twice proposed legislation that would eliminate the LLC exception, most recently in his budget proposal in January, but it hasn’t been enacted. He told reporters Wednesday that there was little chance any campaign finance reforms would pass before the legislative session ends next week.

Cuomo has accepted more than $6.2 million from LLCs in the three and a half years since he took office, according to a ProPublica analysis of state campaign finance filings. That’s more than double the amount his two predecessors, Eliot Spitzer and David Paterson, took in during their combined four years in office. The contributions make up a sizeable chunk of the $33 million Cuomo has reported raising for his re-election campaign. (The data reflects contributions reported through mid-January, when candidates last filed disclosure reports.)

In a statement, Cuomo spokesman Matthew Wing offered this to explain the apparent contradiction: “The Cuomo campaign is following existing campaign finance laws, while the governor is leading the charge to reform them, including closing the loophole for LLCs.”

That’s of little consolation to campaign finance watchdogs concerned that those who have — or are seeking to have — business with New York are continuing to use this wrinkle in the state’s contribution rules to exert their influence. Much of the money coming to Cuomo through LLCs appears to be from real estate developers, with cable companies and liquor distributors among those also providing healthy cash infusions.

“This is a gaping hole,” said Dick Dadey, the executive director of Citizens Union, a New York good-government group. Getting rid of it is “an easy fix that would turn the spigot down a bit of the flow of money from big contributors.”

It’s not always immediately apparent who controls the LLCs making the contributions. Some, like Time Warner NY Cable LLC, have familiar names. But many LLCs don’t give much of a clue as to who’s behind the money. Some controlled by real estate interests are named for streets or addresses — Arwin 88th Street LLC or 134 W 58 LLC — that require some digging to connect the dots.

Cuomo has also taken far more from LLCs since his election than any other New York State politician or committee. Attorney General Eric Schneiderman has accepted about $1 million from LLCs since 2011, according to ProPublica’s analysis. The Senate Republican Campaign Committee has received about $851,000, while the Democratic Senate Campaign Committee has totaled about $172,000.

New York’s rules for political giving by LLCs are among the loosest in the nation.

Federal regulations generally bar LLCs, along with corporations and unions, from giving directly to federal candidates. The rules vary at the state level — at least six states allow unlimited contributions from all types of donors, while others ban donations from corporations and other businesses entirely. But few states have carved out exceptions for LLCs as generous as New York’s.

Maryland and the District of Columbia passed legislation to close their versions of the LLC loophole last year.

Cuomo has repeatedly called for tightening New York’s campaign finance limits since his election. After lawmakers failed to pass the ethics reforms he proposed last year — including closing the LLC loophole — Cuomo formed a Moreland Commission to investigate corruption and recommend new campaign finance laws.

The commission’s preliminary report, released in December, illustrated how companies use LLCs to avoid contribution limits. A “representative string of emails” subpoenaed by investigators included “a lively discussion among members of an organization about which of the organization’s LLCs should be used to make a round of outsized contributions, based upon which ones had already given outsized contributions in the past,” the report said. The commission recommended closing the loophole, among other reforms.

Instead, the loophole survived when Cuomo announced in March that he was shutting down the Moreland Commission. Lawmakers had agreed to adopt new bribery and anti-corruption measures, he said, so there was no longer a need for it.

But that halted the panel’s investigation into potential campaign finance abuses by LLCs.

“The commission was not given the time to accomplish what it was charged with doing,” said Richard Briffault, a Columbia Law School professor who served on the commission. “None of the investigations had time to be completed.”

Of the LLCs giving to Cuomo, the most generous are controlled by Glenwood Management, a real estate development company headquartered on Long Island. Headed by Leonard Litwin, a reclusive 99-year-old magnate, Glenwood has given $800,000 to Cuomo since he took office using 19 separate LLCs. Glenwood’s LLCs have also given millions of dollars to other New York candidates and committees, both Democratic and Republican.

Another real estate developer, the Extell Development Co., has also given extensively to Cuomo through LLCs, including two donations last year that were flagged by the Moreland Commission.

Two LLCs affiliated with Extell gave the governor a total of $100,000 on Jan. 28, 2013 — two days before Cuomo signed legislation that granted a tax break to Extell’s One57 skyscraper in Manhattan, as well as properties owned by four other developers. Two other LLCs with ties to Extell gave Cuomo another $100,000 six months later. (The contributions were first reported last year by The Daily News.)

“While we do not comment on any specific campaign contributions, we categorically deny any quid pro quo between contributions and legislation,” Anna LaPorte, a spokeswoman for Extell, said in a statement to ProPublica. “Any suggestion to the contrary is an attempt to inhibit our constitutional right to have our voice heard on public policy issues.”

There is no evidence that Cuomo played any role in inserting the tax breaks. Without naming Extell or Cuomo, however, the Moreland Commission called out the developers’ donations, saying they created “the appearance of a relationship between large donations and legislation that specifically benefits large donors.”

“Our investigation continues and we draw no premature conclusions” about whether the tax breaks were improper, the commission wrote in its December report, “but it is clear that the combination of very large campaign contributions and very narrowly targeted benefits to those same donors creates an appearance of impropriety that undermines public trust in our elected representatives.”

Real estate interests may take advantage of the LLC loophole partly because of the way their businesses are structured. Developers typically keep each of their properties in a separate LLC to limit their legal liability, giving them plenty of LLCs with which to write checks to politicians.

“There is a lot of business they have before Albany,” said Bill Mahoney, the research coordinator for the New York Public Interest Research Group, “and this is one way for them to buy more access than other folks.”

Indeed, other businesses with huge stakes in New York have used LLCs to write outsized checks to Cuomo.

Since the governor took office, Time Warner Cable has contributed more than $60,000 to him through its LLC; LLCs affiliated with Cablevision have given $110,000. Two liquor distributors, Empire Merchants LLC and Empire Merchants North LLC, have given over $120,000. And two LLCs affiliated with the Ultimate Fighting Championship have contributed $115,000 to Cuomo, plus tens of thousands of dollars more to state legislators and political committees.

Cuomo has not proposed any legislation to legalize professional mixed martial arts events in New York, the only state that bans them. But almost a year after he received a $50,000 check from one of the LLCs, Cuomo seemed to come out in favor of overturning the ban.

“I think we need economic activity, especially in upstate New York,” he said in a radio interview in 2013. “I think this is a major endeavor that is televised, that is happening all over the country at this point. You’re not going to stop it from happening. And I’m interested in the potential economic potential for the state.”

Wing, the Cuomo spokesman, said there was no connection between the governor’s comments and the contributions.

Photo: Pat Arnow via Flickr

IRS Pushes Back New Rules for Dark Money Groups

by Theodoric Meyer, ProPublica.

After intense criticism from both ends of the political spectrum, the Internal Revenue Service has delayed indefinitely proposed rules that would have imposed new limits on social welfare nonprofits, which have pumped hundreds of millions of dollars from anonymous donors into recent elections.

The agency said yesterday it would postpone a hearing on the proposal it released in November defining more clearly what constitutes political activity for such groups, and would revise the plan to reflect some of the more than 150,000 comments it triggered.

Officials put no timeline on the process, disappointing those who had hoped the new regulations might kick in before this year’s midterm elections.

“I think it’s unfortunate that new rules will be delayed even further and that we’re going through another election cycle” without them, said Paul S. Ryan, senior counsel with the Campaign Legal Center.

Others called the delay a prudent step that would give the IRS an opportunity to get a crucial change right.

“They’re not going to put out some slapdash rule just to check it off their list,” said John Pomeranz, a Washington lawyer who works with nonprofits that spend money on politics. He doesn’t expect the agency to finish the rules any time soon. “I think we’ll be lucky if they’re in place for the 2016 election.”

Social welfare nonprofits have poured money into politics since the Supreme Court’s Citizens United decision in 2010, which allowed corporations, unions and nonprofits to spend unlimited money on elections.

Social welfare nonprofits spent more than $256 million in the 2012 cycle alone, according to the Center for Responsive Politics. Campaign finance watchdogs have viewed their rise with concern, fearing the influence of so-called “dark” money from secret donors, and had called for more oversight from the IRS.

Under IRS regulations, the groups can spend some of their resources on politics, but must devote themselves mostly to social welfare to keep their nonprofit status. But the rules defining what is and isn’t politics are murky.

Late last year, the IRS moved to clarify the issue, but its proposal came under fire from both the left and the right.

Conservatives complained that the rules would stifle political speech. The American Civil Liberties Union chafed at a provision in the proposed rules that would prevent nonprofits from backing ads that even mentioned politicians in the two months before a general election.

“We have no doubt that the Service is acting with the best of intentions, but the proposed rule threatens to discourage or sterilize an enormous amount of political discourse in America,” the ACLU said in its written response to the proposal.

The plan was also criticized for impeding nonpartisan election work such as voter registration drives and get-out-the-vote efforts.

The IRS, still facing fallout from accusations that it singled out the applications of conservative nonprofits for special scrutiny in the run-up to the 2012 election, decided it would make revisions.

“Given the diversity of views expressed and the volume of substantive input, we have concluded that it would be more efficient and useful to hold a public hearing after we publish the revised proposed regulation,” the agency said in statement.

Photo via Wikimedia Commons

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Senate To Take Up Longshot Amendment To Regulate Campaign Finance

by Theodoric Meyer, ProPublica.

In a gesture probably more symbolic than practical, the Senate may soon take up a constitutional amendment to give Congress and states the power to regulate political contributions and spending.

At a Senate Rules Committee hearing Wednesday on the influence of so-called “dark money” groups, nonprofits that don’t have to report their donors for election spending, Senator Chuck Schumer, a New York Democrat, said Democrats would soon bring the amendment up for a vote.

