Friday, April 29, 2016

UNFORGIVING - The Long Life of Debt, Nebraska

"For Nebraska's Poor, Get Sick and Get Sued" by Paul Kiel, ProPublica 4/28/2016

A Greed File

Hay...  You Commie Pinkos, you don't understand, poor people are just lazy and want to be on the public dole.  (satire off)

Cheap court fees and looser rules make suing over medical debts as small as $60 easy.  Every year Nebraska collection agencies file lawsuits by the tens of thousands.

This story was co-published with The Daily Beast.

Two years ago, the president of Credit Management Services, a collection agency in Grand Island, Nebraska, presented a struggling local family with the keys to a used 2007 Mercury Grand Marquis.  To commemorate the donation, the company held a ceremony that concluded outside its offices, where the couple and their two young girls could try out their new car.

The family's story was dire; their eight-year-old daughter's failing kidney had led to multiple surgeries and a deluge of medical bills, according to an article in the local newspaper.

But CMS played another role in the family's life, one the article didn't mention.  The company had previously sued the couple eight times over unpaid medical bills and garnished both of their wages.  As recently as two weeks earlier, CMS had seized $156, a quarter of the girl's father's paycheck.

Shortly after the ceremony, CMS released the family from further garnishment, court records show.  But just four months later, the company filed a motion to start up again.  The couple, who did not respond to attempts by ProPublica to contact them, has since declared bankruptcy.

In almost any other state, such a barrage of lawsuits against a family in desperate financial straits would be remarkable.  Not in Nebraska.  There, debt collectors frequently sue over medical debts as small as $60 and a simple missed doctor's bill can quickly land you in court.

Filing suit is one of the most aggressive ways to collect debt, but no one tracks how frequently it happens or to whom.  An examination of Nebraska's courts, however, shows that where debtors live can have an enormous, and unexpected, impact on the quantity and types of lawsuits.

Nebraska's flood of suits isn't merely a reflection of residents' inability to pay their bills.  About 79,000 debt collection lawsuits were filed in Nebraska courts in 2013 alone, according to a ProPublica analysis.  In New Mexico, a state with a population, like Nebraska's, of around two million, about 30,000 suits were filed.  Yet by virtually any measure, households in Nebraska are significantly better off than those in New Mexico: Income is higher.  Poverty is lower.  And fewer families fall behind on their bills.

The reason for the difference is simple.  Suing someone in Nebraska is cheaper and easier.

The cost to file a lawsuit in Nebraska is $45.  In New Mexico, where suits are filed at about one-third the rate as in Nebraska, the fee for smaller debts starts at $77.

Nebraska lawmakers, of course, didn't set out to turn the Cornhusker State into the Lawsuit State.  Instead, it appears no one understood the consequences of having cheap court fees: Suing became an irresistible bargain for debt collectors.  It's a deal collectors have fought to keep, opposing even the slightest increase.

For debtors, unaffordable debts turn into unaffordable garnishments, destroying already tight budgets and sending them into a loop.  “It's just been a vicious cycle,” said Tanya Glasgow, a single mother in Lincoln, Nebraska who's been sued several times.  “It's been horrible.”

“I resent the stereotype that these are not hard-working people” said Katherine Owen, managing attorney in Legal Aid of Nebraska's Omaha office.  “Truly the majority of them simply cannot afford it.  That's it.”

Lawsuits over medical debts are, of course, filed in other states, usually by hospitals.  What makes Nebraska unusual is that almost all the suits are brought by locally owned collection agencies that pursue debts on behalf of medical providers.  Although ProPublica found collection agencies filing suits in large numbers in other states, particularly Indiana and Washington, none could match the sheer volume in Nebraska.

It's a difference that came as a surprise to researchers, consumer advocates, and collection professionals both in and outside of Nebraska.

“There's very little information, period” on the number of collection lawsuits in different states, said April Kuehnhoff, an attorney with the National Consumer Law Center.  Policymakers in Nebraska and other states should pay attention, she said.  “Being sued on a debt has very serious negative consequences for consumers.”

In a statement, the Nebraska Collectors Association said collection agencies file suits as “a last resort,” after attempts by the original provider and the agency to resolve the debt have failed.  “Cooperatively working with the consumer is always the preferred approach to the collection process,” it said.

Credit Management Services' offices are housed in a squat, brick building that's conveniently located just a block away from the county courthouse in Grand Island, a city of about 51,000 in central Nebraska.

Local businessman Michael Morledge has owned the company since 1995.  His son serves as president and his daughter as vice president of customer relations.  CMS, with about 200 employees, boasts of having “the industry's highest recovery rates” on its website and counts two-thirds of Nebraska hospitals among its clients.  In addition to other medical clients like doctor's offices and clinics, CMS also handles non-medical debts such as overdrawn bank accounts, utility bills and payday loans.

Like other collection agencies in the state, CMS employs collectors to persuade debtors to make voluntary payments.  And like those other agencies, CMS routinely sues those who don't.  But it's here that CMS sets itself apart.

In 2013, CMS filed almost 30,000 lawsuits in Nebraska, more than the rest of the collection agencies in Nebraska combined.  That would be a staggering number of suits in any state.  In New Jersey, with a population nearly five times larger, only one company, the nation's largest debt buyer, filed more than 30,000 lawsuits that year.

To file those suits – about 120 per working day – CMS has its own staff of six attorneys.  The complaints are prepped by support staff and then presented to the attorneys for review, CMS's general counsel Tessa Hermanson said in a 2012 deposition from a class action lawsuit against the company.

Debtors aren't sued unless “the individual has a means to pay,” she said.  But when pressed about how CMS determines this, Hermanson, who supervises the company's lawyers, said she didn't know if it was done by “one person or a department.”

A review of CMS's lawsuits shows the company is routinely aggressive even when it's obvious the debtor is poor.  In one case, CMS emptied a debtor's bank account 11 times over the course of two years, even though in all but three instances the debtor had under $100.  One garnishment netted the company $6.50.

Competition for clients can encourage this sort of approach, said Judge Craig McDermott, former counsel at a CMS rival and current presiding judge of the Douglas County Court in Omaha.  Companies may sue even when it's apparent the debtor can't pay just to prove to the original creditor that they are making an effort:  “Otherwise they'll go to another agency down the street,” he told ProPublica in a 2014 interview.

CMS's frequent use of the courts has brought millions back to the company, which retains a percentage of what it collects, and its clients.  From 2008 through 2014, CMS seized at least $88 million from Nebraskans' wages and bank accounts, according to court data analyzed by ProPublica.

In a brief response to a list of questions from ProPublica, CMS wrote that it “plays an active and important role in assisting creditors in Nebraska with recovering money owed for goods and services” and that it “strives to comply with all applicable laws and regulations” and only files suit after other collection attempts fail.  The company declined to discuss any individual debtor case.

Earlier this year, state Sen. Adam Morfeld introduced a bill in the Nebraska legislature that seemed too benign for anyone to oppose:  It proposed raising the fee for filing a lawsuit by $1.  The extra money would go to civil legal aid organizations to provide more services to low-income residents.

But, to Morfeld's surprise, his bill quickly encountered stiff resistance.  Tim Keigher, CMS's lobbyist in the state capital, made it clear the company would fight the bill every step of the way, said Morfeld, a Democrat.  Keigher did not respond to requests for comment.

At a February judicial committee hearing, CMS's Hermanson appeared on behalf of the Nebraska Collectors Association to oppose the bill.  Raising the cost of filing suit in county courts from $45 to $46, she said, would create a “burden” on the businesses that hire collection agencies.  Collection agencies ask, “is it worth it to pay X amount to recover a small, you know, medical debt of $200?” she said.  A higher filing fee may cause them to decide “it's just not worth it,” she said.

The gathered senators were skeptical.  After Hermanson testified that collection agencies filed thousands of suits each month, one senator volunteered that maybe increasing the filing fee “would be better” if it meant fewer suits.

Sen. Matt Williams, a Republican and former president of the American Bankers Association, asked Hermanson, “So your testimony is that a one dollar increase in this fee that your client is going to pay, not you, would stop you from filing claims for $200, $300 medical bills?”

Hermanson, perhaps betraying an industry fear that opening the door to a dollar would ease the way for further hikes, said “There's always a need for increased funds and at some point it becomes less practical to continue to pay for those fees.”

“So you would weigh that one dollar against the ability to provide legal services for the poor people of Nebraska?” asked Williams.

“No, certainly not,” she replied.

“But that's what your testimony is.”

“My testimony is that the legal services fund, we're not disputing that it's needed,” said Hermanson, “just that maybe there's a better way to do it than increasing the court cost.”

Ultimately, CMS's efforts to halt the bill were unsuccessful.  On a 40–0 vote, the bill passed the legislature earlier this month and was quickly signed by the governor.  But Morfeld said, “It's really been eye-opening.  I think we have a broader problem.”

ProPublica's review of court data across several states suggests a relationship between court costs and the number of collection suits filed.

