SUMMARY: New York Times columnist David Brooks and Washington Post columnist Ruth Marcus join Judy Woodruff to discuss President Obama’s call to arms on immigration, a lawsuit by the Republican House over the president’s health care law and a look ahead at the 2016 presidential race.
JUDY WOODRUFF (NewsHour): A chilling account of a gang rape at the University of Virginia has reignited attention over the problem of sexual assault on campus.
In this case, it is provoking new investigations and questions about the university’s response to assault cases and whether it has covered them up. The story appears in “Rolling Stone” magazine. It’s an account of what happens to an unidentified freshman who is called Jackie and is attacked at the Phi Kappa Psi fraternity house in 2012.
Seven men took turns raping the 18-year-old over three hours. Two others watched, according to the piece. The story also finds that faculty and friends didn’t encourage her to report the attack and that the fraternity wasn’t investigated until this year.
The University of Virginia declined our invitation to appear. It has asked the Charlottesville police to investigate. More on its statements in just a moment.
But, first, let’s turn to the reporter who wrote the story for “Rolling Stone.” She is Sabrina Rubin Erdely.
Sabrina, thank you for talking with us.
First of all, why did you want to do this story? What caught your attention? Why UVA? And what is it about this story that you think was worthy of this kind of attention?
SABRINA RUBIN ERDELY, Rolling Stone: Well, we were looking to address the problem of rape on college campuses.
This is an issue that’s being discussed everywhere and we were looking to really investigate, what does it really look like on the ground level when there’s a rape at college against the greater context of college?
So I looked around at a lot of different campuses and I interviewed a lot of different students. I was looking to set this story at a university that had a good reputation, but also felt very representative of what was going on at American colleges across the country with regard to sexual assault.
I was also hoping that it would be a college that was under Title IX investigation, and on top of that, a place where people were willing to talk to me about their sexual assault experiences. And I found all that at University of Virginia.
JUDY WOODRUFF (NewsHour): Earlier today, friends and family of the Islamic State’s latest Western beheading victim, aid worker Peter Kassig, said goodbye to the 26-year-old.
Chief foreign affairs correspondent Margaret Warner reports.
MARGARET WARNER (NewsHour): Kassig, who converted to Islam after his capture in 2013 and took the name Abdul-Rahman, was memorialized this afternoon at an Indiana mosque.
Among the speakers, prominent Syrian Sunni cleric Sheik Muhammad al-Yaqoubi. Al-Yaqoubi was among the first Syrian clerics to call on President Bashar al-Assad to step down in 2011 after government forces cracked down on peaceful protesters. He was forced into exile later that year.
But he’s also a vocal critic of the Islamic State group. Two months ago, he released an open letter to its leader, Abu Bakr al-Baghdadi, telling him: “You have misinterpreted Islam into a religion of harshness, brutality, torture and murder,” which he called a great wrong and an offense to Islam.
I spoke with Sheik al-Yaqoubi yesterday.
Sheik al-Yaqoubi, thank you for joining us.
SHEIK MUHAMMAD AL-YAQOUBI: Thank you.
MARGARET WARNER: Why did you agree to speak at Peter Kassig’s funeral when the family asked you to?
SHEIK MUHAMMAD AL-YAQOUBI: Well, Peter Kassig, Abdul-Rahman, sacrificed his life for the sake of the Syrian people.
He went on a humanitarian mission as an aid worker to help save humanity, to show sympathy to the Syrian people, solidarity of the American people with the Syrian people. So it’s our duty as Syrians to stand by his family, and to stand by his community, and to stand by the American people who gave this example of bravery in this difficult time, when ISIS is slaughtering everyone.
GWEN IFILL (NewsHour): Hundreds of thousands of undocumented immigrants have been deported since President Obama took office, as efforts at comprehensive immigration reform have fallen by the wayside in Congress. Today, the White House announced the president has come up with a work-around, an executive action that would alter immigration policy without congressional action.
For more on the reach of presidential power when it comes to immigration policy, we turn to Frank Sharry, founder of America’s Voice, an immigration reform group, and Josh Blackman, a constitutional law professor at South Texas School of Law.
Frank Sharry, Senator John McCain and others have said this is an unconstitutional move that the president is taking. What’s your response to that?
FRANK SHARRY, America’s Voice: Not at all.
It’s well-established through historical precedent, and Supreme Court case law, and legislation that, look, every law enforcement agency has the right to decide, how are they going to use limited resources? Are they going to after everyone? Well, they don’t have the resources, so they have to set priorities, target resources.
The discretion is absolute. So it makes sense that President Obama’s contemplating saying, these people here are low priority, deep roots, been in the country, have citizen children. Let’s protect them. And then we will use the resources to go after the bad actors, the drug dealers, the national security threats, the serious criminals.
So, you know, look, and over the past 60 years, every president since Eisenhower, including Reagan and George W. Bush, has used executive action in the immigration arena. George H.W. Bush took a step in 1990 to legalize roughly half the undocumented population with work permits. There was no controversy about executive action then, and there shouldn’t be now.
GWEN IFILL: Josh Blackman, what is the constitutional argument here?
JOSH BLACKMAN, South Texas College of Law: So the president has a duty to take care of the law and to faithfully execute it.
So, while he does have discretion, I don’t agree that it’s absolute. I think the important point to make is, this goes far beyond what has been done before. It’s unprecedented. Frank mentioned that George H.W. Bush granted deferrals for 1.5 million. I think the key fact to remember is, these are people who are related to those being naturalized by the immigration laws.
So, it’s simply not the case. Here, President Obama imposed DACA for the dreamers. And now he’s going to add five million, six million more. None of these people under statutory law have any pathway to citizenship. This is really different than what was done before.
GWEN IFILL (NewsHour): In a vote on the Senate floor last night, lawmakers blocked a bill that would have drastically changed the way the National Security Agency currently monitors American citizens.
MAN: On this vote, the yeas are 58, the nays are 42.
GWEN IFILL: With that, the USA Freedom Act effectively died on the Senate floor last night, failing to garner the 60 votes needed to move to full debate.
The legislation would have ended the National Security Agency’s bulk collection of domestic phone call records, so-called metadata.
SEN. PATRICK LEAHY, (D) Vermont, Chair, Judiciary Committee: Our bill protects Americans.
GWEN IFILL: The lead sponsor, Vermont Senator Patrick Leahy, spoke for most of his fellow Democrats.
SEN. PATRICK LEAHY: The USA Freedom Act provides for commonsense reforms to government surveillance. It promotes greater accountability and transparency of the government’s surveillance programs.
GWEN IFILL: Former NSA employee Edward Snowden revealed the secret bulk collection program last year. It was authorized under Section 215 of the Patriot Act. This new bill would have forced the agency to get court orders for specific data from telecom companies. Most Republicans opposed the measure.
Georgia’s Saxby Chambliss, ranking member on the Senate Intelligence Committee, called it totally flawed.
SEN. SAXBY CHAMBLISS, (R) Georgia: But the fact is, there cannot be one single case pointed to by anybody who can show that as a result of the collection of metadata under 215, any American has had their privacy rights breached. It simply has not happened. It will not happen if we keep this program in place.
GWEN IFILL: President Obama had proposed curbing the NSA’s data gathering, and the House approved its own weaker version of the bill in may. The White House supported the Senate version, in part because the law authorizing the entire program expires next June.
GWEN IFILL (NewsHour): Now, the continuing effects of the Gulf Coast oil spill.
It may not be in the headlines as much as it once was, but some communities are still coping with its aftermath.
A new documentary showing in select theaters around the country returns to — the spotlight to those issues.
Hari Sreenivasan talks to the filmmaker.