The amendment, introduced last year by Senator Tom Udall, a New Mexico Democrat, would allow Congress to limit contributions and spending by campaigns, as well as by SuperPACs and dark money groups. States would be allowed to pass their own regulations.

The amendment could be the only way to reverse the impact of Supreme Court decisions that have struck down some limits on contributions by corporations, unions, nonprofits and individuals to both outside groups and, more recently, to political parties.

“It’s now crystal clear to me that an amendment to the Constitution is necessary to allow meaningful campaign finance rules,” Udall said on Wednesday.

The amendment has little chance of passing, however, as it needs the support of 67 senators. Republicans are unlikely to vote for it. Many conservatives see limits on campaign finance as limits on free speech. Conservatives also have benefited more from the gusher of outside money so far.

Predictably, the hearing on Wednesday reinforced the sharp divisions between Republicans and Democrats on campaign finance.

Schumer, Udall and Senator Amy Klobuchar of Minnesota, Democrats on the committee who were at the hearing, called for new campaign finance restrictions. And Senator Angus King, the Maine independent who led the hearing and who often votes with Democrats, was particularly critical of dark money groups, the social welfare nonprofits and trade associations that can spend money on elections without disclosing their donors.

“In Maine, we have town meetings every spring,” King said. “Nobody’s allowed to go to a Maine town meeting with a bag over their head.”

But Senator Pat Roberts of Kansas, the ranking Republican on the committee, spoke out against new regulations as restrictions on free speech, pointing to a plaque he had brought displaying the text of the First Amendment.

“Let’s stop this fool’s errand of speech regulation,” he said.

At issue isn’t simply speech — it’s whether who’s behind that speech should be identified. Disclosure is something that many courts have said is paramount. The Supreme Court’s Citizens United ruling, for example, said that corporations, unions and nonprofits could spend unlimited money on outside election ads. Justice Anthony M. Kennedy said the influx of that money would not corrupt elections because of laws requiring outside groups to disclose their donors.

ProPublica and other news outlets have written extensively, however, about the many ways groups have used to avoid this kind of transparency. In 2012 alone, social welfare nonprofits and trade associations dumped more than $310 million into the election. Who are the donors? Who knows?

As the Center for Responsive Politics reported Wednesday, the 2014 election is so far shaping up to involve more dark money than any election to date. And Democrats are narrowing the gap with Republicans, who have typically spent much more through dark money groups.

Senator Ted Cruz of Texas, the other Republican who attended the hearing Wednesday, addressed the disclosure issue, at least partly. He called for allowing unlimited contributions to candidates followed by immediate disclosure of who gave the money. But Cruz did not say whether he also supported such disclosures by dark money groups.

A slate of campaign finance experts testified before the committee, including former Supreme Court Justice John Paul Stevens, who wrote the dissenting opinion in the Citizens United case before his retirement in 2010 and recently authored a book proposing a constitutional amendment to limit political spending.

In an interview with ProPublica after the hearing, King said he imagined Democrats would try to bring Udall’s amendment to the floor this summer but acknowledged that passing it would be difficult. He said he is more focused on passing legislation to require more campaign finance disclosure.

“I know there are Republicans who are interested in this issue and have expressed it,” he said.

He declined, however, to name them.

Photo: Center for American Progress Action Fund via Flickr

New Study Finds High Levels Of Arsenic In Groundwater Near Fracking Sites

by Theodoric Meyer, ProPublica

A recently published study by researchers at the University of Texas at Arlington found elevated levels of arsenic and other heavy metals in groundwater near natural gas fracking sites in Texas’ Barnett Shale.

While the findings are far from conclusive, the study provides further evidence tying fracking to arsenic contamination. An internal Environmental Protection Agency PowerPoint presentation recently obtained by the Los Angeles Times warned that wells near Dimock, Pa., showed elevated levels of arsenic in the groundwater. The EPA also found arsenic in groundwater near fracking sites in Pavillion, Wyo., in 2009 — a study the agency later abandoned.

ProPublica talked with Brian Fontenot, the paper’s lead author, about how his team carried out the study and why it matters. (Fontenot and another author, Laura Hunt, work for the EPA in Dallas, but they conducted the study on their own time in collaboration with several UT Arlington researchers.) Here’s an edited version of our interview:

What led you guys to do the study?

We were sort of talking around lunch one day, and came up with the idea of actually going out and testing water in the Barnett Shale. We’d heard all the things that you see in the media, all the sort of really left-wing stuff and right-wing stuff, but there weren’t a whole lot of answers out there in terms of an actual scientific study of water in the Barnett Shale. Our main intent was to bring an unbiased viewpoint here — to just look at the water, see if we could find anything, and report what we found.

What kind of previous studies had been done in this vein?

The closest analog that I could find to our type of study are the things that have been done in the Marcellus Shale, with Rob Jackson’s group out at Duke University. Ours is set up very similarly to theirs in that we went out to private landowners’ wells and sampled their water wells and assayed them for various things. We decided to go with a list of chemicals thought to be included in hydraulic fracturing that was actually released in a congressional report. Our plan was to sample everyone’s water that we could, and then go through that list of these potential chemical compounds within the congressional list.

How did you do it?

We were able to get a press release put out from UT Arlington that went into the local newspapers that essentially called for volunteers to be participants in the study. For being a participant, you would get free water testing, and we would tell them our results. We were upfront with everyone about, you know, we don’t have a bias, we’re not anti-industry, we’re not pro-industry. We’re just here to finally get some scientific data on this subject. And we had a pretty overwhelming response.

From there we chose folks that we would be able to get to. We had to work on nights and weekends, because we had an agreement with EPA to work on this study outside of work hours. So we spent quite a few weekend days going out to folks who had responded to our call and sampling their water. But that wasn’t quite enough. We also had to get samples from within the Barnett Shale in areas where fracking was not going on, and samples from outside the Barnett Shale where there’s no fracking going on, because we wanted to have those for reference samples. For those samples we went door-to-door and explained to folks what our study was about.

We have people that were pro-industry that wanted to participate in this study to help out — saying, you know, ‘You’re not going to find anything and I’m going to help you prove it.’ And we also had folks that were determined to find problems. We have the whole gamut of folks represented in our study.

We would take a water well, and we would go directly to the head, the closest we could get to the actual water source coming out of the ground, and we would purge that well for about 20 minutes. That ensures that you’re getting fresh water from within the aquifer. So we didn’t take anything from the tap, and nothing that had been through any kind of filtration system. This was as close to the actual groundwater as we could get. We took some measurements, and then we took several samples back to UT Arlington for a battery of chemistry analyses. That’s where we went through and looked for the various volatile organic compounds and heavy metals and methanols and alcohols and things like that.

What did you find?

We found that there were actually quite a few examples of elevated constituents, such as heavy metals, the main players being arsenic, selenium, and strontium. And we found each of those metals at levels that are above EPA’s maximum contaminate limit for drinking water.

These heavy metals do naturally occur in the groundwater in this region. But we have a historical dataset that points to the fact that the levels we found are sort of unusual and not natural. These really high levels differ from what the groundwater used to be like before fracking came in. And when you look at the location of the natural gas wells, you find that any time you have water wells that exceed the maximum contaminate limit for any of these heavy metals, they are within about three kilometers of a natural gas well. Once you get a private water well that’s not very close to a natural gas well, all of these heavy metals come down. But just because you’re close to a natural gas well does not mean you’re guaranteed to have elevated contaminate levels. We had quite a few samples that were very close to natural gas wells that had no problems with their water at all.

We also found a few samples that had measurable levels of methanol and ethanol, and these are two substances that don’t naturally occur in groundwater. They can actually be created by bacterial interactions underwater, but whenever methanol or ethanol occur in the environment, they’re very fleeting and transient. So for us to be able to actually randomly take a grab sample and detect detectable methanol and ethanol — that implies that there may be a continuous source of this.

You found levels of arsenic in areas with fracking that were almost 18 times higher than in areas without fracking or in the historical data. What would happen to someone who drank that water?

Arsenic is a pretty well-known poison. If you experience a lot of long-term exposure to arsenic, you get a lot of different risks, like skin damage, problems with the circulatory system or even an increased risk of cancer. The levels that we found would not be a lethal dose, but they’re certainly levels that you would not want to be exposed to for any extended period of time.

What about the other stuff you found?

The heavy metals are a little bit different because they are known to be included in some fracking recipes. But they’re also naturally occurring compounds. We think the problem is that they’re becoming concentrated at levels that aren’t normal as a result of some aspect of natural gas extraction.

We’re not necessarily saying that fracking fluid is getting out. We don’t have any evidence of that. But there are many other steps involved, from drilling the hole to getting the water back out. A lot of these can actually cause different scenarios whereby the naturally occurring heavy metals will become concentrated in ways they normally wouldn’t. For example, if you have a private water well that’s not kept up well, you’ll have a scale of rust on the inside. And if someone were to do a lot of drilling nearby, you may find some pressure waves or vibrations that would cause those rust particles to flake out into the water. Arsenic is bound up inside that rust, and that can actually mobilize arsenic that would never be in the water otherwise.

Methanol and ethanol are substances that should not be very easy to find in the groundwater naturally. We definitely know that those are on the list of things that are known to be in hydraulic fracturing fluid. But we were unable to actually sample any hydraulic fracturing fluid, so we can’t make any claims that we have evidence fluids got into the water.

Have you talked with the homeowners whose wells you sampled?