In 2013, Cook County, Illinois, which contains Chicago and has a population of over 5 million, had about the same number of collection suits as Nebraska with its population of fewer than 2 million.  That year, it cost $172 in Cook County to file suit for the sort of small amounts that predominate in Nebraska, where the fee was $45.

Not surprisingly, lawsuits over debts of a few hundred dollars are extremely rare in Cook County.  The typical collection suit in 2013 sought around $3,000, according to ProPublica's analysis.

In fact, suits for a few hundred dollars are generally rare.  Debt buyers, for instance, usually don't file suits for debts smaller than $1,000 due to the costs involved in suing, said Jan Stieger, executive director of the industry's trade group, DBA International.  Debt buyers, which primarily purchase defaulted credit card accounts, file more collection suits nationwide than any other type of company.

Some states, like Missouri and New Jersey, have filing fees comparable to Nebraska's.  But even there the rate of suits, when adjusted for the population, was still substantially lower.

Kuehnoff of the National Consumer Law Center said the volume of suits in a state is also a reflection of how easy it is to sue.  Nebraska has a number of collector-friendly policies, such as looser standards for serving debtors with a lawsuit.  Tougher standards – such as requiring collectors to serve defendants personally with a suit or provide more documentation of debts – can decrease the number of suits and make the process fairer to consumers, she said.

In February, a federal judge deemed CMS's practices unfair, siding with the plaintiffs in a class action lawsuit against the company.  CMS, ruled U.S. District Judge Joseph Bataillon, had deceived consumers with its collection suits by wrongly claiming interest and attorney fees — charges that CMS adds to debts and keeps for itself.  CMS agreed to settle the class action earlier this month, but the settlement's details remain under seal.

In his ruling, Bataillon wrote that the extra charges were just one part of a process that can be bewildering for defendants, who are very rarely represented by an attorney.

“Without any special knowledge of the law, a layperson could not figure out, on the face of the collection complaint, what the claim was for or to whom he or she was indebted,” he wrote.

To get a sense of who is affected by collection suits in Nebraska, ProPublica reviewed 100 randomly selected cases where a collection agency had garnished the debtor's pay or bank account.  Most of the debtors were lower-income, more than half earned below a rate of $30,000 a year.

“I have to work two jobs just to try to make ends meet,” said Robin Kerr, 55, of Norfolk, a city of about 24,000 in northeastern Nebraska.  Kerr has been sued four times, three times by CMS, and in each case, the agency sought to seize a chunk of her wages at Burger King.

Most of the suits we reviewed sought less than $700, and 40 sought less than $500.  Four of the suits, all filed by CMS, were for under $100.  In one case, a $66 chiropractic bill transformed into a $275 court judgment after court costs, attorney fees, and interest were tacked on.

The vast majority of suits were over unpaid medical bills, the providers ranged from rural hospitals to the largest in the state, from specialists to family doctors.  Debts from multiple providers were often combined in the same suit, even bundled with non-medical bills.

The suits sometimes came quickly, in some cases only three months after the provider sent the patient a bill.  That speed is in contrast to recent national reforms meant to protect consumers from being penalized for medical billing errors.  Last year, the three main credit reporting agencies announced a new 180-day waiting period from the time a medical account is created until it can appear on a patient's credit report as in collections.

But in Nebraska, said legal aid attorneys, once an account is sent to a collection agency, the patient has little hope of sorting out a billing issue.  Instead, collection agencies often give them the option of paying in full or facing a lawsuit, they said.

Tanya Glasgow, 39, has had health problems for years, at one point requiring surgery to remove her gall bladder and recently suffering from epileptic seizures.  Making matters worse, she's gone for stretches without health insurance, which she's struggled to afford.  She has two teenagers at home and a third child in college and works the graveyard shift at a nursing home for $18.50 an hour.

Glasgow's tried various strategies for dealing with her medical debt, which she estimates at about $20,000, but any plan can suddenly fall apart.  “I'm paying on three of them and then the fourth one sues me,” she said.  She's been sued five times, four by CMS.

The worst blow came last fall.  CMS had filed its third suit, a bundle of radiology and emergency room bills, for over $1,000.  A week after obtaining a judgment, CMS moved to garnish her pay.  But the same day, CMS also filed to seize funds from her bank account.

The action froze Glasgow's account and secured the entirety of what she owed under the judgment, $1,315.  But because it took several weeks for CMS to actually receive that money through the court, CMS allowed the garnishment of her wages to continue.

Glasgow said she struggled for two weeks to put food on the table.  But when her paycheck arrived, it was short $226, because CMS had taken money she no longer owed.  CMS garnished her next paycheck, too, before the case was finally closed.

Glasgow said she had to call both the court and CMS to get her money returned, and then CMS took more than a month to do so.

The experience convinced Glasgow it was time to pursue something she'd put off considering, bankruptcy.

It's a step that wouldn't be necessary if she lived in a state where lawsuits over medical debt weren't so common, she said.

“The amount of stress this has brought into my life has been almost unbearable.”

SECURITY - eMail Domains

Just have to comment on paying attention to the domains you receive eMail from.

Got an eMail reminding me 'to confirm your account' on a site I never heard of.

The domain was ""!

Ya, like that's a safe site, .....NOT.

You need to pay close attention to eMail domains when the eMail looks suspicious or from a site you never heard of.

Suspicious eMail may even claim to be from a site you do deal with.  I and an eMail that claimed to be from AARP but the text didn't look right, it was from a domain ending in ".top"

If you get eMail that does look like it's from a site you deal with but has a link to update you account info, DO NOT use the link in the eMail.  If you deal with the site, you should have it bookmarked in your browser, use that to access the site.  Also, many sites will have a Support contact, you should copy the eMail and Headers, and paste that into their message system so they know someone is trying to spoof them.

All suspicious eMail domains should be added to your SPAM filter.  In my case, my eMail provider has a very good system for that.  Then your eMail client should also have a way to filter eMail domains.

Thursday, April 28, 2016

ELECTION 2016 - Trump's Male Chauvinism on Display


NOTE: This is from the online edition of the paper, so no link to article.

Trump's remark about Clinton may signal direction of campaign

Donald Trump's accusation that Hillary Clinton is playing the “woman's card” and would be a failed candidate if she were a man touched off a contentious debate about gender politics and sexism that seems likely to define the presidential election as much as any issue.

While celebrating sweeping victories in five Republican primaries Tuesday night, Trump mocked the qualifications of the Democratic front-runner, saying she would be a bad President who lacks “strength.”  The remarks seemed a preview of a general-election strategy to use Clinton's potential to be the first female President against her.

“Frankly, if Hillary Clinton were a man, I don't think she'd get 5 percent of the vote.  The only thing she's got going is the woman's card,” Trump said in a news conference at Trump Tower.  “And the beautiful thing is, women don't like her.”  That was a significant expansion of Trump's by-now familiar claims that Clinton is unqualified— and one that made New Jersey Gov. Chris Christie's wife, standing behind Trump before the TV cameras, appear to grimace.

It also crystallized the question of how the nation will reckon with its first presidential election between a man and a woman.  What was once subtext— latent sexism in American life, and the question of what is and is not off-limits when contemplating a woman as commander in chief— is now a full part of the political conversation.

“What's shaping up is a battle for the ages,” said David Brock, a Clinton confidant who heads the pro-Clinton super PAC 'Correct the Record.'  “You've got one candidate who is vying to be the first woman President and is embracing the historic nature of her own candidacy, and on the other hand, you've got Trump, who represents a kind of retrograde social structure of the past” that is blatantly sexist, Brock said.  “There's no better foil for Hillary.”

Clinton allies and the campaign itself have been startled by what some call Trump's unsubtle line of attack, which stands in dramatic contrast with the more subtle presence of race in President Barack Obama's historic election eight years ago.

But most Clinton allies consider the newly escalated gender wars of 2016 a helpful point of comparison that she can use to rally women's support and show how each candidate might behave as President.

“They might make flashy headlines, but Trump's comments aren't a joke,” the campaign wrote Wednesday.  “Hillary can handle these attacks.  Millions of women shouldn't have to.”  In television interviews Wednesday, Trump dismissed critics who called the election-night remarks sexist.

“It's not sexist.  It's true.  It's just a very, very true statement.  If she were a man, she'd get 5 percent.  She's a bad candidate.  She's a flawed candidate,” Trump said Wednesday on ABC's “Good Morning America.”  “She's not going to do very well in the election, and I look forward to showing that.”

He also made fun both of Clinton's delivery on the stump and of the social niceties — or political taboo — that says you're not supposed to make fun of that.  “I haven't quite recovered — it's early in the morning— from her shouting that message,” he said on MSNBC's “Morning Joe.”  “And I know a lot of people would say you can't say that about a woman because, of course, a woman doesn't shout, but the way she shouted that message was not,” and with that Trump broke off with a dismissive, “eww.”

“I guess I'll have to get used to a lot of that over the next four or five months,” he added, while also saying that he expects to do well with female voters.