HARI SREENIVASAN (NewsHour): It’s been more than four years sense the worst environmental disaster in U.S. history fouled the waters off the Gulf Coast after the Deepwater Horizon rig exploded. Oil gushed into Gulf for almost three months before it was capped. Eleven people died.
Since then, billions of dollars have been paid in settlements, shorelines have been cleaned, and areas have been restored, but some residents, businesses, and environmentalists say some places along the Gulf Coast have never fully recovered.
A new documentary called “The Great Invisible” highlights some of those issues. (must see trailer)
MAN: I’m used to seeing dirt, sand, something like that, but I ain’t never seen no kind of black — like a black, like, oily look. I just caught these shrimp. Look how they look. These shrimp, see the black in them and stuff? That came out of the water. Like, that — that came out of that shrimp. While that shrimp was in the freezer freezing, that is what came out of the shrimp.
HARI SREENIVASAN: Filmmaker Margaret Brown joins me now.
So, what was it that you were trying to achieve when you set out to make the film?
MARGARET BROWN, Director, “The Great Invisible”: Well, when I started to make the film, it was very personal, because I’m from Alabama.
I grew up on the Gulf Coast. And my father started sending me pictures of his house, which is on the water, and it was surrounded by the oil boom — or the orange boom that the volunteer fire department had put out to prevent the oil from reaching the shoreline.
And there were all these workers working around the house. It just was really — sort of didn’t look like his house anymore. And it felt very personal. And then I started talking to people that I had grown up with, and people just didn’t really know what to do. Like, in a hurricane, which happens a lot in the South, people know what to do. There’s, like, a checklist. But, with this, no one knew what to do.
SUMMARY: In the deadliest attack in Jerusalem since 2008, two Palestinian men burst into a synagogue, shooting and hacking victims with meat cleavers. Four people were murdered in the attack and a police officer later died after being wounded. Judy Woodruff reports on the aftermath.
SUMMARY: Judy Woodruff talks to Dennis Ross of the Washington Institute for Near East Policy and Shibley Telhami of the University of Maryland about what's behind the recent escalation of violence in Jerusalem.
GWEN IFILL (NewsHour): For the past year-and-a-half, scientists have been trying to figure out what’s behind a mysterious disease that’s led to the death of millions of starfish.
Now they have figured out the culprit, a virus. Sea star wasting syndrome has affected more than 20 species of West Coast starfish. First detected in Washington State last year, it’s since spread, decimating populations from Mexico all the way to Alaska.
This story comes from Katie Campbell at KCTS9 in Seattle. She reports for the public media project EarthFix.
KATIE CAMPBELL, KCTS9: After months of research, scientists have identified the pathogen at the heart of the starfish wasting disease. They say it’s different from all other known viruses infected marine organisms. They have dubbed it sea star associated densovirus.
IAN HEWSON, Cornell University: When you look on a scale of hundreds and hundreds of animals, as we did, it’s very clear that the virus is associated with symptomatic sea stars.
KATIE CAMPBELL: Ian Hewson is a microbiologist at Cornell University. He’s the lead author of the study. And he says it’s rare to figure out what causes marine diseases.
IAN HEWSON: In every drop of seawater, there’s 10 million viruses that basically we have had to sort through to try and find the virus that is responsible for this disease.
KATIE CAMPBELL: Researchers collected tissue samples and analyzed them for all possible pathogens. Once they had identified the leading candidate, they tested it by injecting the densovirus into healthy starfish in an aquarium. Then they watched to see if the disease took hold.
IAN HEWSON: When we inoculated them, they died within about a week to 14 days, whereas controls, which had received sort of viruses that had been destroyed by heat, did not become sick. They remained healthy for — for weeks.
KATIE CAMPBELL: What’s strange, Hewson says, is that West Coast starfish have been living with the virus for decades. Researchers detected the densovirus in preserved starfish specimens from as far back as the 1940s.
IAN HEWSON: It’s probably been sort of smoldering sort of at a low level for a very long time, and then eventually it becomes sort of an epidemic.
Something seems to have been the trigger to make this from some sort of benign infection into something that’s really widespread and affecting so many different species.
KATIE CAMPBELL: Now that scientists have identified the virus, the next step for Hewson’s team is investigating what environmental factors might make starfish more susceptible to it.
JUDY WOODRUFF (NewsHour): Major U.S. government agencies have been the target of cyber-attacks of late. The State Department is the latest. During the past week, officials had to temporarily shut down an unclassified e-mail system after a suspected hacking. In recent months, the White House, the Postal Service and the National Weather Service all have been targeted.
Meanwhile, as the holiday season approaches, retailers and the business world are on the lookout for breaches.
A new book breaks down the pervasiveness of what’s happening.
Jeffrey Brown has our conversation.
JEFFREY BROWN (NewsHour): Hardly a week goes by anymore without a report of some major cyber-breach, whether it’s targeting retailers, the government, or any and all of us. The attacks are generated in a new netherworld of crime, some of it individualized, even chaotic, other parts of it extremely well-organized.
Writer and journalist Brian Krebs has uncovered some major breaches, including the one on Target that compromised the credit card data of tens of millions of people. He writes about all of this on his blog Krebs on Security and now in his new book, “Spam Nation.”
And welcome to you.
BRIAN KREBS, Author, “Spam Nation”: Thank you.
JEFFREY BROWN: You are peering a world of cyber-crime that few of us ever see. What does it look like?
BRIAN KREBS: It’s a pretty dark place.
JEFFREY BROWN: It is?
BRIAN KREBS: Yes, absolutely.
But it’s not as dark as you might imagine. If you’re somebody who doesn’t know their way around, there are plenty of people willing to show you the way. They might take a cut of the action to help you do that, but it’s not as dark…
GWEN IFILL (NewsHour): ...... how climate change may be affecting life in Alaska as we know it and the captivating images we see there, from ice to Marine life.
NewsHour science correspondent Miles O’Brien went there to see for himself.
MILES O’BRIEN (NewsHour): Alaska may seem like a place where things don’t change very quickly, the natural beauty is set in stone and is as predictable as the caribou beside the road.
But make no mistake, things are changing here quickly, and not for the better. Alaska is at the frontier of climate change. Scientists are scrambling to try and understand it.
KARL KREUTZ, University of Maine: We know that the Arctic is warming more rapidly than most other places on Earth.
MILES O’BRIEN: To catch up with University of Maine paleoclimatologist Karl Kreutz and his team, we hopped on a plane rigged with skis that landed right on the Ruth Glacier in the heart of the Denali National Park.
KARL KREUTZ: Most glaciers in Alaska are retreating. We’d like to be able to predict with better accuracy of what will happen, but it’s hard to imagine a scenario there where glaciers will not continue to lose mass in this area. The question is how fast.
MILES O’BRIEN: But the answer is unknowable if they don’t know how much ice is here right now.
SETH CAMPBELL, U.S. Army Corps of Engineers: To goal of this specific study is to come up with ice depth measurement across the glacier.
MILES O’BRIEN: Kreutz’s colleague Seth Campbell is a research geophysicist for the U.S. Army Corps of Engineers. He and University of Maine undergrad Abby Bradford spent long, strenuous days on skis towing a ground-penetrating radar up, down and across the glacier.
Islamic State militants are planning to insert operatives into Western Europe disguised as refugees, claim US intelligence sources, who unencrypted locked communications of the caliphate’s leadership.
The militant organization is afraid of using aircraft due to strict security rules, so they use land as an alternative, the US sources told Bild Am Sonntag, a German national Sunday newspaper.
Disguised as refugees from Syria, Islamic State (IS, formerly ISIS) operatives will cross the border to Turkey. Then, using fake passports, they will travel further to European countries to conduct attacks.
“In view of the chaotic conditions on the Syria-Turkey border, it is nearly impossible to catch ISIS-terrorists in the wave of refugees,” wrote Bild Am Sonntag.