We have shown those homeowners the results. I think most of the folks that had high levels of heavy metals were not necessarily surprised.  You hear so much I think maybe they were expecting it to come back with something even more extreme than that. I don’t want to say they were relieved, but I think they all sort of took the news in stride and realized, ‘OK, well, as a private well owner, there’s no state or federal agency that provides any kind of oversight or regulation.’ So it’s incumbent on that well owner to get testing done and get any kind of remediation.

Do you think fracking is responsible for what you found?

Well, I can’t say we have a smoking gun. We don’t want the public to take away from this that we have pegged fracking as the cause of these issues. But we have shown that these issues do occur in close relation, geographically, to natural gas extraction. And we have this historical database from pretty much the same exact areas that we sampled that never had these issues until the onset of all the fracking. We have about 16,000 active wells here in the Barnett Shale, and that’s all popped up in about the last decade, so it’s been a pretty dramatic increase.

We noticed that when you’re closer to a well, you’re more likely to have a problem, and that today’s samples have problems, while yesterday’s samples before the fracking showed up did not. So we think that the strongest argument we can say is that this needs more research.

Photo: greensefa via Flickr.com

Using Outdated Data, FEMA Is Wrongly Placing Homeowners In Flood Zones

by Theodoric Meyer ProPublica.

When Donna Edgar found out that new flood maps from the Federal Emergency Management Agency would place her house in a high-risk flood zone, she couldn’t believe it.

Her home, on the ranch she and her husband own in Texas hill country about 60 miles north of Austin, sits well back from the nearby Lampasas River.

“Her house is on a hill,” said Herb Darling, the director of environmental services for Burnet County, where Edgar lives. “There’s no way it’s going to flood.”

Yet the maps, released last year, placed the Edgars in what FEMA calls a “special flood hazard area.” Homeowners in such areas are often required, and always encouraged, to buy federal flood insurance, which the Edgars did.

FEMA eventually admitted the maps were wrong. But it took Edgar half a dozen engineers (many of whom volunteered their time), almost $1,000 of her own money and what she called an “ungodly number of hours” of research and phone calls over the course of a year to prove it.

Edgars is far from alone.

From Maine to Oregon, local floodplain managers say FEMA’s recent flood maps — which dictate the premiums that 5.5 million Americans pay for flood insurance — have often been built using outdated, inaccurate data. Homeowners, in turn, have to bear the cost of fixing FEMA’s mistakes.

“It’s been a mess,” Darling said. “It’s been a headache for a lot of people.”

Joseph Young, Maine’s floodplain mapping coordinator, said his office gets calls “almost on a daily basis” from homeowners who say they’ve been mapped in high-risk flood areas in error. More often than not, he said, their complaints have merit. “There’s a lot of people who have a new map that’s unreliable,” he said.

Maps built with out-of-date data can also result in homeowners at risk of flooding not knowing the threat they face.

FEMA is currently finalizing new maps for Fargo, ND, yet the maps don’t include any recent flood data, said April Walker, the city engineer, including from when the Red River overran its banks in 1997, 2009 and 2011. Those floods were the worst in Fargo’s history.

Fargo has more recent data, Walker said, but FEMA hasn’t incorporated it.

It’s unclear exactly how many new maps FEMA has issued in recent years are at least partly based on older data. While FEMA’s website allows anybody to look up flood maps for their areas, the agency’s maps don’t show the age of the underlying data.

FEMA’s director of risk analysis, Doug Bellomo, said it was “very rare” for the agency to digitize the old paper flood maps without updating some of the data. “We really don’t go down the road” of simply digitizing old maps, he said.

FEMA did not respond to questions about the maps for Fargo or other specific areas.

State and local floodplain officials pointed to examples where FEMA had issued new maps based at least in part on outdated data. The reason, they said, wasn’t complicated.

“Not enough funding, pure and simple,” Young said.

Using new technology, FEMA today is able to gather far more accurate elevation data than it could in the 1970s and 1980s, when most of the old flood maps were made. Lidar, in which airplanes map terrain by firing laser pulses at the ground, can provide data that’s 10 times more accurate than the old methods.

Lidar is also expensive. Yet as we’ve reported, Congress, with the support of the White House, has actually cut map funding by more than half since 2010, from $221 million down to $100 million this year.

With limited funding, FEMA has concentrated on updating maps for the populated areas along the coasts. In rural areas, “it’s sort of a necessary evil to reissue maps with older data on them,” said Sally McConkey, an engineer with the Illinois State Water Survey at the University of Illinois at Urbana-Champaign, which has a contract with FEMA to produce flood maps in the state.

When old maps are digitized, mapmakers try to match up road intersections visible on them with the ones seen in modern satellite imagery (similar to what you can see using Google Earth). But the old maps and the new imagery don’t always line up correctly, leading to what Alan R. Lulloff, the science services program director with the Association of State Floodplain Managers, called a “warping” effect.

“It can show areas that are actually on high ground as being in the flood hazard area when they’re not,” he said. “That’s the biggest problem.”

When FEMA issued new maps last year for Livingston Parish in Louisiana, near Baton Rouge, they included new elevation data. But the flood studies, said Eddie Aydell III, the chief engineer with Alvin Fairburn in Denham Springs, La., who examined the maps, were “a conglomeration of many different ancient engineering studies” dating from the 1980s to 2001. The mapmakers did not match up the new elevation data with the older data correctly, he said, making structures in the parish seem lower than they really are.

“It’s going to be a nightmare for the residents of our parish,” he said.

Bonnie Marston’s parents, Jim and Glynda Childs, moved to Andover, Maine, where Marston lives with her husband, in 2010 with the intention of building a house. But when they applied for a loan the bank told them that FEMA’s new flood maps for the county, issued the year before, had placed the land on which they planned to build in a special flood hazard area. The cost: a $3,200 annual flood insurance bill, which the Childs had to pay upfront.

Marston spent about $1,400 to hire a surveyor, who concluded her parents did not belong in a special flood hazard area. FEMA eventually removed the requirement for them to buy flood insurance — though it didn’t actually update the map. The bank refunded the flood insurance premium, but Marston said FEMA wouldn’t refund the cost of the survey.

“In my mind it’s a huge ripoff,” Marston said.

Edgar, 68, a retired IBM software developer, said she couldn’t understand why FEMA thought her house was suddenly at risk of flooding. When she called FEMA and asked, she said the agency couldn’t tell her.

“They just said, ‘You need to buy flood insurance,'” she said, and told her she could apply for what’s known as a letter of map amendment if she thought she’d been mapped into a special flood hazard area in error. She worried that being in a high-risk flood area would diminish the value of her home.

Her husband, Thomas, a professor of chemical engineering at the University of Texas at Austin, knew David R. Maidment, a civil engineering professor there who is an expert on flood insurance mapping. While she hired a surveyor and wrangled with FEMA, Maidment and several of his Ph.D. students drove up to the ranch to study it as a class project.

The experience, Maidment said, showed him “in a very small microcosm” the importance of using up-to-date elevation data in new maps. The Texas state government paid to map Burnet County, where the Edgars’ ranch is located, in 2011 using lidar. But FEMA’s new maps for the county don’t include the lidar data.

FEMA removed the Edgars from the special flood hazard area in March, but again it hasn’t actually changed the maps. Letters of map amendment acknowledge that FEMA’s maps were incorrect without actually changing them. While the Edgars don’t have to buy flood insurance, the new, inaccurate maps remain.

Darling, the county’s director of environmental services, said he had gotten calls from dozens of homeowners with similar complaints about the new flood maps.

“We’ve still got ’em coming in,” he said.

The contractor that created the new maps appeared to have taken shortcuts in drawing them, Darling said. Without new lidar data, he added, issuing a new map is “just a waste of money.”

The experience, Edgar said, had left her feeling deeply frustrated, as a both homeowner and a taxpayer. FEMA hasn’t reimbursed her for the surveying costs or for the flood insurance premium she and her husband paid. “It falls to the homeowner to hire a professional engineer and pay” hundreds, even thousands, “to disprove what I would call their shoddy work,” she said. “I don’t think that’s fair.”

Have you experienced problems with FEMA’s flood maps firsthand? Let us know.

Photo: U.S. Geological Survey via Flickr.com

As Need For New Flood Maps Rises, Congress And Obama Cut Funding

by Theodoric Meyer, ProPublica

As the United States grows warmer and extreme weather more common, the federal government’s flood-insurance maps are becoming increasingly important.

The maps, drawn by the Federal Emergency Management Agency (FEMA), dictate the monthly premiums millions of American households pay for flood insurance. They are also designed to give homeowners and buyers the latest understanding of how likely their communities are to flood.

The government’s response to the rising need for accurate maps? It’s slashed funding for them.

Congress has cut funding for updating flood maps by more than half since 2010, from $221 million down to $100 million this year. And the president’s latest budget request would slash funding for mapping even further to $84 million — a drop of 62 percent over the last four years.

In a little-noticed written response to questions from a congressional hearing, FEMA estimated the cuts would delay its map program by three to five years. The program “will continue to make progress, but more homeowners will rely on flood hazard maps that are not current,” FEMA wrote.

The cuts have slowed efforts to update flood maps across the country.

In New England, for instance, FEMA is updating coastal maps but has put off updating many flood maps along the region’s rivers, said Kerry Bogdan, a senior engineer with FEMA’s floodplain mapping program in Boston.

“Unfortunately, without the money to do it, we’re limited and our hands are kind of tied,” she said.

Many of the flood maps in Vermont — including areas near Lake Champlain that have recently flooded — are decades out of date. “There are definitely communities that really need that data,” said Ned Swanberg, the flood-hazard mapping coordinator with Vermont’s Department of Environmental Conservation.

Asked about the cuts, a spokesman for the White House’s Office of Management and Budget directed us to  FEMA, which did not respond to our requests for comment.