Some responses on Clinton's behalf were outraged and some mocking.  And some sought to raise money from what Clinton allies see as an unappealing glimpse into both Trump as a Republican standard-bearer and a slice of the GOP electorate that is receptive to language and viewpoints other politicians have been schooled to avoid.  “Women still face too many barriers— a President shouldn't be part of the problem.  Comments like Trump's set us back,” Clinton said in one of a blizzard of Twitter messages about the remarks Wednesday.  The real estate mogul has won female voters on average by 10 percentage points over his rivals in primary contests this year.  On Tuesday, he won by more than 20 points among female voters in Connecticut, Maryland, and Pennsylvania.  But Trump's successes in winning Republican women has not translated to popularity with women or men in the broader electorate, where he continues to be deeply unpopular.

A USA Today/Suffolk University poll released this week found 66 percent of likely women voters nationwide have an unfavorable view of Trump, compared with 48 percent who have a negative opinion of Clinton.  Among men the two are closer — 57 percent see Trump negatively while 61 percent say the same of Clinton.

“He continues to paint women with a broad, reductive brush, which may be a great strategy in appealing to his very particular audience of primary voters who have found his offensive tone endearing,” said Stephanie Schriock, who heads Emily's List, a group that promotes and funds Democratic women running for office.  “But in a general election, it is really difficult to shift from the place where he is to being presidential.”

Women are far more likely to have intensely negative views of Trump.  A Washington Post-ABC News poll this month found 64 percent of women feeling “strongly unfavorable” toward Trump, compared with 41 percent of men.

Trump has consistently trailed Clinton, as well as Democratic candidate Bernie Sanders, in general-election matchups.  The USA Today/ Suffolk University poll found Clinton leading Trump by 11 percentage points, fueled by a 21-point lead among women.  Women have historically leaned more toward Democrats than men have, but Trump's deep unpopularity with women threatens to diminish his Republican support.

Clinton has built a 2016 campaign focused on issues of keen interest to female voters, including equal pay, health care, and paid family leave.  Her economic plan promises to “lift up participation in the workforce — especially for women.”

Monday, April 25, 2016

CHERNOBYL - 30yrs After

"Thirty years after Chernobyl disaster, families say children are getting sick" PBS NewsHour 4/24/2016

IVETTE FELICIANO (NewsHour):  The disaster forced tens of thousands of residents around Chernobyl to flee and never some back.

But many other people remained in a zone that was considered safe enough distance to stay.

In the village of Zalyshany, about 32 miles southwest of Chernobyl, 8-year-0ld Bogdan Vetrov suffers from an enlarged thyroid gland.

His mother, Viktoria, believes it is due to radiation found in their food, but she says her family’s options are, eat food that may be contaminated or starve.

VIKTORIA VETROVA:  We are aware of the dangers, but what can we do?  There is no other way to survive here.  Especially in this region we just cannot survive.

IVETTE FELICIANO:  Vetrov and his siblings are among 350,000 children living in areas where monitoring radiation in the soil ended four years ago.

Greenpeace, the European Union and the World Health Organization have found links between contaminated produce and milk and increased levels of thyroid cancer.

One EU study tracked 4,000 children for three years and found more than 80 percent of them had cardiovascular issues.

Doctors who perform annual checks on children here have seen that first-hand.

YURY BANDAZHEVSKY, PEDIATRICIAN:  There are very serious pathological processes, which definitely will unfortunately have negative consequences on the development of these children.

OPINION - Shields and Brooks 4/22/2016

"Shields and Brooks on Va. voting rights for felons, toning down the Trump campaign" PBS NewsHour 4/22/2016


SUMMARY:  Syndicated columnist Mark Shields and New York Times columnist David Brooks join Judy Woodruff to discuss the week in politics, including Virginia Gov. Terry McAuliffe's move to reinstate voting rights to former felons, whether Donald Trump has been putting on an act as a presidential candidate and whether Sen. Bernie Sanders will stay in the Democratic race.

PHRASE OF THE DAY:  "Criminal Menopause"

ALARMING RISE - National Suicide Rate

"What’s causing a rising rate of suicide?" PBS NewsHour 4/22/2016


SUMMARY:  The national suicide rate has hit its highest point since 1986, according to statistics released by the Centers for Disease Control.  Among middle-aged Americans, the gender gap narrowed between men and women who took their own lives.  For 10 to 14-year-old girls, the rate has tripled in the past 15 years.  Hari Sreenivasan learns more from Katherine Hempstead of the Robert Wood Johnson Foundation.

JUDY WOODRUFF (NewsHour):  The government released new statistics about suicide in the U.S., and the results were sobering and stunning.  The nation’s suicide rate is at its highest point since 1986.  Nearly 43,000 people ended their own lives in 2014, which is the most recent year with full data.

Hari Sreenivasan has more on this story from our New York studios.

HARI SREENIVASAN (NewsHour):  The rise in rates were particularly alarming among some age groups.  While the numbers are still smaller among children, the suicide rate was up sharply among 10-to-14-year-old girls, tripling in the past 15 years.

It also rose steeply among middle-aged Americans, 63 percent higher for middle-aged women, 43 percent higher for middle-aged men.

For some perspective on these trends and some of the potential reasons behind it, I’m joined by Katherine Hempstead, who studies this for the Robert Wood Johnson Foundation.

For the record, the foundation is a funder of the NewsHour.

So, which of these sets of numbers, and we just went over a couple of them, but stood out to you when you saw this?

KATHERINE HEMPSTEAD, Robert Wood Johnson Foundation:  Well, I think there has been concern about the middle-aged group for a while now.

And people have been noticing increased rates for both males and females.  And with these latest results, we see really, really large increases for women in particular and a closing of that gender gap, as the female rates starts to be closer to the male rate.

HARI SREENIVASAN:  That women try more, but men succeed more?  Is that one of the…


KATHERINE HEMPSTEAD:  Well, I think that’s something that is true.

There is much more of a nonfatal to fatal ratio for females.  There are many more attempted self-harms that don’t result in fatal incidents.  But now we see — with this new trend, we see the rates getting closer, and we also see a change in the method, so that we see this increasing adoption of suffocation or hanging as a suicide method by both males and females, and that is a highly lethal method.

THE VOTE - Felons in Virginia

"Felons who've paid their debt deserve to vote, says Virginia Gov. McAuliffe" PBS NewsHour 4/22/2016

Amen, a man of principle.  Rehabilitation does NOT work without some reward.


SUMMARY:  Virginia Gov. Terry McAuliffe signed a sweeping order Friday to restore voting rights to more than 200,000 convicted felons within the state.  McAuliffe described the action as an effort to reverse decades of voter repression, but state Republicans accused the governor of abusing his powers to help Hillary Clinton win a valuable swing state.  McAuliffe joins Judy Woodruff for more.

JUDY WOODRUFF (NewsHour):  Virginia Gov. Terry McAuliffe signed a sweeping order today to restore voting rights to more than 200,000 convicted felons after their release from prison.

Republicans in the commonwealth quickly accused the governor of abusing his executive power to help Democrat Hillary Clinton win a battleground state.

Governor McAuliffe joins me now from Richmond.

Governor, welcome.

Why the decision to overturn something that's been in place in your state since the Civil War?

GOV. TERRY MCAULIFFE (D), Virginia:  Well, let's be honest.  We have had a bad history here on voting rights in Virginia.  1901, 1902, they put in the poll tax.  They put in literacy tests.  And they had a horrible disenfranchisement for felons.

So, what I did today was to erase 114, 115 years of a really, really repressive tactic used to deprive people their right to vote.

JUDY WOODRUFF:  You included convicted felons who were accused of violent crimes, murder, rape.  You didn't make any exceptions.  Why not?

GOV. TERRY MCAULIFFE:  Nope.  Why should I?

Once you have served your time, once you have paid your debt to society, the judge, jury have determined what your sentence would be, once you complete that, why should you not be back in?

When these people, even if they have committed heinous crimes, but once they have finished serving their sentence, they go back to their communities, they get jobs, they have family members.  You want them, Judy — I want everybody back getting a job.  I want them paying taxes.  I want them feeling good about themselves.

You have paid your debt to society.

TALKING TRADE - Globalization and U.S. Voters

"Why trade and globalization concerns are resonating with voters at home" PBS NewsHour 4/21/2016


SUMMARY:  The issue of trade, and whether our deals are helping or hurting American workers, is resonating with many prospective voters this election season.  For a closer look at how U.S. trade policy is playing out in the presidential race, Hari Sreenivasan talks to Thea Lee of the AFL-CIO and Matthew Slaughter of Dartmouth University.

HARI SREENIVASAN (NewsHour):  As the candidates campaign in Pennsylvania, Indiana and elsewhere, one of the issues resonating strongly this year is trade, and whether it's helping or hurting the American economy and its workers.

It's been a long time since trade policy played out this way in a campaign.

This week, our colleagues at NPR have been looking more closely at these issues as part of an ongoing series of reports we are jointly doing about issues on the campaign trail.

For more on how trade is playing out in the race for the White House, I am joined by Thea Lee.  She's deputy chief of staff at the AFL-CIO and an international economist.  And Matthew Slaughter, dean of the Tuck School at Dartmouth College.  From 2005 to 2007, he served on the Council of Economic Advisers to President George W. Bush.