Because hundreds of refugees cross the Syrian-Turkish border every day, the jihadists have a good chance of remaining unnoticed in the crowds.
Turkey is also used by jihadists who want to join the IS in Syria, as they don’t need a visa to get there. They go on ‘vacations’ as tourists and upon arrival have almost no trouble finding a way to cross the border.
According to one of Iraq’s foremost security experts with unique access to intelligence, at least 100,000 jihadists were fighting in the ranks of the IS in August.
There are some 15,000 foreign fighters from the IS in Syria alone, including 2,000 Westerners, a US intelligence official told AFP in September.
Germany continues to be one of the main goals of IS
An official from the German Interior Ministry told the paper that the country is in the “focus of jihadist terrorism,” but there is no indication at this time of any concrete attacks.
German security says that about 450 extremist German Muslims traveled in the direction of Syria.
But it is still nearly impossible to track their country’s radicals when they are heading from Germany to Syria, as they don’t need a visa to travel to Turkey, a German official told the Jerusalem Post.
About 150 Islamic fighters have returned from Syria to Germany.
Last week it was revealed that German authorities encouraged some jihadists to leave the country. Ludwig Schierghofer, the chief officer in charge of counterterrorism at Bavaria's LKA investigative police department, told public broadcaster Westdeutscher Rundfunk that such measure is aimed at "protecting our [German] population."
The issue was "to get people out of the country" if there was evidence that "the danger existed that they might commit attacks."
"If somebody had become radicalized and wanted to leave the country, then we tried to either let him depart, or even sought to accelerate their departure using legal means," Schierghofer said.
The measure was introduced in Bavaria, southeastern Germany, in 2009, but then abandoned in 2014 after the authorities understood that they were actually helping IS militants.
IS continues Middle East advance despite US strikes
US-led airstrikes on the Islamic State are failing to stop the advance of the jihadists.
The militants are reportedly approaching the outskirts of the city of Kobani, a town in the Aleppo Governorate in northern Syria near the Turkish border.
The situation in the town prompted some 186,000 Kurds to flee the area across the border into Turkey, and groups of Kurdish volunteers wishing to cross into Syria to defend the town against the IS on Saturday clashed with tear gas-firing Turkish security forces refusing to let them pass.
Around 100,000 people remain in Kobani amid the violence.
“Those who stay in the area are living in very poor conditions, there is drastic shortage of food,” Muhammad, a Kobani resident, told RT.
According to Osman, a Turkey-Syria border resident, Turkish security forces prevent them from helping the Kurds, but the residents of Kobani will continue to assist them where they can.
“We are eyewitnesses of the event. It seems that the whole world has abandoned Kobani,” he told RT. “If the Kurdish forces don’t get the supplies they need there will be a mass slaughter among the Kurdish population.”
He added that so far the local residents “haven’t seen any results of US strikes against the Islamic State.”
President Obama and Texas Sen. Ted Cruz made seemingly conflicting statements about public opinion on the president’s plan to address immigration issues in the U.S.
Obama claimed that “most Americans support the types of reforms I’ve talked about tonight,” in a Nov. 20 address to the nation. Cruz, meanwhile, claimed that “this last election was a referendum on amnesty” and that voters had sent a clear message opposing it.
Obama is right that opinion polls show a majority of Americans support allowing immigrants now living in the country illegally to stay. But fewer Americans support using executive action to accomplish that.
Cruz, on the other hand, is wrong to say that the 2014 election results show that Americans rejected “amnesty” — at least how Cruz defines it. He considers “amnesty” to mean providing a path to citizenship for immigrants in the country illegally. Exit poll data show exactly the opposite.
Obama Right, Mostly
Obama’s announced immigration plan would allow parents who have lived in the U.S. illegally for at least five years, and who also have children who are citizens or legal permanent residents, to remain in the country temporarily, for three years, without threat of deportation, if they pay taxes and pass a background check. The executive action would not apply to anyone who came to the U.S. recently, or who comes in the future, and it would not allow individuals to remain in the country permanently, or grant them citizenship or other benefits reserved for citizens.
A number of opinion polls support Obama’s claim that “most Americans support the types of reforms I’ve talked about tonight.”
An NBC News/Wall Street Journal poll conducted from Nov. 14 to Nov. 17 found that 57 percent of respondents either strongly favored or somewhat favored allowing “foreigners staying illegally in the United States the opportunity to eventually become legal American citizens.” The level of support rose to 74 percent if those people had to “pay a fine, any back taxes, pass a security background check, and take other required steps” to gain citizenship. Obama’s plan doesn’t even go that far.
Likewise, a Pew Research Center poll conducted from Oct. 15 to Oct. 20 found that 71 percent of respondents said that people currently living in the U.S. illegally should be allowed to stay “if certain requirements are met.”
That’s in addition to a CBS News/New York Times poll from Sept. 12 to Sept. 15 that showed 63 percent of those surveyed said that illegal U.S. residents should be allowed to remain in the country.
The NBC News/Wall Street Journal poll had a margin of error of 3.1 percentage points. The Pew Research Center poll had a margin of error of 2.5 percentage points. And the CBS News/New York Times poll had a margin of error of 3 percentage points.
Republican leaders, such as House Speaker John Boehner, have countered that Obama is “ignoring the will of the American people.” And there’s a little something to that as well.
That’s because while polls show majority support for allowing those here illegally to stay, they show less public support for Obama taking executive action to address immigration issues without Congress.
The same NBC News/Wall Street Journal poll cited earlier found that 48 percent of respondents disapproved of Obama taking executive action, or leaned that way, while 38 percent approved of executive action or leaned in that direction.
Similarly, a USA Today poll conducted from Nov. 13 to Nov. 16, with a margin of error of 3.6 percentage points, showed that 46 percent of those asked said Obama should wait for the new Congress in January to pass immigration legislation. On the flip side, 42 percent said that the president should act alone this year to deal with immigration. Another 10 percent of respondents were unsure and 2 percent refused to answer.
The CBS News/New York Times poll from September did find that 51 percent thought Obama should take action if Congress did not. But that may or may not represent “most Americans,” since the poll’s margin of error was 3 percent.
Cruz Wrong
Cruz, during an interview with Fox News host Megyn Kelly, more than once said that “this last election was a referendum on amnesty” and that the clear message was “we don’t want amnesty.” It wasn’t, according to exit poll results.
Election voters, by a margin of 57 percent to 39 percent, said those living in the U.S. illegally but working should be offered legal status, according to the exit poll conducted by Edison Research for the National Election Pool, a consortium of news organizations. The gap is also greater than the margin of error of 3 percentage points to 4 percentage points.
Plus, just 14 percent of voters polled said that illegal immigration was “the most important” issue facing the country today, which also undercuts Cruz’s claim. Voters were given only four choices, and immigration ranked third behind the economy (45 percent) and health care (25 percent).
Republican Rep. Michele Bachmann wrongly suggested that Obama is granting citizenship and voting privileges to immigrants who are in the country illegally. His executive actions do neither of those.
In a Nov. 20 email fundraising appeal for her political action committee — sent before Obama’s prime-time speech that evening but after details of his plan had been reported – Bachmann wrote: “What could more fundamentally transform our nation than making our precious American citizenship — and the rule of law — merely commodities to be dispensed with as our Imperial President sees fit, flooding our land with illegal foreigners which will forever alter our way of life?”
She went on to imply that the unauthorized immigrants affected by Obama’s actions would be able to vote. “The Democrats are licking their wounds after their terrible defeats this month, and are viewing these millions of illegal aliens as votes for their leftist agenda in two years.”
Obama’s plan in no way bestows citizenship on immigrants who are in the country illegally. And only U.S. citizens have the right to vote in federal and state elections.