New maps can guide development toward areas that are less likely to flood. They also tend to be far more accurate. Today’s mapmakers can take advantage of technologies including lidar, or laser radar, and ADCIRC, a computer program that’s used to model hurricane storm surge. They can also incorporate more years of flooding data into their models.

“It is disconcerting to have counties and areas where people still have maps from the 1970s,” said Suzanne Jiwani, a floodplain mapping engineer with Minnesota’s Department of Natural Resources.

The slashed funding for the mapping program hasn’t gone unnoticed in Congress.

Rep. David E. Price, a North Carolina Democrat on the House Appropriations subcommittee that is responsible for FEMA’s budget, told W. Craig Fugate, the FEMA administrator, at a hearing in March of 2012 that FEMA’s budget “continues to lowball funding” for updating the country’s flood maps.

“Both Republican and Democratic administrations have generally made inadequate requests for Flood Hazard Mapping and Risk Analysis funding, and under the Republican majority, funding provided has been inadequate,” Price said in a statement to ProPublica.

Andrew High, a spokesman for Price, said the congressman had pushed for a modest boost in funding, about $10 million this year.

It was a question from Price that prompted FEMA to detail the delays. FEMA said its ultimate goal was to get 80 percent of the country’s flood hazard data up to date. Cutting funding for the program “is a difficult decision,” FEMA wrote, “but it’s reasonable given the multitude of competing national priorities and limited resources.”

FEMA also funds its maps through the National Flood Insurance Program. It takes a small slice of homeowners’ flood insurance premiums, about $150 million in the 2013 fiscal year. But the flood insurance program is also in trouble, and income from the premiums is already stretched thin. The program has more than $20 billion in debt after paying out massive claims after Katrina and Sandy, and it took in only $3.6 billion in premiums last year.

As part of an overhaul to the insurance program last year, Congress authorized the government to spend $400 million a year for the next five years to update flood maps. But for the 2013 fiscal year, Congress has appropriated just a quarter of that. Sequestration has cut another $5 million, according to the Office of Management and Budget, leaving $95 million for flood mapping this year.

That’s not nearly enough, said Larry Larson, director emeritus of the Association of State Floodplain Managers, a trade organization based in Madison, WI.

“To get the mapping done, you need probably $400 million a year for 10 years,” Larson said.

The experiences of some homeowners after Sandy illustrate the dangers of outdated flood maps.

FEMA was in the process of updating the maps in New York City and New Jersey when Sandy hit. After the storm, the agency rushed to complete “advisory” flood maps designed to give homeowners a rough idea of by how much they might need to raise their damaged homes to avoid catastrophically high flood insurance premiums — more than $30,000 a year for some homeowners in the worst flood zones.

But homeowners like George Kasimos, whose Toms River, NJ house was damaged in the storm, say they don’t want to shell out tens of thousands of dollars to raise their homes until FEMA has finalized the new maps. FEMA plans to release preliminary maps for New Jersey this summer, but the final ones aren’t expected until late next year. (Scott Duell, the risk analysis chief for FEMA in New York, said that the cuts had not slowed down work on the new maps in New York and New Jersey.)

Kasimos said any cuts to the flood-mapping program were shortsighted.

“There’s going to be another hurricane somewhere, there’s going to be another disaster,” he said. “If you’re cutting the flood-mapping program, somebody’s going to get screwed.”

AP Photo/U.S. Air Force, Master Sgt. Mark C. Olsen

 

What Went Wrong In West, Texas — And Where Were The Regulators?

texas plant explosion

AP Photo/Andy Bartee

by Theodoric Meyer, ProPublica.

April 25: This post has been corrected.

A week after a blast at a Texas fertilizer plant killed at least 15 people and hurt more than 200, authorities still don’t know exactly why the West Chemical and Fertilizer Company plant exploded.

Here’s what we do know: The fertilizer plant hadn’t been inspected by the Occupational Safety and Health Administration since 1985. Its owners do not seem to have told the Department of Homeland Security that they were storing large quantities of potentially explosive fertilizer, as regulations require. And the most recent partial safety inspection of the facility in 2011 led to $5,250 in fines.

We’ve laid out which agencies were in charge of regulating the plant and who’s investigating the explosion now.

What happened, exactly?

Around 7:30 p.m. on April 17, a fire broke out at the West Chemical and Fertilizer Company plant in West, Texas, a small town of about 2,800 people 75 miles south of Dallas. Twenty minutes later, it blew up. The explosion shook houses 50 miles away and was so powerful that the United States Geological Survey registered it as a 2.1-magnitude earthquake. It flattened homes within a five-block radius and destroyed a nursing home, an apartment complex, and a nearby middle school.  According to the New York Times, the blast left a crater 93 feet wide and 10 feet deep, and the fire “burned with such intensity that railroad tracks were fused.”

The blast killed at least 15 people, most of them firefighters and other first responders.

Have fertilizer plants ever exploded before?

Yes. A plant in Sergeant Bluff, Iowa, that manufactured ammonium nitrate fertilizer — the same explosive chemical stored in West — exploded on Dec. 13, 1994, killing four people and injuring 18.

But fertilizer plants are safer now, said Stephen Slater, the Iowa administrator of the Occupational Safety and Health Administration. “All kinds of technologies have had huge improvements,” he told the Des Moines Register. “And we haven’t had any bad experiences at the plants in the 20 years since [the accident]. I’m knocking on wood.” (Slater didn’t respond to our requests for comment.)

Who regulates these fertilizer plants?

At least seven different state and federal agencies can regulate Texas fertilizer plants like the one in West: OSHA, the Environmental Protection Agency, the Department of Homeland Security, the U.S. Pipeline and Hazardous Materials Safety Administration, the Texas Department of State Health Services, the Texas Commission on Environmental Quality and the Texas Feed and Fertilizer Control Service.

Some of the agencies don’t appear to have shared information before the blast.

Fertilizer plants that hold more than 400 pounds of ammonium nitrate, for instance, are required to notify the Department of Homeland Security. (Ammonium nitrate can be used to make bombs. It’s what Timothy McVeigh used to blow up the Alfred P. Murrah Federal Building in Oklahoma City in 1995.) The West plant held 270 tons — yes, tons — of the chemical last year, according to a report it filed with the Texas Department of State Health Services, but the plant didn’t tell Homeland Security.

Carrie Williams, a Department of State Health Services spokeswoman, told ProPublica that the agency isn’t required to pass that information — which is also sent to local authorities — on to Homeland Security.

While the exact cause of the explosion is unknown, a federal official told the New York Times that investigators believed it was caused by the ammonium nitrate. The blast crater is in the area of the plant where the chemical was stored.

The plant also filed a “worst-case release scenario” report with the EPA and local officials stating there was no risk of a fire or an explosion. The scenario described an anhydrous ammonia leak that wouldn’t hurt anyone.

Did any of these agencies fail to inspect the plant when they should have?

It’s unclear. OSHA conducted the last full safety inspection of the plant in 1985. “Since then,” the Huffington Post reported, “regulators from other agencies have been inside the plant, but they looked only at certain aspects of plant operations, such as whether the facility was abiding by labeling rules when packaging its fertilizer for sale.”

You can view the full OSHA report here. Since 2011, OSHA has carried out inspections based in part on the level of risk that plants like the one in West reported to the EPA. Since the West plant had told the EPA there was no risk of a fire or an explosion, it wasn’t a priority. The plant also may have been exempt from some inspections as a small employer. An OSHA spokesman told ProPublica that the agency would be investigating whether the plant had such an exemption.

As the Huffington Post also noted, the most recent federal safety inspection of the plant, in 2011, resulted in a $5,250 fine for failing to draft a safety plan for pressured canisters of anhydrous ammonia, among other infractions. (There’s no evidence that anhydrous ammonia played any role in the explosion.)

Why was a plant that stored explosive chemicals allowed to be located so close to a school?

The EPA and other federal agencies actually don’t regulate how close such plants can be to schools, nursing homes and population centers. In Texas, the decision is left up to the local zoning authorities.

A Dallas Morning News investigation in 2008 found that Dallas County residents were “at risk of a toxic disaster because outdated and haphazard zoning has allowed homes, apartments and schools to be built within blocks — in some cases even across the street — from sites that use dangerous chemicals.”

Ed Sykora, who owns a Ford dealership in West and spent a dozen years on the school board and the city council, told the Huffington Post he couldn’t recall the town discussing whether it was a good idea to build houses and the school so close to the plant, which has been there since 1962. “The land was available out there that way; they could get sewer and other stuff that way without building a bunch of new lines,” Sykora said. “There never was any thought about it. Maybe that was wrong.”

Who’s investigating what happened?

OSHA, the EPA and the U.S. Chemical Safety Board are all investigating. But don’t hold your breath waiting for the Chemical Safety Board’s conclusions. The agency is still investigating a blast that killed seven workers at an oil refinery in Washington State three years ago, as well as the Deepwater Horizon oil rig explosion that killed 11 workers in 2010 and sent oil flowing into the Gulf of Mexico for months.

A Center for Public Integrity investigation found that the number of accident reports completed by the Chemical Safety Board had declined dramatically since 2006. Daniel Horowitz, the agency’s managing director, said that the agency was stretched thin and had been asking for more investigators for years.

“Going forward, the owners and employees of Adair Grain and West Fertilizer Co. are working closely with investigating agencies,”Donald Adair, the plant’s owner and a West resident,said in a statement last Friday. “We are presenting all employees for interviews and will assist in the fact finding to whatever degree possible.”

Has Congress introduced any new regulation legislation?