Thea Lee, so, why is this resonating so much right now?

THEA LEE, Deputy Chief of Staff, AFL-CIO:  You know, I think we have hit a breaking point.

American workers have really not benefited from a lot of changes in the economy over the last couple of decades.  We have seen that real wages are essentially flat for more than four decades.  And so we have had a period of tremendous economic growth and technological innovation and globalization, and yet American workers are working harder than ever.

They're more educated than ever.  More people in each family are working, and they're not really making ends meet.  And trade has been a key contributing factor.  It's not the only factor.  It may not even be the largest factor.  But it is a key policy choice that we have made.

And when we have a decision about a big trade agreement like the Trans-Pacific Partnership, this focuses the attention.  And I think we have seen candidates really take advantage of that attention on trade right now, and workers are responding and it's resonating.

HARI SREENIVASAN:  Matthew Slaughter, any other reasons that this is catching on right now?

MATTHEW SLAUGHTER, Dartmouth College:  I think Thea is right that the American workers, a lot of them sitting around their kitchen tables thinking about voting, they have not performed as well as they had in the past.

They're concerned about their prospects.  They're concerned about their children.  And yet I think what's important to keep in mind is trade in particular, and globalization more generally, they have generated large gains for America overall over the many decades.

And with the right kind of policies going forward, more global engagement can help more American families in the future as well.

VIDEO TRIBUTE - To George Harrison 2004

2004 Rock and Roll Hall of Fame, Prince tribute to George Harrison - "While My Guitar Gently Weeps"


"This online pioneer sees a future where everything is internet" PBS NewsHour 4/21/2016


SUMMARY:  In the 30 years since Steve Case co-founded AOL, the global tech landscape has seen immense growth and change.  What new developments wait in the near future, and what does the rapidly expanding online world mean for human life? Case explores those issues in his new book, “The Third Wave.” Case joins Judy Woodruff to discuss his vision of the future.

JUDY WOODRUFF (NewsHour):  Back in 1985, when Steve Case co-founded America Online, only 3 percent of Americans were actually online.  Fast-forward some 30 years, and we can see the global change brought about by the Internet and an ever-growing array of devices and social media.

So, what is next?

Well, we get a glimpse from Steve Case himself.  He is the author of a new book, “The Third Wave: An Entrepreneur’s Vision of the Future.”

Steve Case, it is good to see you.

STEVE CASE, Author, “The Third Wave”:  It’s good to see you again.

JUDY WOODRUFF:  So you borrowed that term the third wave from the futurist Alvin Toffler.


When I was in college in the 1980, I read Toffler “Third Wave.” It completely mesmerized me inspired me.  I spent the last almost four decades pursuing some of the ideas he talked about.

So, when I was writing a book, I wanted to pay respect to him.  I open the book with talking about my experience reading Toffler.  And I hope others will similarly be inspired by my book, and because the future once again is going to change, and the path forward is going to be different than what we saw in the last two waves.  And that’s what I was trying to lay out in this book.

JUDY WOODRUFF:  So, in a thumbnail, first wave was the creation of the Internet, which you were involved in.  Second wave was building on that, you describe, social media devices and so forth.

What is the next wave?

STEVE CASE:  It’s really integrating the Internet seamlessly throughout our lives.

And there is a lot of things that haven’t changed that much in the first wave or the second wave.  How we learn, our kids learn is about the same.  How we stay healthy is about the same.  How we manage energy is about the same.  Even how we think about food is about the same.

And work itself is starting to change in the third wave because of the freelance economy, what some call the gig economy.  So, I think it’s important for everybody, not just businesspeople or technologists, to understand what is happening next.  And that is what I try to lay out in this book with sort of a — a little bit of a road map forward and a little bit of a playbook in terms of how you can think about orchestrating your career and your life, and how you think about maybe your kids and even your grandkids.  What world are they going to be inheriting?


"How Harriet Tubman kicked Andrew Jackson off the front of your $20 bill?" PBS NewsHour 4/20/2016


SUMMARY:  For the first time in over 100 years, famous American women will appear on U.S. paper currency.  Harriet Tubman will replace Andrew Jackson on the front of the $20 bill, a group of suffragists will be added to the $10 bill and the $5 bill will show Eleanor Roosevelt and singer Marian Anderson at the Lincoln Memorial.  Treasury Secretary Jack Lew joins Judy Woodruff to discuss the changes.

JUDY WOODRUFF (NewsHour):  It has been a much anticipated decision, but the United States' currency is in for the first changes in a long time, giving new prominence to civil rights and women's history in this country.

The familiar greenbacks haven't seen a new face in almost 90 years.  And when the Treasury Department announced last year a woman might grace a bill for the first time in history, there was jubilation from American women, but a backlash from Alexander Hamilton fans, who were upset over anyone replacing him on the $10 bill.

The first secretary of the treasury, Hamilton has become a darling of popular culture with the runaway success of the Broadway musical named after him.  There was plenty of feedback and even some indignation at the suggestion Hamilton might be replaced.

Today, after much speculation, Treasury Secretary Jack Lew announced it's the seventh President of the United States, Andrew Jackson, who loses his spot on the front of the $20 bill.  He will be replaced by Harriet Tubman, the Civil War anti-slavery activist and a leader of the Underground Railroad.

Hamilton stays put on the $10 bill, but the reverse side will now include leaders of the women's suffrage movement, including Susan B. Anthony, and another abolitionist, Sojourner Truth.

The $5 bill also gets an update to include civil rights leaders such Marian Anderson, Eleanor Roosevelt, and Martin Luther King Jr.

I caught up with Treasury Secretary Lew earlier today.

Secretary Jack Lew, thank you for joining us.

JACK LEW, Secretary of the Treasury:  Great to be with you, Judy.

JUDY WOODRUFF:  So, big decision, the first time a woman is going on the face of a piece of U.S. currency that's in wide circulation.

Why Harriet Tubman?

JACK LEW:  You know, when we started the public discussion of this almost a year ago, I said it's been almost 100 years since we have had a woman on our currency, and that had to change, and it had to change as soon as possible.

We went through a process of listening.  And I kind of did it the old-fashioned way.  We actually listened.  Heard from well over a million people in one way or another, responses through handwritten notes and e-mails and tweets and retweets.

And the amount of support and interest in Harriet Tubman was quite impressive.  It showed that the story of Harriet Tubman means a lot to people of all ages in this country, and it speaks to something very important about American democracy.

Here, a woman born a slave, illiterate her whole life, can, after spending countless trips going back and forth freeing people on an individual basis, worked for the Army to help — as a spy, help them find their way into battle in the Civil War, and then be a founder of the women's suffrage movement, how that can change our country.  And I think that's — it's a tremendous American story.

PULITZER PRIZE - Public Service Prize for Associated Press

"How the AP uncovered secret slavery behind the seafood in your supermarket" PBS NewsHour 4/20/2016


SUMMARY:  An 18-month investigation into the use of slave labor in southeast Asia to bring seafood to American restaurants and supermarkets earned the Associated Press a Pulitzer Prize for Public Service.  Since the report was made public, more than 2,000 slaves have been freed.  For more on the daring expose, Hari Sreenivasan talks to Martha Mendoza of the Associated Press.

HARI SREENIVASAN (NewsHour):  Now a startling expose about slave labor in the world of seafood.

This week, we’re looking at some of the Pulitzer Prize winners.  And the Associated Press’ 18-month-long investigation won the prize for public service.  It tracked the widespread use of slave labor in Southeast Asia and how it’s part in a supply chain bringing seafood to American restaurants and supermarkets.

Fishermen were beaten and caged, and reporters even hid in the back of trucks for days to pursue the story.  Since then, more than 2,000 slaves have been freed.

Martha Mendoza was part of that reporting team, and joins me now.

Martha, what was the catalyst for the investigation in the first place?  Unfortunately, we have heard of slave-like conditions in different parts of the world before.  What made you want to follow this?

MARTHA MENDOZA, Associated Press:  Well, Slavery at sea wasn’t a secret, but the stories that were being told came from rescued slaves.

And, therefore, there was no traction because the response was, these guys are safe.  There is not really a problem anymore.  So, we set out to do what some people warned us was going to be impossible.  We wanted to find captive slaves, and then we wanted to track their catch with detailed accuracy all the way back to the dinner table to get people who were at the other end of this supply chain engaged.

HARI SREENIVASAN:  So, how do you find the captive slaves in the first place?

MARTHA MENDOZA:  My colleagues spoke at length and for many months with people who had escaped, as well as human rights activists who worked with people who had escaped.

And they had some miss, going to places where this wasn’t happening or false leads.  But when they heard about this island in Indonesia called Benjina, they had a pretty good idea there might be labor abuse going on there.  And it was a plane trip to a boat ride to a second boat ride to an island that can only be reached at certain times of the year.

And that’s where my colleagues did, indeed, find a slave island.