Bachmann made a similar false claim about voting rights last year, wrongly saying that Obama had granted the right to vote to unauthorized immigrants in 2012 when he had only deferred deportation procedures for children who had been brought to the U.S. illegally by their parents.
The executive actions provide a temporary relief of three years from the threat of deportation to parents who are in the country illegally but who have children who are U.S. citizens or legal permanent residents. The parents must have lived in the United States for at least five years, and they must register, and pass background checks in order to obtain the reprieve. They also must pay taxes and prove that their child was born on or before Nov. 20. If they meet the requirements, they would also be given work authorization for the three-year period.
The president’s plan also expands an earlier order to delay deportation of young people who were brought to the U.S. illegally as children and who meet certain education criteria. Before, those so-called DREAMers — named for failed legislation that addressed this group of immigrants – had to have entered the country before June 15, 2007, and be born after 1981. Obama changed that cut-off to Jan. 1, 2010, and eliminated the stipulation on age. The old rules said eligible individuals would receive deferred action on deportation for two years. Obama’s new action increases that to three years.
The administration’s actions give both groups of immigrants temporary reprieve from the threat of deportation, but they don’t grant citizenship or even put these immigrants on a path to citizenship, something the 2013 bipartisan Senate immigration bill would have established. That bill passed the Senate in June 2013 but hasn’t been taken up by the House. Other aspects of Obama’s actions pertain to those with legal permanent resident status and foreign workers with visas.
The White House estimates that nearly 5 million immigrants who are in the country illegally would be affected by the executive action. There are an estimated 11 million immigrants illegally living in the U.S., according to the Pew Research Center. The center estimates Obama’s action on deferred deportation would affect about 4 million immigrants, most of whom — 3.5 million — are parents whose children have legal status.
The White House fact sheet on the actions makes only two mentions of citizenship, and neither has anything to do with those in the country illegally. It says the Department of Homeland Security will launch a “citizenship awareness media campaign” for legal permanent residents, and the department will “expand an existing policy to provide relief to spouses and children of U.S. citizens seeking to enlist in the military, consistent with a request made by the Department of Defense.”
The Pew Research Center notes in its report on the executive actions that the unauthorized immigrants affected wouldn’t be eligible for certain government benefits including subsidies for obtaining insurance through the Affordable Care Act.
It’s the latest round in a fight between North Carolina regulators and a charter-school power broker who has tried to keep the financial details of his companies secret.
Last week, it appeared that a North Carolina charter school chain had finally put an end to more than a month of wrangling with state regulators when it turned over salary data for administrators working at the schools.
But the salary list has a curious omission. The son of the schools' founder, despite working as "Information Systems Admin" at one of his father's schools, is missing from the disclosures.
As ProPublica detailed last month, both the chain of charter schools and the company that manages them were founded by a politically connected local businessman, Baker Mitchell. Millions of public dollars have flowed through the nonprofit schools to Mitchell's for-profit charter-management firm and another company he owns.
A believer in the power of the free market to drive education reform, Mitchell makes no apologies about the arrangement. He has also fought to keep the financial details of his management firm secret.
In a push for more transparency on how public dollars for charter schools are spent, North Carolina regulators this summer ordered charter schools to turn over the salaries of any management-company employees assigned to work at the schools.
Nick Mitchell, Baker Mitchell's son, is on the payroll of Roger Bacon Academy, his father's for-profit management company, according to both his LinkedIn profile and the schools' own organizational charts. The younger Mitchell is the only management firm employee listed on the schools' organizational charts whose salary is not on the list turned over to regulators.
The North Carolina State Board of Education last week took Mitchell's charter schools off financial probation after finally receiving the salary list. After ProPublica flagged the missing salary to the state board, an agency attorney, Katie Cornetto, said the state has "asked the school to clarify" and is awaiting a response.
We also requested comment from Baker Mitchell and John Ferrante, the chair of the nonprofit board that oversees the schools. In an email reply ending with a smiley-face emoticon, Ferrante declined to answer ProPublica's question about the missing salary. (Read the email exchange.) Mitchell did not respond to the request for comment.
The salary list submitted to regulators last week is marked as containing "proprietary and confidential" trade secrets "owned by a private person, Roger Bacon Academy." The State Board of Education released the list on Monday.
Examiners are reportedly blocked from doing their job as “London Whale” trades blow up.
As the Federal Reserve Bank of New York moved to beef up its oversight of Wall Street two years ago, the team charged with supervising the nation's largest bank, JPMorgan Chase, was in turmoil.
New York Fed examiners embedded at JPMorgan complained about being blocked from doing their jobs. In frustration, some requested transfers. Top New York Fed managers knew about the problems, according to interviews and secret recordings of internal meetings obtained by ProPublica. Similar frustrations had surfaced among examiners at other banks as well.
"You're not the only one experiencing difficulties at an institution," one New York Fed manager told Carmen Segarra, an examiner stationed at Goldman Sachs who made the surreptitious recordings. "You've heard about all the issues at JPMorgan."
In meetings in early 2012, the manager, Johnathan Kim, described how bosses in the JPMorgan team had stymied examiners by blocking access to bank information and constraining independent inquiries in ways that "grinds everything to a halt."
The revelations of internal strife add new details to the summary of an investigation by the Federal Reserve Board's inspector general into the New York Fed's supervision of JPMorgan before the "London Whale" trading scandal. The disastrous series of trades, which became public in April 2012, cost JPMorgan $7 billion in losses, settlements and fines and forced it to admit to securities law violations.
In the summary of its two-year investigation, which was released last month, the IG stopped short of saying the New York Fed could have detected the trading risk before it blew up. Still, it chastised the bank, saying it had identified risky activities in JPMorgan's investment office years earlier but didn't follow up or tell the bank's primary regulator, the Office of the Comptroller of the Currency (OCC), as procedures demanded.
The IG's office has withheld its full investigation report, saying it contained information that was "confidential" and "privileged." A spokesman declined to provide even a page count.
The New York Fed declined to respond to detailed questions. JPMorgan also declined to comment.
The IG's summary offered only a glimpse into the job performance of what is arguably the most important U.S. financial regulator. The New York Fed's primary responsibility is to protect the safety and soundness of the financial system. After the 2008 financial crisis, Congress gave the Federal Reserve System the task of supervising the biggest and most complex financial institutions whose failure could disrupt the economy. Because of its location, the New York Fed has direct responsibility for many of Wall Street's biggest players. Yet its supervisory culture has been slow to adapt, as ProPublica and This American Life recently reported.
To comply with its new Congressional mandate, the New York Fed went on a hiring spree in 2011, in part to bring in more specialized examiners to station inside JPMorgan, Goldman Sachs, Citigroup and other systemically important financial institutions. These examiners, called "risk specialists," were chosen because of their expertise in areas such as compliance, credit risk and operations. Their task was to continuously monitor their institutions to see how they fared in these key areas. The specialists reported to two bosses – managers for their specialty and the head New York Fed officer at the bank.
By early January 2012, it was clear that this dual reporting system had become a problem at several institutions and that on some teams the new experts were encountering resistance from their non-specialist colleagues and supervisors. In a meeting of legal and compliance specialists caught on Segarra's recordings, examiners complained about management not valuing their expertise and struggles over who had final say over examinations.
In some cases, the senior New York Fed person on site at the bank would not allow the new examiners to act on their knowledge and work independently. The JPMorgan team was widely recognized as dysfunctional in this regard, according to discussions on Segarra's tapes and interviews with two former Fed employees, who continue to work in finance and asked for anonymity to discuss confidential information.
Segarra had joined the New York Fed as a legal and compliance examiner in November 2011. She was fired seven months later after a dispute with her bosses in which she refused to rescind a detrimental finding about Goldman Sachs. The New York Fed says Segarra's firing was unrelated to her supervision of Goldman; her lawsuit contesting the firing was dismissed without a ruling on the merits and is on appeal.