Yes, but it would roll back regulations rather than strengthen them. Eleven representatives — one Democrat and 10 Republicans — sponsored a bill in February that would limit the EPA’s regulatory authority over fertilizer plants. It has been endorsed by industry groups such as the Fertilizer Institute. Kathy Mathers, a spokeswoman for the Fertilizer Institute, told ProPublica that the group supports the bill because it would more clearly spell out how the EPA can regulate the industry.

Correction: An earlier version of this story mistakenly stated two different figures for the number of people killed in the blast. It is at least 15 people.

Everything We Know About What’s Happened Under Sequestration

by Theodoric Meyer, ProPublica.

When the annual White House Easter Egg Hunt faced cancellation this year due to the package of mandatory budget cuts known as sequestration, the National Park Service kicked into high gear. It rescued the event — held since 1878 — with money from “corporate sponsors and the sale of commemorative wooden eggs,” according to The Washington Post.

Other programs haven’t been so lucky. Children in Indiana have been cut from the federally funded Head Start preschool program. Last week, the White House announced furloughs for 480 staffers in the Office of Management and Budget. And cuts to Medicare have forced cancer clinics to turn away thousands of patients who are being treated with drugs the clinics can no longer afford.

We’ve taken a look at what’s actually happened in the six weeks since sequestration took effect.

Remind me, what is sequestration again?

Remember the clash over the debt ceiling back in 2011? When Republicans and President Obama struck a deal to raise it, they created a “super committee” of six Democrats and six Republicans and gave them three and a half months to hash out $1.2 trillion worth of cuts to the federal budget over the next decade. If they failed, a package of automatic cuts designed to slash funding to programs dear to both parties (military spending, in the Republicans’ case, and Medicare and other domestic programs in the Democrats’) would go into effect on Jan. 1, 2013.

Needless to say, the super committee failed, leading to the cuts we’re seeing now.

How does this fit in with the “fiscal cliff”?

Sequestration was one element of the “fiscal cliff,” which also included a number of other spending cuts and tax increases. Congress passed a last-minute deal Jan. 1 to blunt the cliff’s impact, which included pushing back the effective date for sequestration to March 1. While Obama and members of Congress spoke out against the sequestration in February — Senate Democrats announced a plan to put it off for another 10 months — those efforts failed to stop the cuts.

So what’s happened since March 1?

The indiscriminate cuts span a wide range of federal programs and departments, making them difficult to track. (Even the White House struggled to explain exactly which programs they’d hit as it was denouncing them.) Jay Carney, the White House press secretary, told reporters Feb. 28 that sequestration would have “a rolling impact, an effect that will build and build and build.”

Congress passed a bill, signed by Obama on March 26, to spare a few programs from cuts this year, including an infant nutrition program, the nuclear weapons program and funding for security at U.S. embassies abroad — a sensitive area since the attacks in Benghazi, Libya, last September. The bill also gave some agencies, including the Pentagon, more flexibility in carrying out the sequester. But it didn’t reduce the total amount the government is required to cut — $85 billion — by the end of the fiscal year in October.

Gotcha. What has all this done to the economy?

The Congressional Budget Office estimates sequestration will cost around 750,000 jobs in total, and forecasters think it could reduce economic growth by half a percentage point this year. But with much of the sequester only beginning to take effect, the consequences have been hard to see so far. The sequester doesn’t seem to be responsible for the weak March jobs report, Annie Lowrey writes on the New York Times‘ Economix blog, and most furloughs have yet to take effect.

Do we know any more about what’s been affected?

Yes. Sequestration is still playing out, but here’s what we know has happened so far:

Congress: While lawmakers’ salaries are exempt from cuts, sequestration hasn’t spared congressional offices, which have had to slash their spending by 8.2 percent. “Magazine subscriptions have been canceled,” the Washington Post reported. “Constituents are getting email instead of snail mail. Invoices are getting a second look.” Sequestration has also cut into funding for the overseas fact-finding trips lawmakers often take, known as “codels.” House Speaker John A. Boehner, a Republican, banned his caucus from using military aircraft for codels in February.

The White House: While the egg hunt was saved, the White House announced last month that it would stop giving tours due to sequestration. (Republicans criticized the decision, with Rep. James Lankford of Oklahoma calling it “a dramatic overreaction.”) The White House has also furloughed 480 Office of Management and Budget staffers, and the president will voluntarily return five percent of his salary. (Rep. Tammy Duckworth of Illinois, Defense Secretary Chuck Hagel and other officials have also announced that they will return a portion of their salaries.) But Roll Call has reported that the White House — which spent “more than a month of dodging questions” about the effects of sequestration on West Wing staffers — seems to have been spared from deep cuts.

Federal Agencies: Secretary of Homeland Security Janet Napolitano and other officials predicted in February that sequestration would cause lengthy delays at airports, but such delays don’t seem to have occurred. Flights on U.S.-based airlines came in on time with about the same frequency during the last two weeks in March as they did during the same period last year, the Los Angeles Times reported. But sequestration’s effects on other federal agencies and departments have been very real.

After sequestration forced Yellowstone National Park to cut $1.75 million from its $35 million budget, the park — run by the National Park Service — trimmed its payroll and decided to cut back on snowplowing, which would delay the park’s opening. Plowing was saved only when the Cody and Jackson Hole, WY chambers of commerce, fearing the economic impact of a late park opening, kicked in $170,000.

In Washington, agency after agency is planning to furlough its employees. “The Department of Housing and Urban Development,” the Washington Post reported, “will shut down for seven days starting in May, after concluding that staggering furloughs for 9,000 employees would create too much paperwork.” And the Department of Labor is planning to lay off 30 of the 74 lawyers it hired to work through a backlog of mine-safety citations that are under appeals. The department had hired the lawyers after a 2010 explosion at a mine run by a company that had received many such citations but fought them, preventing regulatory action against it. The move will save the Labor Department $2.1 million.

And while airline delays haven’t materialized, the Federal Aviation Administration has announced that it plans to close 149 airport control towers. Most of them are at rural airports, but the north tower at Chicago’s O’Hare International Airport is also on the list. The tower and O’Hare’s 27 Right runway opened in 2008 as part of a $450 million project that has boosted significantly the number of planes the airport can handle. But furloughs for O’Hare’s air traffic controllers mean the tower and the runway might be shut down for part of each day. After protests, the F.A.A. announced last week that it would delay the closings until June.

The Pentagon: Even with the bill signed by Obama in March, the Pentagon still must cut $41 billion from its budget this year, which Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, described as “the steepest decline in our budget ever.” (The Pentagon has been asked to cut more before, but never halfway through the fiscal year.)

Hundreds of thousands of civilian Defense Department employees will likely have to take 14 furlough days by October. Defense Secretary Chuck Hagel said last week that everything from weapons to the number of generals and admirals could be cut.

Medicare: Cancer clinics last week began turning away thousands of Medicare patients being treated with expensive chemotherapy drugs, which the clinics say they can no longer afford. “Legislators meant to partially shield Medicare from the automatic budget cuts triggered by the sequester, limiting the program to a two-percent reduction — a fraction of the cuts seen by other federal programs,” the Washington Post’s Sarah Kliff reported. “But oncologists say the cut is unexpectedly damaging for cancer patients because of the way those treatments are covered.” Medicare has said that it doesn’t have the power to restore funding for the drugs. (Rep. Renee Ellmers, a North Carolina Republican, introduced a bill this week that would reverse the cuts.)

Education: The federally funded Head Start early education program is expected to lose about 70,000 of its roughly one million slots due to sequestration. Those cuts have already hit children in Indiana, where Head Start programs in two towns resorted to a lottery system in March to determine which kids could remain. Other Head Start programs — such as one in Passaic County, N.J that expects to lose about $200,000 of its roughly $4 million in federal funding — won’t have to wrestle with cuts until the fall.

Sequestration is also hitting schools on Indian reservations, where federal funds can make up 60 percent of a school’s budget. The Fort Peck Indian reservation in Montana “can’t hire a reading teacher in an elementary school where more than half the students do not read or write at grade level,” according to the Washington Post. Summer school may be cancelled. And the Red Lake reservation in Minnesota — where a shooting at the high school left seven people dead in 2005 — has cut its security staff, as well as course offerings and support staff, in response to sequestration.

Scientific Research: The sequester has also hacked away at funding for scientific research. The National Science Foundation expects to make 1,000 fewer grants this year. Vanderbilt University in Nashville, TN will admit fewer science and engineering graduate students. And the directors of the Department of Energy’s National Laboratories expect that the “drop in funding will force us to cancel all new programs and research initiatives, probably for at least two years.” More than 50 Nobel laureates have signed a letter protesting the cuts, which Hunter R. Rawlings III, the president of the Association of American Universities, has also decried. “To put it kindly, this is an irrational approach to deficit reduction,” he told a Senate committee in February. “To put it not so kindly, it is just plain stupid.”

Court System: Sequestration has cut the federal judiciary’s budget by almost $350 million for the 2013 fiscal year, which is already half over. In Massachusetts, public defenders will have to take 16½ furlough days — which could lead to a backlog in the court system — and funding for drug and mental health services will be cut by 20 percent. In Dallas, the public defender’s office will shut down every Friday for the next six months.

And in New York, public defenders representing Sulaiman Abu Ghaith, a former al Qaeda spokesman and a son-in-law of Osama bin Laden charged with conspiring to kill Americans, requested this week that a federal judge push back the trial date because of furloughs in their office. “It’s extremely troublesome to contemplate the possibility of a case of this nature being delayed because of sequestration,” Judge Lewis A. Kaplan said in Federal District Court in Manhattan on Monday. “Let me say only that — stunning.”