U.S. SUPREME COURT - The Chemical Sobriety Tests

"Can police penalize drivers who refuse sobriety tests?" PBS NewsHour 4/20/2016


SUMMARY:  At least a dozen states have made it a crime for suspected drunk drivers to refuse a chemical sobriety test.  But some opponents say these laws violate the Fourth Amendment, and are taking their complaints to the high court.  The Supreme Court considered three related cases from North Dakota and Minnesota on Wednesday.  Hari Sreenivasan talks to Marcia Coyle of The National Law Journal for more.

HARI SREENIVASAN (NewsHour):  First, a dispute over some laws in states to curb drunk driving.

Over the years, at least a dozen states have made it a crime for suspected drunk drivers to refuse to take alcohol tests.  But does a police officer have to get a search warrant before performing such a test?  And do these laws violate the Fourth Amendment?

The Supreme Court grappled with these questions today, as it considered three cases challenging laws of this sort in North Dakota and Minnesota.

Marcia Coyle of “The National Law Journal” was in the courtroom, as always, and she joins me now.

So, what’s the hassle in getting a warrant before you do one of these tests?

MARCIA COYLE, The National Law Journal:  Well, if you are asking the states of North Dakota and Minnesota, who are involved in this, they say that, one, you don’t have magistrates available 24/7 to answer a police officer’s call for a warrant.

It can take a while.  There are concerns about, you know, evidence being lost.  But, basically, the states are saying here, look, states have a bargain with drivers.  Driving is not a right.  It’s a privilege.  And when you get your license, you’re agreeing — you’re impliedly consenting to certain requirements.

And the states feel these states — there are 12 of them now and the federal government — impose criminal penalties if you refuse to take these tests.

HARI SREENIVASAN:  So, if you — is there a distinction between the type of test that can be taken, a Breathalyzer that we’re familiar with, a field sobriety test if you’re just walking a line, vs. a blood test?

MARCIA COYLE:  During the arguments today, that really did come out in some of the justices’ questioning, Justice Breyer, for example.

By the way, Hari, this was a great example of how they play devil’s advocate with each side.  Justice Breyer, for example, said to the lawyer who was representing the three men challenging these laws, you know, what’s the big deal about a breath test, for example?  You blow into a straw that’s connected to a little machine that’s about the size of a cell phone.  You’re giving up carbon dioxide that’s going to go into the environment anyway.  It’s not all that invasive, not all that intrusive.

On the other hand, then, when the states’ lawyers came up, he said — would say to them, well, look, how long does it take to get a search warrant for these breath tests?  Wyoming says it takes five minutes.  Montana says it takes 15 minutes.  How long does it take in North Dakota?

And if they’re transporting these people after they have been arrested to a police station, why can’t the police officer just make the call on the way, maybe on a cell phone that has a big 'W' for warrant on it, press the button?

It was — the argument was a lot of fun in some respects.  So, at the very end, though, Justice Kennedy asked the Obama administration’s lawyer, who was supporting the states, can we distinguish between the breath test and the blood alcohol test?

AFGHANISTAN - A Taliban Question

"Is the Taliban growing stronger?" PBS NewsHour 4/19/2016


SUMMARY:  A Tuesday morning suicide attack in Kabul killed 28 people and wounded hundreds more, part of an ongoing surge of Taliban-driven violence in Afghanistan.  Judy Woodruff talks to Seth Jones of the RAND Corporation, former advisor to U.S. special forces in the region, for more on the bombing and what it says about the country's stability and security after 15 years of American involvement.

JUDY WOODRUFF (NewsHour):  We return to our top story, the upsurge in Taliban-driven violence in Afghanistan, nearly 15 years into the American involvement there.

Smoke over the Kabul skyline signaled the capital was under attack.

AHMAD NAVID, Witness (through interpreter):  It was a big blast.  Dust covered all the area.  I wasn't able to see what was happening.  Later, I saw lot of damage.

JUDY WOODRUFF:  One insurgent blew up a truck bomb outside a security agency that protects top officials.  A second attacker ran into the compound and started shooting.

GEN. ABDUL RAHMAN RAHIMI, Kabul Police Chief (through interpreter):  After the car bomb exploded, a suicide bomber was trying to enter the building.  He came under fire from inside the building, as well as from police forces who were outside, who didn't give him the chance to enter.  He was killed.

JUDY WOODRUFF:  The attack caused extensive damage just a few hundred yards from the presidential palace.  Meanwhile, fighting continued in the northern part of the country, where government forces around Kunduz have battled this week to repel a Taliban assault.

Last year, the militants captured the city and held it for three days before Afghan forces backed by U.S. airstrikes drove them out.  But Afghanistan's chief executive, Abdullah Abdullah, said Kunduz and Kabul show the Taliban's latest spring offensive has failed.

ABDULLAH ABDULLAH, Chief Executive, Afghanistan (through interpreter):  They were defeated all over the country after they carried out their attacks and have suffered lots of causalities.  So, by carrying this suicide attack, they wanted to take revenge.

JUDY WOODRUFF:  Still, by most reckoning, the Taliban is at its strongest in years, likely a concern for President Obama, when he reversed course last fall, and announced the U.S. will keep 10,000 troops in Afghanistan through this year, drawing down to 5,500 in 2017.

TOURISM - Aegean Island of Lesbos

"A waypoint for refugees, Lesbos braces for hardship as tourism declines" PBS NewsHour 4/19/2016


SUMMARY:  The island of Lesbos is one of the Aegean's most idyllic locales, and long a destination for tourism in Greece.  But local residents and businesses are bracing for potential economic catastrophe, as tens of thousands of vacationers are staying away because of the island's new role as a landing zone for refugees.  Special correspondent Malcolm Brabant reports on efforts to reinvigorate tourism.

HELEN STEDMAN, British Bird Watcher:  I have seen a cormorant.  I have seen a Ruppell's warbler.  I have seen a sub-alpine warbler.

MALCOLM BRABANT (NewsHour):  Every year, spring in Lesbos lures millions of migrating birds and British pensioner Helen Stedman.  Unlike other tourists, troubled by images of suffering and misery, she and her keen bird-watching partner, Jeff Bailey, have remained faithful to an island they believe typifies unadulterated Greece.

HELEN STEDMAN:  I feel sad for the islanders.  The economy is suffering.  And we have noticed that restaurants that we have favored before have closed.  They're not there anymore.  They have gone bankrupt.

The people can't — the locals can't afford to pay wages.  And they're just not opening.  Tourism is their biggest income in this island.  And if we don't come and support them, then they're not going to survive,

MALCOLM BRABANT:  Seasonal worker Nikos Paspalatelis is helping his former boss prepare the hotel for the summer.  Married with two small children, Paspalatelis has worked here for almost 20 years, but he's been laid off this summer, which means his state insurance won't be paid, which means he won't be entitled to unemployment benefit in the winter, when there's no seasonal work.

NIKOS PASPALATELIS, Newly Unemployed:  I'm not going to say that we're angry, because angry is something you do if somebody make you very big damage to you.  But this is — I hope this will be only for one year, this damage.  Maybe if you ask me maybe in two or three years, if this situation continue, I would say, yes, I'm going to be hungry — angry — sorry.

MALCOLM BRABANT:  This hotel was on the front line.  The owners estimate more than 1,000 boats landed on the beach next to their taverna, most during the peak season.  German water sports instructor Wolfgang Punke has come to say farewell and remove his gear.

PULITZER PRIZE - Two for Washington Post

"Washington Post honored for deep dive into fatal police shootings" PBS NewsHour 4/19/2016

Pulitzer Prize Categories:  National Reporting, and General Nonfiction ("Black Flags: The Rise of ISIS” by Erin Patrick O'Connor/The Washington Post)


SUMMARY:  The Washington Post picked up two Pulitzer Prizes on Monday, including one for national reporting on police shootings of civilians.  According to an innovative new database compiled by the Post, 990 civilians were fatally shot by police last year.  For more on the groundbreaking report, Judy Woodruff talks to Wesley Lowery of The Washington Post.

JUDY WOODRUFF (NewsHour):  And speaking of awards, let's look at some investigative reporting honored by this year's Pulitzer Prizes.

The Washington Post won two Pulitzers yesterday, including one for national reporting for a series on police shootings of civilians.  There had been little national data about those kind of shootings.

The Post created its own database that included these findings:  990 people were fatally shot by police last year.  One in six officers had been involved in a prior shooting.  In three-quarters of the cases, police were under attack or defending someone who was.

Wesley Lowery was one of The Washington Post's lead reporters on this.  He's part of a team of more than 60.  And he joins me now.

Congratulations, Wesley Lowery.

WESLEY LOWERY, The Washington Post:  Thank you so much.

JUDY WOODRUFF:  Let's see.  How many years have you been reporting?

WESLEY LOWERY:  A few, but — a few, a handful.  So, I'm 25.  I have been at The Post for two years.

JUDY WOODRUFF:  And what was your reaction?

WESLEY LOWERY:  I was really excited.

This was a project that really was a newsroom-wide effort that involved a lot of different staffs, our investigative staff, our national desk, which I work for, our graphics and data development staffs as well.  It was just a really great team win.

JUDY WOODRUFF:  How did the idea for this come about?