In January 2012, to build her own record of events, Segarra began secretly recording meetings with colleagues. She was among roughly 230 New York Fed supervisors assigned to the largest financial institutions. The risk specialists were a small subset of that group in a given area were called a "risk stripe." The members of each stripe from the different systemically important banks met weekly to discuss the issues they were facing on their respective teams. Tensions within the JPMorgan team were common knowledge, according to a former examiner.
On the recordings, Kim put the responsibility for the tensions at the JPMorgan team on Dianne Dobbeck, then the senior New York Fed supervisor at the bank. The issue came up when Kim tried to assuage Segarra about pressures she was experiencing at Goldman. In some respects, he said, the situation was worse at JPMorgan.
"You look at JPMC, that is an iron hand woman," Kim said, referring to Dobbeck. "They have already made their determination. They don't care what risk do[es]."
Kim added that the legal and compliance specialist embedded at JPMorgan wasn't allowed "access to anything — nada." Dobbeck expected the risk specialists to follow orders, not think for themselves, Kim indicated.
"You do what we tell you," he said, portraying Dobbeck.
"Hold on. How am I being a risk expert here?" he continued, mimicking the perspective of a risk specialist. "How am I being independent?"
In another meeting, Kim said examinations at JPMorgan had been stymied because the Fed leadership inside the bank wouldn't allow any investigation until they had a complete understanding of all the issues. "They want all the information, and therefore just [Kim makes a crunching sound] grinds everything to a halt until they come to understand it."
Kim declined to respond to questions.
The former examiner, who was not on the JPMorgan team but maintained good contacts with those working under Dobbeck, echoed Kim's characterizations. The continuous monitoring that was supposed to take place bogged down when all meetings and document requests had to be cleared by Dobbeck, the examiner remembers his colleagues telling him. "The examination scope was limited even though the point of risk specialists was there was supposed to be no limit to their scope," he said.
Jamie Dimon, the chairman, president and CEO at JPMorgan, conceded in congressional testimony about the London Whale in 2012 that the bank's risk processes "were not as formal or robust as they should have been."
An exhaustive U.S. Senate subcommittee report last year was more blunt: "[T]he whale trades exposed a bank culture in which risk limit breaches were routinely disregarded, risk metrics were frequently criticized or downplayed, and risk evaluation models were targeted by bank personnel seeking to produce artificially lower capital requirements."
In early January 2012, Sarah Dahlgren, the head of supervision at the New York Fed, attended a meeting of legal and compliance risk specialists that Segarra recorded. Dahlgren listened to complaints about the resistance the examiners were encountering. "Other views on this dual reporting?" she asked the risk specialists. "This is obviously an issue that has come up, and I've heard, on the GE [Capital] team last week, too, and the JPM [JPMorgan] team, this issue is one that is alive."
Dahlgren declined to respond to questions.
The former examiner said that by mid-2012, there was an effort by a number of risk specialists on the JPMorgan team to transfer to other institutions. By the end of the year several left the team to join Fed supervisors at other banks. "A lot of people wanted to leave because they felt their information was getting stonewalled or it was not getting traction," the former examiner said.
Dobbeck did not respond to a detailed request for comment. She is a New York Fed veteran who started as a financial analyst in the policy department in 1997. By September 2005, she had moved to the supervision side of the bank and become the New York Fed's "Central Point of Contact" for Citigroup. Dobbeck held the job until May 2007, a crucial period for Citigroup in the lead-up to the financial crisis.
At the outset of 2005, the Federal Reserve had downgraded Citigroup because of " demonstrated weakness in the company's ability to comply with all rules and regulations." By February 2006, the New York Fed determined that Citigroup had made improvements. The Federal Reserve raised Citigroup's rating. At that point, however, the bank's production of structured mortgage bonds called collateralized debt obligations went into overdrive. The bank increasingly relied on off-balance sheet entities in which to stash these mortgage assets. When their value plummeted, they flooded back onto the bank's balance sheets to catastrophic effect.
After the 2008 meltdown, Congress created the Financial Crisis Inquiry Commission to investigate the causes. The commission focused much of its Wall Street investigation on Citigroup, which got the biggest government bank bailout from the financial crisis, $476 billion in cash and guarantees.
Commission investigators conducted several interviews with Dobbeck, who acknowledged to them that she and her colleagues had missed what was happening at Citigroup. They had looked at mortgages the bank was originating and managing, but not "the potential exposure they had through their structured activity," she told FCIC investigators.
Dobbeck also described the poor working relationship the New York Fed team had with the OCC, the other big federal supervisor onsite at Citigroup. She characterized relations between the two regulator teams as "assertive and tense." The OCC regulators, she said, "would prefer for us not to attend meetings or have discussions with them."
One of the top OCC supervisors at Citigroup at the time was Scott Waterhouse. Years later, in 2012, when Dobbeck ran the New York Fed team at JPMorgan, her OCC counterpart at the bank was again Waterhouse. He did not respond to emailed questions.
Last year's examination of the London Whale trades by the Senate Permanent Subcommittee on Investigations criticized the OCC's efforts but did not look into the New York Fed. But if the primary regulator, in this case the OCC, fails "to notice and follow up on red flags," as the Senate investigation concluded, the Fed is supposed to step in, according to a 2009 review by the Federal Reserve Board.
Bart Dzivi investigated the New York Fed's activities as special counsel for the Financial Crisis Inquiry Commission and conducted the panel's interviews with Dobbeck in 2010. Dzivi told ProPublica that Dobbeck was "smart, pleasant and exactly the wrong type of person to be in charge of any safety and soundness position" because he believed she lacked the resolve to stand up to the banks.
After leading the Citigroup team, Dobbeck was promoted to head of the credit risk department for the New York Fed's Bank Supervision group in June 2007. Two years later she was made a senior vice president. By 2011, Dobbeck was the top New York Fed supervisor at JPMorgan. She left the JPMorgan team in late 2013 for another promotion, this time to be the head of all supervisory policy for the New York Fed.
The Fed inspector general's summary of the London Whale investigation does not name Dobbeck or anyone else, and some of the problems the IG chose to highlight predate her time leading the JPMorgan team. The summary report catalogs several missed warning signs, including reviews in 2008 and 2010 of JPMorgan's Chief Investment Office that were planned but never took place.
In confidential reports before and immediately after the financial crisis, the Federal Reserve Board in Washington, D.C., repeatedly faulted the New York Fed for doing a poor job of supervision. These reports, made public by the financial crisis commission, cite persistent problems and offer recommendations including "leveraging the knowledge and expertise of specialized examiners."
The commission's release of that information in 2011 marks the last detailed public look at the New York Fed's supervision by a government entity.
By comparison, the Senate Permanent Subcommittee on Investigations released more than 1,200 pages of documents, including emails and internal reports from the OCC and JPMorgan, in its London Whale investigation. It held hours of public hearings with key players, including the Comptroller of the Currency Thomas Curry, who pledged to reform his agency and then acted to do so.
To date, the only public review of the New York Fed's handling of the London Whale is the inspector general's summary report. It is four pages long.
WILLIAM BRANGHAM (NewsHour): The town of Westminster, Massachusetts — population 7,300 — is a small, quiet community about an hour west of Boston.
When the local health board holds meetings, it usually happens here in this room, where you can get advice about things like septic tanks and mosquito control. But not on this day. This meeting Wednesday night had to be moved to the local elementary school because the town is up in arms.
MAN: You people make me sick!
WILLIAM BRANGHAM: Why so mad? That Board of Health is proposing to make Westminster the first town in the entire country to completely ban the sale of tobacco.
ANDREA CRETE, WESTMINSTER BOARD OF HEALTH: It can be argued that the Board of Health permitting these establishments to sell these dangerous products that, when used as directed, kills 50 percent of its users, ethically goes against our public health mission.