Wow. Has anybody beaten sequestration?

Yes. Weeks before the sequester hit, Agriculture Secretary Tom Vilsack started describing how his department would have to furlough meat inspectors if the cuts went through, forcing meat-processing plants to shut down on furlough days. His talk convinced the meat inspectors’ union and other industry heavyweights to start lobbying. The National Cattlemen’s Beef Association, the National Chicken Council, the National Turkey Federation went to work, and the Senate ended up moving $55 million from other Agriculture Department programs to the inspectors.

Read David A. Fahrenthold and Lisa Rein’s excellent Washington Post story for more details.

How can I keep up with the sequester?

Here are some great resources for tracking the overall impact:

The Huffington Post put together a list of sequestration’s effects around the nation.
—The Washington Post is charting the projected and actual impact on federal agencies.
—We’ve compiled some of the best charts and graphics explaining the sequester.

Have you seen any fantastic reporting, graphics or other resources on sequestration’s impact? Tweet us your recommendations with #muckreads. 

AP Photo/J. Scott Applewhite

Under Obama, More Appointments Go Unfilled

by Theodoric Meyer, ProPublica.

The Centers for Medicare and Medicaid Services haven’t had a Senate-confirmed administrator since 2006. The Federal Labor Relations Authority has had only a single member since January and can’t issue decisions. And the Election Assistance Commission hasn’t had any commissioners at all since 2011.

All presidential administrations have vacancies. But an analysis of appointments data by ProPublica shows that President Obama hasn’t kept up with his predecessors in filling them. A greater share of presidentially appointed positions that require Senate confirmation were sitting vacant at the end of Obama’s first term than at the end of Bill Clinton’s or George W. Bush’s first terms.

At least 68 of the positions remain vacant, including 43 that have been vacant for more than a year.

The vacancies have been spread across dozens of different departments and agencies, with some hit harder than others.  At the Department of the Interior, for instance, six of its 18 appointed positions were vacant at the end of Obama’s first term. The department had three vacancies midway through Clinton’s presidency and only one midway through Bush’s.

The lack of appointed leaders can create problems. Too many vacancies can put agencies “in stand-down, waiting for policymakers to show up,” said Terry Sullivan, a political science professor at the University of North Carolina who has studied appointments.

Acting heads of agencies “don’t make any big decisions,” said Cal Mackenzie, a professor of government at Colby College who has studied appointments since the 1970s. “Your authority is not going to be recognized in the same way a Senate-confirmed appointee is going to be recognized.”

Overall, more than 13 percent of presidentially appointed positions hadn’t been filled at the end of Obama’s first term, compared with around 10 percent for Bush and 11 percent for Clinton. While the uptick compared with the Bush administration may sound small, it translates into dozens more vacant positions.

The data comes from the Plum Book, a directory of federal appointees released every four years. (We started looking at the data after it was flagged by the New York Times’ Derek Willis.) The data doesn’t include the vast majority of judicial appointments, for which vacancies have also risen under Obama.

The White House’s Office of Presidential Personnel didn’t respond to a request for comment.

So who’s to blame for the unfilled positions?

“I think President Obama bears some responsibility and the Senate bears some responsibility,” said Anne Joseph O’Connell, a law professor at the University of California, Berkeley, whose research shows that Obama filled fewer positions in departments and executive agencies in his first year in the White House than any of the last four presidents.

Obama has been slower to make appointments, she said, and the Senate slower to confirm them.

Republicans have increasingly created roadblocks for nominees.

For instance, Senate Republicans blocked Obama’s nominees to the Election Assistance Commission — an agency charged with aiding voting that House Republicans voted to get rid of in 2011.

And Chuck Hagel this month became the only the third cabinet nominee to face a filibuster. (It was Democrats, however, who first toughened up the confirmation process, under Republican presidents in the 1970s and 1980s.  And it was Democrats who filibustered the first two cabinet nominees.)

At the same time, the number of positions the president must appoint has swelled. Obama signed a bill in August that removed the Senate confirmation requirement from some 166 positions, but the president still must fill over 1,000 appointed positions — a task that can prove overwhelming.

Clay Johnson, a Republican who headed the Presidential Personnel Office as director under George W. Bush, said there simply are not enough White House staff to select and vet nominees, especially in the early days of an administration. Senate clashes over appointments, in his view, are less of a problem.

“There is little dispute that the current nominations process has grown too cumbersome and complicated, in some cases discouraging qualified individuals from seeking leadership positions,” Rep. Jason Chaffetz, a Utah Republican, said on the House floor when the bill passed.

Despite the recent efforts to reform appointments, the growing fierceness of Senate confirmation battles has fueled worries that it might get harder to find qualified nominees willing to endure them.

Consider William Boarman, whom Obama tapped to lead the Government Printing Office in 2010.

Boarman, a former printer, had headed the printing, publishing and media workers section of the Communications Workers of America union when he was nominated. He had advised the White House on choosing the next public printer — as the head of the GPO is known — before they offered him the nomination. He cleared the Senate Rules and Administration Committee unanimously in July 2010.

“I thought it was going to a cakewalk,” he said of the confirmation process.

But Boarman’s nomination failed to come up for a vote. (Roll Call reported that a senator had placed a hold on it.) Obama circumvented the delay by giving Boarman a recess appointment while the Senate was away in December, allowing him to take the post while the administration nominated him a second time.

As public printer, Boarman took steps to modernize the agency and cut its costs. He slashed bonuses — “which were being paid pretty liberally when I got there,” he said — offered buyouts to workers and introduced the GPO’s first e-books.

Boarman’s recess appointment lasted only until the end of Congress’s current session, however.

Obama had nominated Boarman again in January, 2011, but his nomination continued to languish in the Senate. As Roll Call first reported, Sens. Orrin Hatch of Utah and Johnny Isakson of Georgia, both Republicans, were holding up Boarman’s nomination because they were unhappy that a nominee to the National Labor Relations Board had not been confirmed by the Senate.

Boarman’s nomination never came up for a vote. He turned on C-SPAN on Dec. 17, the last day he could be confirmed, and found out he was out of a job.

The GPO is now run by the acting public printer, Davita Vance-Cooks, whom Boarman had hired after he arrived. But he said he doesn’t think an acting head can lead as effectively as a Senate-confirmed one.

“When you’re a political appointee,” Boarman said, “you feel that you’re empowered” to make the kind of changes that Boarman made when he arrived. “I don’t think you can do that as an acting,” he added.

Boarman, who left his well-paid union position to serve as public printer and is now retired, said he worried that the arduous confirmation process would make it hard to find good candidates: “If this continues to happen — and I have no reason to believe that it won’t — people aren’t going to serve.”

ProPublica’s Cora Currier contributed reporting to this story. 

 

 

Why 58 Representatives Who Voted For Hurricane Katrina Aid Voted Against Aid For Sandy

by Theodoric Meyer ProPublica

When Hurricane Katrina hit in 2005, Congress passed two relief bills almost unanimously. But when it comes to Hurricane Sandy, some in Congress seem to have had a change of heart.

After Katrina, a $51.8 billion relief package passed the House of Representatives 410 to 11. Another bill, which allowed the National Flood Insurance Program to borrow more money, sailed through 416 to 0.

On Tuesday, the House passed a $50.7 billion relief package for Sandy. This time, 180 representatives voted against it — 179 Republicans, one Democrat — 56 of whom had voted for the similarly sized Katrina bill.

Another Sandy bill earlier this month also garnered opposition. That bill, almost identical to the one on the flood insurance program passed after Katrina, was opposed by 67 representatives, all Republicans.

In total, 58 representatives voted against bills this month similar to ones that they had supported after Katrina.

Here’s a breakdown of how each of them voted on the two Katrina bills and the two Sandy ones:

Robert B. Aderholt AL Rep. Yea Nay Yea Yea
Mike D. Rogers AL Rep. Yea Nay Yea Yea
Trent Franks AZ Rep. Yea Nay Yea Nay
Ed Royce CA Rep. Yea Nay Yea Nay
Ken Calvert CA Rep. Yea Nay Yea Yea
Darrell Issa CA Rep. Yea Nay Didn’t Vote Yea
Gary G. Miller CA Rep. Yea Nay Yea Didn’t Vote
Dana Rohrabacher CA Rep. Yea Nay Yea Yea
John L. Mica FL Rep. Yea Nay Yea Yea
Jeff Miller FL Rep. Yea Nay Yea Yea
Tom Price GA Rep. Yea Nay Yea Nay
Phil Gingrey GA Rep. Yea Nay Yea Yea
Mike Simpson ID Rep. Yea Nay Yea Yea
Tom Latham IA Rep. Yea Nay Yea Yea
Dave Camp MI Rep. Yea Nay Yea Yea
Candice S. Miller MI Rep. Yea Nay Yea Yea
Fred Upton MI Rep. Yea Nay Yea Yea
John Kline MN Rep. Yea Nay Yea Yea
Sam Graves MO Rep. Yea Nay Yea Nay
Virginia Foxx NC Rep. Nay Nay Yea Nay
Howard Coble NC Rep Yea Nay Yea Yea
Walter B. Jones NC Rep. Yea Nay Yea Yea
Patrick T. McHenry NC Rep. Yea Nay Yea Yea
Steve Pearce NM Rep. Yea Nay Yea Nay
Jeff Fortenberry NE Rep. Yea Nay Yea Yea
Lee Terry NE Rep. Yea Nay Yea Yea
Steve Chabot OH Rep. Yea Nay Yea Nay
Pat Tiberi OH Rep. Yea Nay Yea Yea
Greg Walden OR Rep. Yea Nay Yea Yea
Tim Murphy PA Rep. Yea Nay Yea Yea
Joe Pitts PA Rep. Yea Nay Yea Yea
Bill Shuster PA Rep. Yea Nay Yea Yea
Joe Wilson SC Rep. Yea Nay Yea Nay
Marsha Blackburn TN Rep. Yea Nay Yea Nay
John J. Duncan Jr. TN Rep. Yea Nay Yea Nay
Jim Cooper TN Dem. Yea Nay Yea Yea
Louie Gohmert TX Rep. Yea Nay Yea Nay
Kenny Marchant TX Rep. Yea Nay Yea Nay
Randy Neugebauer TX Rep. Yea Nay Yea Nay
William M. Thornberry TX Rep. Yea Nay Yea Nay
Michael C. Burgess TX Rep. Yea Nay Yea Yea
John Carter TX Rep. Yea Nay Yea Yea
Kay Granger TX Rep. Yea Nay Yea Yea
Ralph M. Hall TX Rep. Yea Nay Yea Yea
Jeb Hensarling TX Rep. Yea Nay Yea Yea
Sam Johnson TX Rep. Yea Nay Yea Yea
Michael McCaul TX Rep. Yea Nay Yea Yea
Ted Poe TX Rep. Yea Nay Yea Yea
Pete Sessions TX Rep. Yea Nay Yea Yea
Lamar Smith TX Rep. Yea Nay Yea Yea
Rob Bishop UT Rep. Yea Nay Yea Yea
Robert W. Goodlatte VA Rep. Yea Nay Yea Nay
J. Randy Forbes VA Rep. Yea Nay Yea Yea
Doc Hastings WA Rep. Yea Nay Yea Yea
Cathy McMorris Rodgers WA Rep. Yea Nay Yea Yea
Tom Petri WI Rep. Yea Nay Yea Nay
Paul D. Ryan WI Rep. Yea Nay Yea Nay
F. James Sensenbrenner WI Rep. Nay Nay Yea Nay