WESLEY LOWERY:  So, this idea, this project was born in a lot of ways out of Ferguson, Missouri.

And I was one of our lead reporters on the ground in Missouri, as well as then in Baltimore, when there was the unrest there.  And in Ferguson, they were having this conversation where you had the police unions and the police chiefs saying at the time, this is a one-off anecdote.  We almost never shoot anybody.  Most officers never fire their guns.

And you had the civil rights groups and many of the activists and protesters saying, young black men are being executed in the streets every day.  This is an outrage.  We're being killed.

And so smart editors asked an obvious question, which is true.  We should know, right?  We should be able to provide some clarity to this debate.  And it turned out that we couldn't because no one was keeping track at the national level and also even at state levels.  No one knew exactly how many people were being killed by the police.

IMMIGRATION - At the U.S. Supreme Court

"Supreme Court weighs scope of Presidential power in immigration case" PBS NewsHour 4/18/2016

A simplified view:  This case is about weather the President's policy (deferral, NOT a ban) falls under that of an executive manager.  IMO unless there is SPECIFIC language in the immigration law banning deferrals, any President can make deferrals.   aka deferrals are NOT CHANGES to the law.


SUMMARY:  The Supreme Court heard arguments in a challenge to President Obama’s actions that would defer deportations of many undocumented immigrants.  Marcia Coyle of The National Law Journal joins Hari Sreenivasan to take a closer look at the case and the implications of a potentially split court.

HARI SREENIVASAN (NewsHour):  There was just one case on the docket today for this shorthanded Supreme Court.  But that case happened to be one of the biggest of the term, a dispute over immigration and the scope of presidential power.

The arguments inside the court drew hundreds of pro-immigration demonstrators outside, chanting, “Yes, we can” in Spanish.  They were there supporting the President’s program known as DAPA, Deferred Action for Parents of Americans.  It shields some four million people from deportation.

LUIS ORTEGA, Son of Undocumented Immigrant:  My dad travels all over the state of Texas.  And every time he goes out, we live in the fear that he’s going to be deported.  And families shouldn’t live like this.

HARI SREENIVASAN:  Congressional supporters also turned out to defend the President’s acting without congressional approval.

REP. LUIS GUTIERREZ (D), Illinois:  The President of the United States has taken actions that were clearly established today in the court that Ronald Reagan took, that George Bush took.

REP. ZOE LOFGREN (D), California:  It was made abundantly clear that the ability of the President to grant deferred action is of long standing and based in statute and regulation.  To deny that at this point would be an extraordinary departure from law and history.

HARI SREENIVASAN:  But Texas and 25 two other states have mounted the legal challenge to DAPA.  They argue the President did overstep his constitutional authority.

KEN PAXTON, Attorney General, Texas:  If we allow a President, whether it’s this President, or a future President; no matter what their political persuasion or their party, to make changes in the law without congressional approval, then we will end up with a perverted Constitution.

THE TAX MAN - IRS Commissioner

"IRS commissioner:  Funding cuts hinder security, efficiency" PBS NewsHour 4/18/2016

Congress, hint, YOU HAVE TO FUND upgrades for cyber security.


SUMMARY:  The IRS is facing tougher scrutiny than ever from Congress.  Last week, lawmakers repeatedly pressed IRS Commissioner John Koskinen on why the agency wasn't moving faster to improve cybersecurity, after hackers were able to breach its computers last year.  Koskinen joins Judy Woodruff to discuss their challenges.

JUDY WOODRUFF (NewsHour):  This is the day that the tax man cometh, or, more accurately, the day when millions of Americans will finish filing their taxes.

The Internal Revenue Service is never popular again.  But this year, it's facing ever tougher scrutiny, especially from Republicans in Congress.  Last week, lawmakers repeatedly pressed IRS Commissioner John Koskinen on why the agency wasn't moving faster to improve cyber-security.  The IRS has acknowledged hackers were able to breach its computers last year and swipe sensitive information about hundreds of thousands of taxpayers.

John Koskinen joins me now.

Mr. Koskinen, thank you for being with us.

JOHN KOSKINEN, IRS Commissioner:  Delighted to be here.

JUDY WOODRUFF:  What is it going to take to restore the confidence of the American people in the IRS?

JOHN KOSKINEN:  Well, I think what we have to do is first demonstrate to them that it's a fair system, that, if you hear from us, it's because of something in your return, not because who you voted for, what party you belong to, what church you go to.

Also, I think they have to understand that security of our data is a high priority.  Our systems are secure.  The problem has been that criminals organized around the world have a vast amount of personal information available to them.  And so they are increasingly successful as masquerading as taxpayers.

So, when they have gotten into some of our applications, it's because they had already stolen the information somewhere else and could in fact pretend very effectively that they were the taxpayer.

JUDY WOODRUFF:  So, when members of Congress after the IRS, come after you and say, why aren't you able to prevent this kind of thing, do you say it is just not doable?

JOHN KOSKINEN:  No, I say that we need to and are continuing to increase the levels of security, the authentication we require of taxpayers before they have access to significant applications that we're developing and continuing to roll out.

JUDY WOODRUFF:  And that's it?

JOHN KOSKINEN:  And that's it.

Well, and I think we have taken down the applications — two applications that were accessed by criminals masquerading as taxpayers.  And we will bring them back up with higher levels of authentication.  But, unfortunately, while it makes it more difficult, if not possible for the criminals to get through, it will be a little more difficult for the taxpayers to get through as well.
JUDY WOODRUFF:  You mentioned adequate funding.  It’s something, I think, many Americans look at the IRS and they say, well, why do you need more money?  You already have so much.  And, you know, why can’t you make do with what you have?

JOHN KOSKINEN:  Well, our budget was cut for five years in a row from 2010 to 2015 by over $1 billion, which meant that we have lost 15,000 to 17,000 employees over that time frame.

So, while we need to be more efficient and are working to do that, at some point — we have 10 million more taxpayers than we had — at some point, you actually begin to destroy the effectiveness of the agency.  So whether it’s taxpayer service, taxpayer enforcement, or even protection of the database, as we continue to struggle for funding, we continue to be at risk.

JUDY WOODRUFF:  And what does that mean for the American people?

JOHN KOSKINEN:  Well, it means that we estimate we are collecting $4 billion or $5 billion a year less than we would if we had 5,000 revenue agents, officers and criminal investigators we used to have five years ago.

GULF COAST - 'Zika is Coming'

"Is a perfect storm of Zika virus conditions coming to the Gulf Coast?" PBS NewsHour 4/18/2016

(click for better view)


SUMMARY:  In the wake of the CDC's revelation that Zika virus causes microcephaly in infants, doctors are grappling with the thorny issue of whether they should recommend that women in high-risk areas avoid getting pregnant this summer.  Hari Sreenivasan talks to Dr. Peter Hotez of Baylor College for more on how medical experts are confronting the prospect of Zika in the U.S.

HARI SREENIVASAN (NewsHour):  Worries over a potential Zika outbreak in the U.S., and who may suffer a bigger impact.

Public health officials have been increasingly concerned about the virus spreading via mosquitoes this summer.  One report even suggested government officials were split over whether to advise women to avoid pregnancy in areas where Zika is circulating.

In an op-ed titled “Zika Is Coming,” Dr. Peter Hotez focused on some of these questions and what it might mean in some cities in the southern parts of the country.  He’s the dean of the National School of Tropical Medicine at Baylor College of Medicine and a pediatrician and microbiologist at Texas Children’s Hospital.  I interviewed him from our New York studios.

I want to read you the first sentence of the op-ed you wrote in (link to op-ed) The New York Times recently.  It said: “If I were a pregnant woman living on the Gulf Coast or in Florida in an impoverished neighborhood and city like Houston, New Orleans, Miami, Biloxi, Mississippi, or Mobile, Alabama, I would be nervous right now.”


DR. PETER HOTEZ, Texas Children’s Hospital:  Well, the reason I made that statement, Hari, was because what we know, where this terrible birth defect, microcephaly, is happening.

It happens when pregnant women are bitten by the Aedes mosquitoes.  So, the first requirement is, it has to be a part of the world where we have the Aedes mosquito.  And, also, the other component that not many people appropriate is both crowding and poverty.

And the reason why poverty is so important is because women who live in poverty have increased exposure to mosquitoes because of absent — or broken window screens, collected garbage, environmental degradation near the home that breeds mosquitoes.

And so what you have on the Gulf Coast of the U.S. is the perfect storm of all three factors, the Aedes aegypti mosquito, the extreme poverty and crowding, that you would find in Northeastern Brazil, which is the epicenter of this epidemic or what we have seen moving into Colombia.

So, for all the reasons we’re seeing microcephaly cases appear in Brazil and Colombia, I believe we’re going to see on the Gulf Coast, especially as we move into the warmer months, when our mosquito numbers start to rise.

So we’re already finding Aedes aegypti mosquitoes on the Gulf Coast, including here in Houston.  But I’m very worried that as we go into the warmer months, those mosquito numbers are going to incline, with it, the poorer neighborhoods on Gulf Coast cities, such as Houston, New Orleans, others, are really going to be affected by Zika.