WILLIAM BRANGHAM: The town’s proposal would make it illegal to sell any product containing nicotine within city limits. So no cigarettes, chewing tobacco, cigars, vaporizers. You’d still be able to smoke or use tobacco in town, just not buy it.
ANDREA CRETE: If we can prevent children from having access and exposure to tobacco and nicotine products and reduce the chances of them smoking or using them, then we’ve essentially saved lives.
WILLIAM BRANGHAM: While it’s already illegal for kids to buy tobacco, the health board says the tobacco industry makes products like these — shiny, fruit flavored cigars and tobacco products — in order to lure kids into a lifetime habit. The industry denies targeting kids.
WILLIAM BRANGHAM: The effort began when one of the three health board members suggested the tobacco ban, following the lead of other health boards in other Massachusetts towns that had limited where residents could smoke or what kind of tobacco products they could buy. Westminster’s volunteer board then consulted a specialist to examine the pros and cons of a total ban.
MEGAN THOMPSON (NewsHour): Autumn means it’s harvest time in Iowa, the heart of America’s Heartland. Farmer Jeff Jorgenson is busy harvesting soybeans. He also grows corn on about 2,000 acres in the southwest corner of the state.
Farming is big business here in Iowa. This state is the biggest producer of corn in the country. And it’s second only to Illinois in the production of soybeans.
For Jorgenson – whose family’s been farming for four generations – it’s all about keeping his yields as high as he can.
JEFF JORGENSON, farmer: Yield monitor’s here.
MEGAN THOMPSON: And one of the biggest battles he fights is against weeds.
JEFF JORGENSON: A weed in the field’s going to take moisture, going to take sunlight, nutrients away from the plants surrounding it. And that’s why we have to keep clean fields.
MEGAN THOMPSON: But Jorgenson says, keeping “clean” fields has been getting harder and harder. Like many farmers, he relied for years mainly on an herbicide called “Roundup” that’s manufactured by Monsanto.
Roundup use exploded in the mid-90’s with the introduction of new genetically modified crops that dominate the market today. The crops were engineered to withstand Roundup. So farmers could just spray an entire field, and the herbicide would kill the weeds, but not the crops.
JEFF JORGENSON: Any weed you had in the field, Roundup took care of. Roundup revolutionized weed management for farmers.
MEGAN THOMPSON: Jorgenson says it all worked great, for awhile. He no longer had to spend lots of time plowing to kill weeds. But over time, Roundup and its generic versions – all of which contain a chemical called glyphosate – stopped working so well.
SUMMARY: Syndicated columnist Mark Shields and New York Times columnist David Brooks join Hari Sreenivasan to discuss the week’s news, including the carbon deal between the United States and China, legislative action on the Keystone XL pipeline and how Republicans may respond if President Obama issues an executive action on immigration reform.
HARI SREENIVASAN (NewsHour): Casinos in the U.S. rack up billions of dollars in profits each year. But as they pop up in more states and expand in places like New England, classic gambling spots suffer, case in point, Atlantic City.
Our economics correspondent Paul Solman has the story, part of his ongoing reporting Making Sense of financial news.
MAN: I got laid off at Showboat August 31 — 28 years.
MAN: We’re actually fighting for our lives out here.
PAUL SOLMAN (NewsHour): Workers in Atlantic City, New Jersey, protesting a threatened slash in pay and benefits at the latest casino under siege here, the Trump Taj Mahal.
What will you do if the Taj closes down?
WOMAN: I don’t know. I don’t have an idea, because no jobs. So, what do I do?
PAUL SOLMAN: Four casinos closed already this year, thousands unemployed, and now the Taj, unless its 3,000 or so workers and the city make concessions.
Hotel union president Bob McDevitt.
C. ROBERT MCDEVITT, President, UNITE-HERE Local54: The average wage is about $12 an hour. What makes these middle-class jobs is the health care and the — and the retirement plan. And that’s part of the original legislation that brought gambling to Atlantic City.
PAUL SOLMAN: It was an economic strategy forged to restore the city to its heydays, says Mayor Don Guardian.
MAYOR DON GUARDIAN, Atlantic City: Atlantic city’s been around for 160 years, it’s been a destination.
PAUL SOLMAN: First as a health spa, with rolling chairs to ferry the feeble.
DON GUARDIAN: Then we built beautiful Victorian hotels to attract the rich people from Philadelphia and New York, and that worked for about 40 years.
PAUL SOLMAN: Into the 20th century, that is.
DON GUARDIAN: Then we decided to ignore prohibition. That was very successful.
PAUL SOLMAN: So successful that when the game of “Monopoly” was popularized in the 1930s, its board was laid out as Atlantic City.
HARI SREENIVASAN (NewsHour): Earlier today, the nation’s top defense official said there are systematic problems in the management of America’s nuclear weapons stockpile, adding that without billions of dollars for improvements, the safety and security of the force could be undermined.
Chief foreign affairs correspondent Margaret Warner reports.
CHUCK HAGEL, Secretary of Defense: Our nuclear enterprise is foundational to America’s national security and the resources and attention we commit to the nuclear force must reflect that.
MARGARET WARNER (NewsHour): Defense Secretary Chuck Hagel announced the shake-up after two reviews that began in February. They found the country’s aging nuclear infrastructure, including facilities, silos and its nuclear submarine fleet, has decayed markedly and will cost billions of dollars to fix.
CHUCK HAGEL: The internal and external reviews I ordered show that a consistent lack of investment and support for our nuclear forces over far too many years has left us with too little margin to cope with mounting stresses.
MARGARET WARNER: Among other things, the findings revealed equipment problems, including the fact that crews maintaining the nation’s 450 intercontinental ballistic missiles shared a single specialized wrench that’s been shipped from base to base, and blast doors atop 60-year-old silos that no longer seal.
These lapses were attributed to a culture of micromanagement and bureaucracy that left top-level officials unaware of problems and personnel shortages and poor career advancement opportunities in the infrastructure force.
A series of embarrassing incidents led to the reviews. In 2007, six nuclear warheads, still attached to missiles, were flown across the country, in a violation of safety rules. In 2013, the Air Force decertified 17 launch officers in North Dakota for poor performance. And this year, a cheating scandal involving nuclear launch officers erupted at Malmstrom Air Force Base in Montana. The head of the nuclear wing there resigned last March, and nine other officers were removed.
In the meantime, the Navy had its own exam cheating scandal involving reactor training instructors.
Today, Hagel said the Pentagon took its eye off the ball in recent years, and has to act quickly.
ACTOR: You must not just take his blood. You must take his hope
JEFFREY BROWN (NewsHour): In 2009, Maziar Bahari was held for 118 days in solitary confinement in a Tehran prison, a very real ordeal dramatized in the new film “Rosewater.” (trailer link)
Bahari was a Canadian citizen who’d returned to his native Iran as a journalist working for Western media organizations, his assignment, to cover a momentous election that would end in mass demonstrations and mass arrests, after reformer Mir Hossein Mousavi’s challenge to President Mahmoud Ahmadinejad ended in a defeat widely condemned and discredited as fraudulent.
The film shows how Bahari, played by actor Gael Garcia Bernal, met and interviewed protagonists on both sides, before being arrested and charged as a spy. He then endures interrogation by a man known only as Rosewater.
One bit of absurdist evidence, an actual appearance in a Tehran cafe that Bahari had made on the Comedy Central program “The Daily Show.”
MAN: What do I have in common with you?
MAN: Who is the number one enemy of the United States?
MAN: Al-Qaida.
MAN: Al-Qaida is also the number one enemy of Iran.
JON STEWART, “Rosewater”: And then you are going to back up and just go out of frame that way.