Source: Clerk of the House of Representatives

What accounts for the legislators’ changed votes?

“The difference is the fiscal state of the country,” Jason Klindt, a spokesman for Rep. Sam Graves, a Missouri Republican, wrote in an email explaining why Graves voted for both of the Katrina relief bills but against the ones for Hurricane Sandy. “The days of buy now and pay later are over,” he added.

Klindt said Graves would have supported the bills if they had offset the costs with spending cuts.

The $51.8 billion relief bill passed after Katrina and the $50.7 billion one that passed the House on Tuesday aren’t exactly the same. The Katrina version allocated almost all of the money to the Department of Homeland Security for disaster relief, while the Sandy one directs relief money to a slew of federal agencies.

Conservatives derided some of the provisions of the Sandy bill as pork. As they point out, the bill allocates billions to dozens of federal agencies, including the National Park Service, the Smithsonian, Immigration and Customs Enforcement, the Secret Service, the Federal Aviation Administration and the National Oceanic and Atmospheric Administration. But the bill also specifies the agencies must spend the money on Sandy-related expenses.

As for the votes against the flood insurance program, the Katrina and Sandy bills were basically the same. But there is an important difference: The program has fallen at least $20 billion into the red since Katrina. And it doesn’t take in enough revenue to pay the money back.

The Katrina bill raised the limit on borrowing for the program by $2 billion — subsequent legislation increased it by billions more to cover Katrina-related losses. And the Sandy bill upped the borrowing limit by another $9.7 billion.

“We’re continually bailing out this program and it’s clear that it’s no longer solvent,” said Heather Vaughan, a spokeswoman for Rep. Randy Neugebauer of Texas, who voted to let the flood insurance program –which insures 5.7 million homes — borrow more money in 2005 but against it this month.

“It would be irresponsible to raise an insolvent program’s debt ceiling without making the necessary reforms,” Rep. Paul Ryan of Wisconsin said in a statement after the vote this month.

How did the flood insurance program fall so deeply into debt? The short answer is Hurricane Katrina.

“The program worked well for a good number of years,” said David Maurstad, who ran the program from 2004 to 2008. Funded by annual premiums paid by homeowners, the program was self-sufficient and had even built up a reserve of about $2 billion by 2004, according to Maurstad. But it wasn’t designed to handle a catastrophic year like 2005, when Hurricanes Katrina, Rita and Wilma left the program on the hook for $17.7 billion in claims. So Congress authorized the program to borrow the money to pay the claims.

But the flood insurance program didn’t have any way to repay those funds. It takes in only about $3.5 billion a year in premiums, and the claims have overwhelmed premiums in four of the last eight years.

One representative actually voted against the big Katrina relief package but in favor of the Sandy one this week: Rep. Scott Garrett of New Jersey. Garrett did not respond to requests for comment on the vote.

Photo credit: AP/U.S. Air Force, Master Sgt. Mark C. Olsen

 

How Bad Is Our Debt Problem, Anyway? And Will A Deal Fix It?

by Theodoric Meyer, ProPublica.

President Obama will meet with congressional leaders today in another attempt to avert the fiscal cliff — the automatic tax increases and spending cuts set to take effect Jan. 1 unless Congress can strike a deal. The cuts and tax hikes, which total more than $500 billion, are so large and so sudden that many economists fear they would plunge the country back into recession.

As Washington tries to hash out a deal, we’ve taken a step back to break down the numbers behind our deficit — how it grew so big, why it is actually shrinking and whether a deal can bring it under control.

How much are we in debt?

The federal debt is just shy of $16.4 trillion at the moment, which also happens to be the debt limit that Congress set in 2011. Treasury Secretary Timothy F. Geithner announced on Wednesday that the nation would hit the limit on Dec. 31. The Treasury can take some “extraordinary measures” to keep paying its bills for a few weeks, but it’ll run out of cash by February or March unless Congress raises the limit again.

And that’s different from the deficit, right?

Yes. The debt is the total amount of the government’s outstanding obligations. The deficit is how much the government is in the red in a given year. In the 2012 fiscal year, which ended Sept. 30, the deficit amounted to $1.1 trillion.

That seems like a huge number. How did the deficit get so big?

The 2012 deficit was actually the smallest one since 2008. But it’s still a giant shortfall.

As Binyamin Appelbaum noted in The New York Times, the federal government has run a deficit in 45 of the last 50 years. (The exceptions were 1969 and 1998 through 2001.) The financial crisis in 2008, however, caused the deficit to skyrocket, as tax revenues fell because of the slump in incomes and production, and government spending on the stimulus and safety net measures such as unemployment insurance shot up. The deficit for the 2008 fiscal year was $455 billion. In 2009, it surged to more than $1.4 trillion.

Since then, the deficit has been falling, albeit very slowly. The government took in 6.4 percent more in taxes in 2012 than in 2011, as the economy improved a bit and several tax breaks expired. And it spent less on Medicaid, unemployment insurance and the continuing operations in Iraq and Afghanistan.

What about the total debt? How much of that is President Obama’s fault?

The debt has grown by nearly $6 trillion since Obama took office, from $10.5 trillion to $16.4 trillion.

Figuring out how much of that is due to Obama is tougher. The Washington Post’s Ezra Klein, working with the Center on Budget and Policy Priorities, calculated in January that the legislation Obama had actually signed — as opposed to factors like the economy — had added about $983 billion to the debt.

Klein has also rounded up several charts that break down exactly what’s caused our debt to grow so large. The biggest single factor has been the weak economy; President George W. Bush’s tax cuts and the wars in Iraq and Afghanistan also fueled the debt buildup, as did President Obama’s stimulus.

Have debt levels ever been this high before?

Yes, proportionally. Economists like to talk about a country’s debt in relation to its gross domestic product (a measure of the economy’s total annual output). And instead of using a country’s total outstanding debt to calculate this debt-to-GDP ratio, economists typically use the amount of debt held by the public. (Somewhat confusingly, the federal government holds about $5 trillion in obligations to itself, most of which is money owed to the funds that support Social Security and other programs.)

Using this measurement, our debt was about 67.7 percent of GDP last year. As this chart compiled by Quartz’s Ritchie King shows, that’s the highest our debt-to-GDP ratio has been since the 1940s, when the need to finance World War II caused the debt to surge to 112.7 percent of GDP. But the economy grew fast enough after the war that the debt soon became a much smaller percentage of the country’s GDP.

It’s worth noting that a number of other developed countries have higher debt-to-GDP ratios than the U.S. Germany’s public debt is 80.6 percent of GDP, and Canada’s is 87.4 percent. The Eurozone’s most troubled countries fare even worse: Italy’s debt is 120.1 percent of GDP; Greece’s is 165.3 percent.

At least we’re not Greece. How much longer can we keep borrowing?

That’s a tough one. Some commentators — including Paul Krugman, the Nobel-winning economist and columnist for The New York Times — have argued that our current deficits are mostly a product of the sluggish economy. The deficit, Krugman wrote last week, “is a side-effect of an economic depression, and the first order of business should be to end that depression — which means, among other things, leaving the deficit alone for now.”

Other economists — including Carmen Reinhart and Kenneth Rogoff, who studied eight centuries’ worth of financial crises for their book This Time Is Different — argue that countries with debt-to-GDP ratios above a certain level tend to experience slower economic growth. Reinhart and Rogoff suggest the level is around 90 percent of GDP — which the U.S. is rapidly approaching. A recent Congressional Research Service report concluded that while the debt-to-GDP ratio can’t keep rising forever, “it can rise for a time.” The report continued:

It is hard to predict at what point bond holders would deem it to be unsustainable. A few other advanced economies have debt-to-GDP ratios higher than that of the United States. Some of those countries in Europe have recently seen their financing costs rise to the point that they are unable to finance their deficits solely through private markets. But Japan has the highest debt-to-GDP ratio of any advanced economy, and it has continued to be able to finance its debt at extremely low costs.