HARI SREENIVASAN:  So, what’s that timeline of progression that you see?  Not all mosquitoes have Zika.  It will take some time for some of them to get Zika, and then some of them to bite people, some of those people to have symptoms, some of those symptoms to be severe.

DR. PETER HOTEZ:  Well, arboviruses, viruses transmitted by mosquitoes are not new to the Gulf Coast.  We have experienced a number of epidemics of arboviral infections.

For instance, in 2003, Houston experienced an epidemic dengue fever caused by the same Aedes aegypti mosquito.  And what we found was, those numbers started to rise in May and into June, and with it, we then started seeing a dengue outbreak back in 2003.

LABOR UNIONS - So-Called 'Right-to-Work' Laws

"The Legal Argument That Could Overturn ‘Right-to-Work' Laws Around the Country" by Shaun Richman, In These Times 4/21/2016

Union supporters had reason to cheer earlier this month when Wisconsin Gov. Scott Walker's hated “right to work” law was overturned by a Dane County Circuit Judge.  Unfortunately, the decision is all but certain to be overturned by Wisconsin's conservative Supreme Court.  But contained in the case is a line of questioning over the constitutionality of the right-to-work concept that has quietly been playing out in federal courts.

The result could be that all right-to-work laws are nullified—and sooner than you might imagine.

“RTW” takes money and power from unions, but is that a ‘taking?'

The logic that the Wisconsin judge leaned upon in his decision has its origins in a federal case called Sweeney v. Pence, in which unions made an unsuccessful attempt to overturn Indiana's recent right-to-work statute on constitutional grounds.  Although the unions themselves did not raise this argument in the 2014 case, Chief Judge Diane Wood argued in her dissent that “right-to-work” provisions violate the U.S. Constitution's Takings Clause.

“This is a law,” says Marquette Law Professor Paul Secunda, “that compels one private party to provide benefits to another private party with no compensation.”  He is convinced that right-to-work laws, which permit represented workers to quit their union and stop paying fees while simultaneously obligating that union to continue to spend resources representing them, are an unconstitutional “taking.”

If the issue makes its way up to the Supreme Court, and the justices agree with Secunda, the result could overturn the section of the National Labor Relations Act that allows states to pass right-to-work measures as well as the statutes in all 26 states that have passed them in one fell swoop.

The Wisconsin case won't get there.  Because Wisconsin is in the same 7th Circuit that rejected the “takings” argument in Sweeny v. Pence (making it, for now, a settled matter there), unions filed their case in state court over the state's constitution.

But West Virginia and Michigan are states that recently passed right-to-work laws, and they are both in different federal court circuits.  Unions in those states could challenge the constitutionality of right to work on the federal level.  Unions in Idaho already have a case pending, which is a particularly exciting prospect as that state falls within the liberal 9th circuit.  (Keep an eye out for Operating Engineers Local 370 v. Wasden.)

The “takings” approach is not without its critics.  Seattle University Associate Professor of Law Charlotte Garden notes that Judge Wood's interpretation of the Takings clause is one more commonly advanced by anti-regulatory conservatives, and that labor taking up the cause could have unintended consequences.  “There's a difficulty of applying existing ‘takings' law in this kind of context,” she says.  “Takings” is generally applied to property, she says, and what's being taken from unions is the labor of their staff.

As an alternative strategy, Garden points out that the NLRB has indicated an openness to considering whether unions in right-to-work states can charge a fee to non-members who want to file a grievance.

Any rulemaking by the Board on right to work can expect to be challenged by business interests, which could open different constitutional questions about the law.  The Indiana unions actually argued in Sweeney v. Pence that the Taft-Hartley amendments to the NLRA were only meant to apply to questions of compelled union membership, not fees for service.  But I believe there remains a compelling argument about legislative intent.

Remembering our history will be vital to success

The judges who rejected the “takings” logic in Sweeney vs. Pence argued that unions weren't uncompensated for their duty to represent all workers in a bargaining unit.  They wrote, “we believe the union is justly compensated by federal law's grant to the Union the right to bargain exclusively with the employer.  The reason the Union must represent all employees is that the Union alone gets a seat at the negotiation table.”  This is a bunch of ahistorical nonsense that betrays a lack of understanding of labor relations and power dynamics.

But why should we expect a couple of judges to get this right when most union activists are so muddled on the history and effects of the duties of exclusive representation and the union shop?  To win, we need to understand our history and have real clarity on our goals to regain power.

When the National Labor Relations Act was written, unions were “members-only” organizations that competed with each other.  They contested for power in the same workplaces over who would make the best bargaining demands, who could extract the bigger concessions from management and who could organize the most successful job actions.  Employers hated this.

In pursuit of labor peace, employers began signing contracts with unions as the “sole and exclusive representative” of their workers.  These early contracts gave employers a one-year guarantee that there would be no new union demands and no strikes.  Unions went with it because it helped knock out the competition.  The NLRB, which had been certifying unions as representing their members only, also went with it and now certifies unions as exclusive representatives, exclusively.

Agency fee originated not merely as compensation for the financial costs of representing all the workers in a unit, but for the political costs.  During World War II, patriotically motivated unions pledged not to strike, and were rewarded with government-dictated wage freezes.  Workers protested by quitting their unions.  In order to keep unions from dropping their no-strike pledges, the War Labor Board began to reward unions a “maintenance of membership” rule which prevented workers from quitting the union during the term of a contract.  This evolved into the union shop and agency fees.

The combination of exclusive representation and agency fee does contain the potential for real power and real wins for unions, as well as labor peace for employers.  But it also tends to make unions more conservative and less militant.  Exclusive representation without agency fee is the worst of both worlds, and should be resisted.

For three quarters of a century the only way that the NLRB would “certify” a union was as the exclusive representative of all of the workers at a represented workplace, mostly with the union's understanding that it could bargain for a contract clause that obligates represented workers to pay some fair share of the union's expenses.

This “union certification” gives collective bargaining the force of law that an arm of the federal government—the NLRB—will drag an employer that refuses to recognize and bargain “in good faith” with a certified union to court to force them to.  So, for a union to tear up this “certification” to represent all of the workers and say, “we only represent our members now” carries the risk of losing the backing of the NLRB—but the potential reward of forcing the courts to grapple with the tradeoffs of forced representation without taxation.

To win big, we need a union in a right-to-work state that is genuinely willing to cede exclusive representation to kick out the scabs.

What I think this would look like is that union, just prior to the expiration of their current contract, filing a letter with the employer and the labor board disclaiming representation of the entire bargaining unit but demanding to bargain for their members only (and subsequently refusing to bargain over a no strike clause).  We've got a much stronger case if it's brought to federal court by an employer complaining that a union won't represent all the workers than one brought by a union complaining about a loss in agency fee revenue.

It is time to start using the courts more strategically

The idea that the Supreme Court could swing from seriously considering forcing the entire public sector to go right-to-work in this term, to weighing the very constitutionality of right-to-work laws two or three years later might seem too fantastical, but such is the strange lack of case law over the underlying legal justification for requiring that a union represent all the workers but forbidding them to mandate dues and fees for that service work.

“This isn't stare decisis at all,” says Paul Secunda, describing the Latin term for the legal obligation of judges to stand by settled decisions.  “You've got one decision from one circuit court.  This is hardly settled case law.”

As I've noted, unions have tended to shy away from judicial strategies, and, on right to work in particular, labor has long favored a legislative solution.  Repealing the Taft-Hartley Act that contained the right-to-work amendment to our nation's main labor law was the top legislative priority of the AFL, the CIO and its merged successor from the time of its passage in 1947 well into the 1980s.

There were 12 right-to-work laws on the books—all in former slave states—at the time of Taft-Hartley's passage.  They had no force of law, as the federal NLRA preempted them—that is, until Taft-Hartley.  And again, a close look at the legislative intent might reveal that Congress merely meant to allow states to ban union membership—not agency fees—as a requirement of employment.  Or, more crudely, they may have basically been saying, “Let the Confederacy secede from the New Deal.”

The AFL and the CIO, which by 1947 had both abandoned organizing the south, seemingly wrote the former Confederacy off at the time.  Since labor lost little to no membership as a result of those first 12 right-to-work states, little brainpower was devoted to challenging the constitutionality of the scheme.  Likewise, when right to work next spread to western and plains states like Arizona and Nebraska, labor similarly wrote them off.

When right to work first spread to a bedrock labor stronghold, Indiana in 1959, the move was so controversial that within eight years labor had managed to overthrow the Republicans, who supported it in all three chambers of government and repeal the law.  This win—the only instance of a right-to-work law being repealed legislatively—may have ultimately been counterproductive, giving unions false hope that killing right to work is a matter of making sure the bad guys don't win re-election.

The labor movement of 1965 could entertain such fantasies.  The labor movement that has seen bases of union power in Indiana, Michigan, Wisconsin, and West Virginia go “right-to-work” within the same half decade must wake up to the fact that it will take more than elections to reverse the damage.  It will also take a judicial activism agenda for labor, like I have advocated.