JEFFREY BROWN: That connection and the courage and even humor shown by Bahari even in the face of torture drew the real-life host of “The Daily Show,” Jon Stewart, to the story, and to his first foray into directing a feature film.
The Justice Department’s inquiry comes after a ProPublica investigation and years of complaints from landowners who say they have been underpaid for leasing land to the energy giant for drilling.
The U.S. Department of Justice is investigating how Chesapeake Energy pays landowners for the natural gas it drills on their property, according to disclosures made earlier this month in the company's filings with the Securities and Exchange Commission.
The probe comes after years of complaints by landowners that they are being underpaid, and an investigation by ProPublica, which found the company was using the fees it had been been paying those landowners to repay billions of dollars of hidden corporate debt instead.
Chesapeake received subpoenas about its royalty practices from the federal government and several states, the company stated Nov. 6. The company did not respond to a request for comment from ProPublica.
In lawsuits filed in several states, Chesapeake has been accused of inflating its operating expenses and then deducting those expenses from the share of income it pays for the right to drill on peoples' land. Chesapeake has paid hundreds of millions of dollars in judgments and to settle some of these cases.
In mid-2013, landowners in Pennsylvania who had leased their gas rights to Chesapeake saw the payments they were receiving abruptly slashed by as much as 97 percent. In some cases checks for thousands of dollars a month were replaced with payments for less than a dollar. Those early complaints prompted a probe by Pennsylvania's Attorney General and a letter from the state's governor, Tom Corbett, to Chesapeake's chief executive calling the practices "unfair and perhaps illegal."
A ProPublica investigation traced that shift in payments to a series of complicated corporate transactions, worth nearly $5 billion, in which Chesapeake sold its pipelines for an inflated price, but then signed long-term contracts to pay the pipelines' new owner exorbitant fees to continue to use them. While Chesapeake raised billions through the sale, it committed to repay all of that money and more in fees. The fees Chesapeake paid to the new company, called Access Midstream Partners, were then charged back to landowners, erasing much of their share of the economic bounty from the surge in natural gas drilling in the Marcellus Shale. At the same time that landowners' gas income dropped, Chesapeake was attempting to raise cash to rescue itself from enormous and mounting corporate debt.
"I think they looked at it as an opportunity to effectively get disguised financing ... that is going to be repaid at a premium,'' an executive of an energy company who routinely does business with Chesapeake told ProPublica at the time.
In July, after news of the deals was published, county commissioners in Bradford County, Pennsylvania, where much of the Marcellus drilling was taking place, appealed to U.S. Attorney Peter Smith to investigate the company. The commissioners wrote that ProPublica's reporting pointed to possible "violations of state and federal law." Several new lawsuits have also been filed against the company in Pennsylvania and elsewhere.
Throughout 2013 and early 2014, Chesapeake never responded to any of ProPublica's initial written questions or requests for interviews about the size or origins of its corporate debt and the sale of its pipeline companies. But after receiving our written questions, Chesapeake for the first time acknowledged in its quarterly financial filings that it had $36 billion dollars in "off-balance-sheet arrangements," and that much of it was related to its pipeline businesses.
Chesapeake faces other inquiries as well. Following a Reuters investigation alleging Chesapeake rigged land leasing prices in Michigan, the company was charged with antitrust violations by Michigan's state attorney general. It faces separate racketeering charges in the state as well. Chesapeake has said both sets of charges are without merit, and the two cases are expected to go to trial. The company's financial disclosures state that Chesapeake has been served federal subpoenas related to anti-trust inquiries in Michigan as well.
The federal government has significantly expanded undercover operations in recent years, with officers from at least 40 agencies posing as business people, welfare recipients, political protesters and even doctors or ministers to ferret out wrongdoing, records and interviews show.
At the Supreme Court, small teams of undercover officers dress as students at large demonstrations outside the courthouse and join the protests to look for suspicious activity, according to officials familiar with the practice.
At the Internal Revenue Service, dozens of undercover agents chase suspected tax evaders worldwide, by posing as tax preparers, accountants drug dealers or yacht buyers and more, court records show.
At the Agriculture Department, more than 100 undercover agents pose as food stamp recipients at thousands of neighborhood stores to spot suspicious vendors and fraud, officials said.
Undercover work, inherently invasive and sometimes dangerous, was once largely the domain of the F.B.I. and a few other law enforcement agencies at the federal level. But outside public view, changes in policies and tactics over the last decade have resulted in undercover teams run by agencies in virtually every corner of the federal government, according to officials, former agents and documents.
Some agency officials say such operations give them a powerful new tool to gather evidence in ways that standard law enforcement methods do not offer, leading to more prosecutions. But the broadened scope of undercover work, which can target specific individuals or categories of possible suspects, also raises concerns about civil liberties abuses and entrapment of unwitting targets. It has also resulted in hidden problems, with money gone missing, investigations compromised and agents sometimes left largely on their own for months.
“Done right, undercover work can be a very effective law enforcement method, but it carries serious risks and should only be undertaken with proper training, supervision and oversight,” said Michael German, a former F.B.I. undercover agent who is a fellow at New York University’s law school. “Ultimately it is government deceitfulness and participation in criminal activity, which is only justifiable when it is used to resolve the most serious crimes.”
Some of the expanded undercover operations have resulted from heightened concern about domestic terrorism since the Sept. 11, 2001, attacks.
But many operations are not linked to terrorism. Instead, they reflect a more aggressive approach to growing criminal activities like identity theft, online solicitation and human trafficking, or a push from Congress to crack down on more traditional crimes.
At convenience stores, for example, undercover agents, sometimes using actual minors as decoys, look for illegal alcohol and cigarette sales, records show. At the Education Department, undercover agents of the Office of Inspector General infiltrate federally funded education programs looking for financial fraud. Medicare investigators sometimes pose as patients to gather evidence against health care providers. Officers at the Small Business Administration, NASA and the Smithsonian do undercover work as well, records show.
Part of the appeal of undercover operations, some officials say, is that they can be an efficient way to make a case.
“We’re getting the information directly from the bad guys — what more could you want?” said Thomas Hunker, a former police chief in Bal Harbour, Fla., whose department worked with federal customs and drug agents on hundreds of undercover money-laundering investigations in recent years.
Mr. Hunker said sending federal and local agents undercover to meet with suspected money launderers “is a more direct approach than getting a tip and going out and doing all the legwork and going into a court mode.”
“We don’t have to go back and interview witnesses and do search warrants and surveillance and all that,” he added.
But the undercover work also led federal auditors to criticize his department for loose record-keeping and financial lapses, and Mr. Hunker was fired last year amid concerns about the operations.
‘A Critical Tool’
Most undercover investigations never become public, but when they do, they can prove controversial. This month, James B. Comey, the director of the F.B.I., was forced to defend the bureau’s tactics after it was disclosed that an agent had posed as an Associated Press reporter in 2007 in trying to identify the source of bomb threats at a Lacey, Wash., high school. Responding to criticism from news media advocates, Mr. Comey wrote in a letter to The New York Times that “every undercover operation involves ‘deception,’ which has long been a critical tool in fighting crime.”
Just weeks before, the Drug Enforcement Administration stoked controversy after disclosures that an undercover agent had created a fake Facebook page from the photos of a young woman in Watertown, N.Y. — without her knowledge — to lure drug suspects.
And in what became a major political scandal for the Obama administration, agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives allowed guns to slip into Mexico in 2011 in an operation known as Fast and Furious that involved undercover operations.
In response to that episode, the Justice Department issued new guidelines to prosecutors last year designed to tighten oversight of undercover operations and other “sensitive” investigative techniques, officials said. Before prosecutors approve such tactics, the previously undisclosed guidelines require that they consider whether an operation identifies a “clearly defined” objective, whether it is truly necessary, whether it targets “significant criminal actors or entities,” and other factors, the officials said.