How does all this fit into the fiscal cliff? Would a deal to avert it fix our debt problem?

Actually, going over the fiscal cliff would almost singlehandedly erase the deficit. Tax rates would shoot up, and the fiscal cliff’s indiscriminate budget cuts would slash military and safety-net spending alike.

The problem is that all those tax increases and spending cuts would likely throw the economy back into a recession, causing the deficit to balloon again. “The economy will, I think, go off a cliff,” said Ben Bernanke, the Federal Reserve chairman.

(For more detail, see The Washington Post’s exhaustive fiscal cliff explainer.)

What the two sides are trying to do is identify cuts that are ultimately deep enough to bring down the deficit — and thus, eventually, the debt — without stalling the economy. But negotiations collapsed last week after John Boehner, the Republican House speaker, tried and failed to pass a “Plan B” alternative to the president’s proposal in the House. Obama is set to meet with congressional leaders today to try to strike a deal to block at least some of the cliff’s impact by Monday night. But its prospects seem dim.

“I have to be very honest,” Sen. Harry Reid, the majority leader, said on Thursday. “I don’t know timewise how it can happen now.”

Of course, some analysts have pointed out that people on both the Republican and the Democratic sides may actually want to move the cliff just slightly down the road into the next Congress, which convenes Thursday, Jan. 3. The advantages: Boehner can be safely re-elected as speaker before he has to do serious twisting of arms of fellow GOP House members to get their votes for any compromise plan. And there will be a few more Democrats in the House and the Senate for the White House to rely on in enlisting the votes it needs to ratify any such deal. The disadvantage: Delay makes the risk of miscalculation greater for either or both sides — and for the public.

Photo credit: AP/J. Scott Applewhite

 

Outside Groups Dominated Las Vegas Airwaves In 2012 Campaign

by Theodoric Meyer, ProPublica.

Dark money groups that don’t have to disclose their donors spent hundreds of millions in this election cycle. And now we’ve got a better idea of the extent of their spending in one crucial swing-state advertising market.

As the final hours of the campaign ticked away, we challenged ProPublica readers to help us “free the files” in Las Vegas, which aired more political ads this election cycle than any other market in the country. The results indicate a leading conservative dark-money group and its affiliated Super PAC spent more than $9 million on television advertising in Las Vegas during the election — one in every five ad dollars spent in the market.

The two groups — Crossroads GPS, a “social-welfare nonprofit” started by Karl Rove in 2010, and American Crossroads, a Super PAC that is closely aligned with it — bought far more ads than other independent groups in Las Vegas. Together, they spent nearly as much as President Obama’s and Mitt Romney’s campaigns combined.

The statistics come from a ProPublica analysis of more than 800 ad contracts from the Las Vegas market obtained as part of our Free the Files project. While not comprehensive, the data includes most of the contracts for political ads broadcast on Las Vegas’ ABC, CBS, NBC and FOX affiliates in the last months of the campaign. The Vegas ad buys, which encompass spending on everything from the presidential campaigns down to House of Representatives races and even the Clark County District Court election, totaled more than $47 million.

While it was known that Crossroads GPS and American Crossroads were spending big in the election — they were expected to fork out at least $300 million in total — the Free the Files data on Las Vegas sheds light on the extent to which the two groups were able to dominate the air wars in key battleground advertising markets.

All told, six groups that do not disclose their donors — American Action Network, American Future Fund, Americans for Prosperity, the Center for Individual Freedom, Crossroads GPS and the Republican Jewish Coalition — accounted for at least 21 percent of the spending we tracked in Las Vegas. All of them support conservative candidates. Crossroads GPS alone spent more than $6 million. (A liberal dark money group, Patriot Majority USA, also bought airtime, but many of the ad contracts failed to distinguish its ad buys from those of Patriot Majority PAC, a Super PAC that is affiliated with the group, making it hard to track the groups’ spending.)

Five Super PACs accounted for another 13 percent of the spending. They included Restore Our Future, the Romney-supporting Super PAC; Priorities USA Action, which supported Obama; House Majority PAC and Senate Majority PAC, which supported Democratic candidates for Congress; and American Crossroads.

Whether all the spending swayed the races in Nevada is an open question. Both liberal and conservative groups spent heavily, and the election results were mixed: Obama won Nevada with 52 percent of the vote, but Dean Heller, a Republican, came out on top in the Senate race. Joe Heck, a Republican, snagged one of the state’s two competitive House seats, but Steven Horsford, a Democrat, took the other.

The $47 million spent in Las Vegas represents a tiny fraction of the estimated $6 billion spent in races around the country this election cycle. But it’s a detailed look at the epicenter of ad buys this election. KSNV, the city’s NBC affiliate, broadcast more political ads than any other station in the country, according to Kantar Media; KTNV, the ABC affiliate, broadcasted the fifth most.

Several factors combined to make Vegas the country’s political-advertising capital, said Elizabeth Wilner, who works in Kantar Media’s Campaign Media Analysis Group. Nevada is one of an ever-smaller slate of battleground states, and Las Vegas is by far its biggest market.

Airtime is also relatively cheap in Vegas; campaigns can buy more ads for the same amount of money than they could in Denver or Miami.

But the Free the Files data also underscores the central role played by groups that didn’t exist in the last presidential election, including Crossroads GPS and American Crossroads. Lisa Howfield, KSNV’s general manager, said her station’s political advertising revenue was up 242 percent compared with 2008.

 

 

Big Electric Companies Behind ‘Grassroots’ Ad Campaign In Florida

by Theodoric Meyer, ProPublica.

Oct. 15: This story has been updated with comments from the Edison Electric Institute.

Since August, a dark money group called Defend My Dividend has spent nearly $90,000 running ads on South Florida TV stations warning seniors about a looming increase in the tax rate on dividends.

“You worked hard, saved for retirement, and dividends are a big part of it,” says one of the ads, which Defend My Dividend has posted on YouTube. “But if President Obama and Congress don’t act this year, tax rates on dividends will spike, almost tripling in some cases.” Time is running out, the ad intones, as phone numbers for Obama and Congress appear on the screen.

The spot directs viewers to a website that gives few hints about the group behind the ads, which is described as a “national grassroots advocacy campaign.”

But there are indications the group is more Astroturf than grassroots: The website is maintained by the Edison Electric Institute, a trade association for big dividend-paying electric companies.

According to television ad contracts obtained as part of ProPublica‘s Free the Files project, the contact person listed for some of the Florida ad buys was Stephanie Voyda, the institute’s director. On many contracts, the Alliance for Savings & Investment, a group that represents dividend-paying companies, is listed as a co-buyer with Defend My Dividend.

Voyda did not respond to repeated requests for comment from ProPublica. Neither did Jim McCrery, a lobbyist and former Louisiana representative who serves as the manager of the alliance.

Tax analysts say electric utilities and other companies are concerned that the tax change could damage their stock prices. Dividends have been taxed at 15 percent since 2003, but the tax will rise unless Congress acts before the end of the year to extend cuts made under President George W. Bush. The Alliance for Savings & Investment successfully lobbied against a hike in dividend taxes in 2010.

The Defend My Dividend ads have run in Miami and West Palm Beach, two markets known for their large population of retirees. Curtis Dubay, a senior policy analyst at the Heritage Foundation, a right-leaning think tank, said the strategy made sense.

“Florida has the highest proportion of retirees, who rely on dividends,” he said.

Ryan Rudominer, the Edison Electric Institute’s executive director for communications, confirmed that Defend My Dividend, which he said had been formed in 2008, was targeting seniors in Florida.

“Paid ads have been running on national cable television, in print publications, and in select regional markets,” he said in an email. “South Florida has a strong concentration of senior citizens and retirees that rely on dividend income and would be negatively impacted by the looming dividend tax hike.”

Asked about Defend My Dividend’s claim to be a grassroots campaign, Rudominer said the group had “generated hundreds of thousands of emails and phone calls from concerned citizens to their elected officials urging them to stop a dividend tax hike.”

It’s unclear how much the typical retiree would be affected if the Bush tax cuts are not extended. In that case, dividends would be taxed as ordinary income, said Roberton Williams, a senior fellow at the Tax Policy Center and a former tax analyst for the Congressional Budget Office.

In February, President Obama proposed taxing dividends as regular income only for those who make at least $250,000 a year. Along with the 3.8 percent surtax on high earners in the health care law, dividends could be taxed as high as 43.4 percent for that subset of people—the source of the ad’s assertion that the dividend tax could triple.

“My guess is that the tax changes would disproportionately hit high-income individuals rather than older individuals,” Williams said.

Seniors who hold dividend-paying stocks in IRAs or 401(k)s wouldn’t be affected at all, he added, because dividends accrued in such accounts are already taxed as regular income when money is withdrawn.

Defend My Dividend’s ads are clearly aimed at seniors, however. They feature older couples prominently and warn that a tax hike will have the effect of “squeezing seniors and families.”

Edison Electric Institute, which is incorporated as a 501(c)(6) trade group and does not have to disclose its donors, has driven home similar messages about the potential tax change in other venues as well.

Its chairman, Lewis Hay III, who is also the executive chairman of NextEra Energy, a Florida power company, wrote an op-ed for The Wall Street Journal in July, with the headline “The Tax Cliff Endangers Seniors.” Hay, McCrery and Sandy Callahan, the chief financial officer of TECO Energy, another Florida-based power company, have written similar op-eds promoting Defend My Dividend for several Florida newspapers in recent weeks. Hay did not respond to requests for an interview.