Peter Carr, a department spokesman, said that undercover operations are necessary in investigating crime but that agents and prosecutors must follow safeguards. “We encourage these operations even though they may involve some degree of risk,” he said.
Those guidelines apply only to the law enforcement agencies overseen by the Justice Department. Within the Treasury Department, undercover agents at the I.R.S., for example, appear to have far more latitude than do those at many other agencies. I.R.S. rules say that, with prior approval, “an undercover employee or cooperating private individual may pose as an attorney, physician, clergyman or member of the news media.”
An I.R.S. spokesman acknowledged that undercover investigators are allowed to pose in such roles with approval from senior officials. But the agency said in a statement that senior officials “are not aware of any investigations where special agents have ever posed as attorneys, physicians, members of the clergy or members of the press specifically to gain information from a privileged relationship.”
The agency declined to say whether I.R.S. undercover agents have posed in these roles in an effort to get information that was not considered “privileged,” meaning the type of confidential information someone shares with a lawyer or doctor.
José Marrero, a former I.R.S. supervisor in Miami, said he knew of situations in which tax investigators needed to assume the identity of doctors to gain the trust of a medical professional and develop evidence that is tightly held.
“It’s very rare that you do that, but it does happen,” Mr. Marrero, who has a consulting firm in Fort Lauderdale, Fla., and continues to work with federal agents on undercover investigations, said in an interview. “These are very sensitive jobs, and they’re scrutinized more closely than others.”
Oversight, though, can be minimal. A special committee meant to oversee undercover investigations at the Bureau of Alcohol, Tobacco, Firearms and Explosives, for instance, did not meet in nearly seven years, according to the Justice Department’s inspector general. That inquiry found that more than $127 million worth of cigarettes purchased by the bureau disappeared in a series of undercover investigations that were aimed at tracing the black-market smuggling of cigarettes.
In one investigation, the bureau paid an undercover informant from the tobacco industry nearly $5 million in “business expenses” for his help in the case. (The agency gained new authority in 2004 allowing it to take money seized in undercover investigations and “churn” it back into future operations, a source of millions in revenue.)
Financial oversight was found lacking in the I.R.S.’s undercover operations as well. Detailed reviews of the money spent in some of its undercover operations took as long as four and a half years to complete, according to a 2012 review by the Treasury Department’s inspector general.
Wires Crossed
Across the federal government, undercover work has become common enough that undercover agents sometimes find themselves investigating a supposed criminal who turns out to be someone from a different agency, law enforcement officials said. In a few situations, agents have even drawn their weapons on each other before realizing that both worked for the federal government.
“There are all sorts of stories about undercover operations gone bad,” Jeff Silk, a longtime undercover agent and supervisor at the Drug Enforcement Administration, said in an interview. “People are always tripping and falling over each other’s cases.”
Mr. Silk, who retired this year, cited a case that he supervised in which the D.E.A. was wiretapping suspects in a drug ring in Atlanta, only to discover that undercover agents from Immigration and Customs Enforcement were trying to infiltrate the same ring. The F.B.I. and the New York Police Department were involved in the case as well.
To avoid such problems, officials said, they have tightened “deconfliction” policies, which are designed to alert agencies about one another’s undercover operations. But problems have persisted, the officials said.
It is impossible to tell how effective the government’s operations are or evaluate whether the benefits outweigh the costs, since little information about them is publicly disclosed. Most federal agencies declined to discuss the number of undercover agents they employed or the types of investigations they handled. The numbers are considered confidential and are not listed in public budget documents, and even Justice Department officials say they are uncertain how many agents work undercover.
But current and former law enforcement officials said the number of federal agents doing such work appeared to total well into the thousands, with many agencies beefing up their ranks in recent years, or starting new undercover units. An intelligence official at the Department of Homeland Security, who spoke on condition of anonymity to discuss classified matters, said the agency alone spent $100 million annually on its undercover operations. With large numbers of undercover agents at the F.B.I. and elsewhere, the costs could reach hundreds of millions of dollars a year.
In a sampling of such workers, an analysis of publicly available résumés showed that since 2001 more than 1,100 current or former federal employees across 40 agencies listed undercover work inside the United States as part of their duties. More than half of all the work they described is in pursuit of the illicit drug trade. Money laundering, gangs and organized crime investigations make up the second-largest group of operations.
Significant growth in undercover work involves online activity, with agents taking to the Internet, posing as teenage girls to catch predators or intercepting emails and other messages, the documents noted. The F.B.I., Department of Homeland Security and Pentagon all have training programs for online undercover operations.
Defendants who are prosecuted in undercover investigations often raise a defense of “entrapment,” asserting that agents essentially lured them into a criminal act, whether it is buying drugs from an undercover agent or providing fraudulent government services.
But the entrapment defense rarely succeeds in court.
In terrorism cases — the area in which the F.B.I. has used undercover stings most aggressively — prosecutors have a perfect record in defeating claims of entrapment. “I challenge you to find one of those cases in which the defendant has been acquitted asserting that defense,” Robert S. Mueller III, a former F.B.I. director, said at an appearance this year.
The Times analysis showed that the military and its investigative agencies have almost as many undercover agents working inside the United States as does the F.B.I. While most of them are involved in internal policing of service members and defense contractors, a growing number are focused, in part, on the general public as part of joint federal task forces that combine military, intelligence and law enforcement specialists.
At the Supreme Court, all of the court’s more than 150 police officers are trained in undercover tactics, according to a federal law enforcement official speaking on condition of anonymity because it involved internal security measures. At large protests over issues like abortion, small teams of undercover officers mill about — usually behind the crowd — to look for potential disturbances.
The agents, often youthful looking, will typically “dress down” and wear backpacks to blend inconspicuously into the crowd, the official said.
At one recent protest, an undercover agent — rather than a uniformed officer — went into the center of a crowd of protesters to check out a report of a suspicious bag before determining there was no threat, the official said. The use of undercover officers is seen as a more effective way of monitoring large crowds.
A Supreme Court spokesman, citing a policy of not discussing security practices, declined to talk about the use of undercover officers. Mr. German, the former F.B.I. undercover agent, said he was troubled to learn that the Supreme Court routinely used undercover officers to pose as demonstrators and monitor large protests.
“There is a danger to democracy,” he said, “in having police infiltrate protests when there isn’t a reasonable basis to suspect criminality.”
GWEN IFILL (NewsHour): Over the last few years, a number of academic gains have been made by historically disadvantaged students, including African-Americans and Latinos. But Native American students have lost ground since 2008, with only about half earning a diploma.
In Alaska, an effort is under way to turn that around by creating more teachers within the Native community.
The “NewsHour's” April Brown reports as part of our American Graduate series.
APRIL BROWN (NewsHour): Alaska is often called the last frontier. A phrase that seems fitting for the town of Dillingham, which sits on a remote inlet near Bristol Bay.
For thousands of years, the area has been a hub for the Yup’ik people. Today, more than 50 percent of the roughly 2,000 residents are Alaska Natives, who continue to survive on subsistence traditions passed down through the generations. Home addresses are not a must here because everyone picks up their mail at the post office.
And when school begins in the fall, finding Alaska Native students, who have graduation rates that hover around 50 percent statewide, can be a challenge.
INA BOUKER, teacher: Sometimes, families go moose hunting in the fall, right when school starts. And families will take their kids and go to moose camp for a week, and so they will miss a whole week of school.
APRIL BROWN: Alaska Native Ina Bouker has been a teacher in Dillingham’s schools for more than 30 years, and she’s well aware of the challenges and the legacy of mistrust that exists around education here.
Bouker was raised in the nearby village of Manokotak, at a time when American Indians and Alaska Natives were still being educated by mostly white teachers and told to shed their cultural identities.