And ultimately, working people in America will gain no new rights without stoking a hell of a lot of chaos, through strikes and more.  But we'll also gain no new rights without legal demands like the Operating Engineers Local 370 v. Wasden case hanging out there.  It is now up to the sisters and brothers in other “right-to-work” states—Michigan, West Virginia and beyond—to join the fight.

Friday, April 22, 2016


"Why Haven't Bankers Been Punished?  Just Read These Insider SEC Emails" by Jesse Eisinger, ProPublica 4/21/2016

Right after the financial crisis, an SEC lawyer fought a lonely struggle to get his agency to crackdown harder on Goldman bankers.  He lost.

This story was co-published with The New Yorker.  It is not subject to our Creative Commons license.

In the late summer of 2009, lawyers at the Securities and Exchange Commission were preparing to bring charges in what they expected would be their first big crackdown coming out of the financial crisis.  The investigators had been looking into Goldman Sachs' mortgage-securities business, and were preparing to take on the bank over a complex deal, known as Abacus, that it had arranged with a hedge fund.  They believed that Goldman had committed securities violations in developing Abacus, and were ready to charge the firm.

James Kidney, a longtime SEC lawyer, was assigned to take the completed investigation and bring the case to trial.  Right away, something seemed amiss.  He thought that the staff had assembled enough evidence to support charging individuals.  At the very least, he felt, the agency should continue to investigate more senior executives at Goldman and John Paulson & Co., the hedge fund run by John Paulson that made about a billion dollars from the Abacus deal.  In his view, the SEC staff was more worried about the effect the case would have on Wall Street executives, a fear that deepened when he read an email from Reid Muoio, the head of the SEC's team looking into complex mortgage securities.  Muoio, who had worked at the agency for years, told colleagues that he had seen the “devasting [sic] impact our little ol' civil actions reap on real people more often than I care to remember.  It is the least favorite part of the job.  Most of our civil defendants are good people who have done one bad thing.”  This attitude agitated Kidney, and he felt that it held his agency back from pursuing the people who made the decisions that led to the financial collapse.

While the SEC, as well as federal prosecutors, eventually wrenched billions of dollars from the big banks, a vexing question remains:  Why did no top bankers go to prison?  Some have pointed out that statutes weren't strong enough in some areas and resources were scarce, and while there is truth in those arguments, subtler reasons were also at play.  During a year spent researching for a book on this subject, I've come across case after case in which regulators were reluctant to use the laws and resources available to them.  Members of the public don't have a full sense of the issue because they rarely get to see how such decisions are made inside government agencies.

Kidney was on the inside at a crucial moment.  Now retired after decades of service to the SEC, Kidney recently provided me with a cache of internal documents and emails about the Abacus investigation.  The agency holds the case up as a success, and in some ways it was:  Goldman had to pay a $550 million fine, and a low-ranking trader was found liable for violating securities laws.  But the documents provided by Kidney show that SEC officials considered and rejected a much broader case against Goldman and John Paulson & Co.

Kidney has criticized the SEC publicly in the past, and the agency's handling of the Abacus case has been previously described, most thoroughly in a piece by Susan Beck, in The American Lawyer, but the documents provided by Kidney offer new details about how the SEC handled its case against Goldman.  The SEC declined to comment on the emails or the Abacus investigation, citing its policies not to comment on individual probes.  In a recent interview with me, Muoio stood by the agency's investigation and its case.  “Results matter.  It was a clear win against a company and culpable individual.  We put it to a jury and won,” he said.

Kidney, for his part, came to believe that the big banks had “captured” his agency — that is, that the SEC, which is charged with keeping financial institutions in line, had become overly cautious to the point of cowardice.

The Abacus investigation traces to a moment in late 2006 when the hedge fund Paulson & Co. asked Goldman to create an investment that would pay off if U.S. housing prices fell. Paulson was hoping to place a bet on what we now know as “the big short”: the notion that the real-estate market was inflated by an epic bubble and would soon collapse.  To facilitate Paulson's short position, Goldman created Abacus, an investment composed of what amounted to side bets on mortgage bonds.  Abacus would pay off big if people began defaulting on their mortgages.  Goldman marketed the investment to a bank in Germany that was willing to take the opposite side of the bet — that housing prices would remain stable.  The bank, IKB, was cautious enough to ask that Goldman hire an independent manager to assemble the deal and look out for its interests.

This is where things got dodgy.  Unbeknownst to IKB, the hedge fund Paulson & Co. improved its odds of success by inducing the manager, a company called ACA Capital, to include the diciest possible housing bonds in the deal.  Paulson wasn't just betting on the horse race.  The fund was secretly slipping Quaaludes to the favorite.  ACA did not understand that Paulson was betting against the security.  Goldman knew, but didn't give either ACA or IKB the full picture.  (For its part, Paulson & Co. contended that ACA was free to reject its suggestions and said that it never misled anyone in the deal.)

When SEC officials discovered this in 2009, they decided that Goldman Sachs had misled both the German bank and ACA by making false statements and omitting what the law terms “material details” — and that these actions constituted a violation of securities law.  (The SEC oversees civil enforcement of U.S. securities law and can charge both companies and individuals with violations.  Its work can often be a precursor to criminal cases, which are handled by prosecutors at the Justice Department.)

Kidney was a trial attorney with two decades of experience at the SEC, and had won his share of courtroom battles.  But the stakes in this case were particularly high.  Politically, it was a delicate moment.  The global financial system was only just recovering, millions of Americans had lost their jobs, and there was growing public anger about the bailout of the banks and car companies in Detroit.  When Kidney looked at the work that had been done on the case, he found what he saw as serious shortcomings.  For one, SEC investigators had not interviewed enough executives.  For another, the staff decided to charge only the lowest man on the totem pole, a midlevel Goldman trader named Fabrice Tourre, a French citizen who lived in London, and who was in his late twenties when the deal came together.  Tourre had joked about selling the doomed deal to “widows and orphans,” and had referred to himself as “Fabulous Fab,'' a sobriquet that probably would not endear him to a jury.  He was an easy target, but charging him was not likely to send a signal that Washington was serious about cracking down on Wall Street's excesses.

Kidney could not understand why SEC staffers were reluctant to investigate Tourre's bosses at Goldman or anyone at Paulson & Co. Charging only Goldman, he said, would send exactly the wrong message to Wall Street.  “This appears to be an unbelievable fraud,” he wrote to his boss, Luis Mejia.  “I don't think we should bring it without naming all those we believe to be liable.”

Kidney came to work at the SEC in 1986.  He was thirty-nine at the time, having first worked a stint as a journalist.  The “steam was elevated” at the agency when he started there, he said.  Young lawyers were expected to go after the big names, and they did: the junk-bond king Michael Milken, the insider trader Ivan Boesky, the investment banker Martin A. Siegel.

As a trial lawyer, Kidney's job was to develop a compelling narrative that could be presented to a jury of laymen unfamiliar with the intricacies of finance.  “Jim was a great attorney.  A lawyer's lawyer.  Sound legal mind, excellent writer, and a true trial lawyer,” said Terence Healy, the vice-chair of securities enforcement practice at Hughes Hubbard and a former colleague of Kidney's at the SEC.  But Kidney also exasperated some staffers who thought he wasn't detail-oriented and didn't grasp nuances.

Soon after he joined the case, Kidney believed that the evidence the SEC staff had assembled justified charges against more people and he argued for, at the very least, an investigation of higher-level executives.  The SEC team had not interviewed Tourre's direct superior, Jonathan Egol.  Nor had they questioned top bankers in Goldman's mortgage businesses or any of the bank's senior executives.  Even more surprising to Kidney, the agency had not taken testimony from John Paulson, the key figure at his eponymous hedge fund.  It seemed to Kidney, as he reviewed the case materials, that the agency had spent more time and effort investigating much smaller insider-trading cases.  Just two weeks after he joined the case, on August 14th, Kidney urged the team to broaden its investigation and issue key participants in the Abacus deal what are known as Wells notices — official notification that the SEC is considering charges.

Kidney's view of the case put him at odds with Muoio, who was widely respected at the agency for his analytical abilities.  Kidney said that he was aghast when, in an email sent a month later congratulating his team on their work investigating Tourre, Muoio described potential targets of SEC charges as “good people who had done one bad thing,'' and he did little to hide his irritation.

“I am in full agreement that when we sue it can be devastating, and that we have sued little guys way too often on flimsy charges or when they have been punished enough,'' he wrote back.  “But I'm not at all convinced that Tourre alone is sufficient here.”

Kidney later explained to Muoio that he was pushing for a more assertive approach because he believed that the SEC had grown too passive in its oversight of Wall Street.  “The damage to the reputation of the [SEC] in the last few years and the decline of the institution are very troubling to me,” he wrote.

Kidney and Muoio battled for months.  Kidney felt that the agency was overly dependent on the kind of direct evidence it had against Tourre.  Part of the problem was that high-level Goldman executives had been savvier in how they communicated: when topics broached sensitive territory in emails, they would often write “LDL” — let's discuss live.

Kidney pressed the team to take what he thought were obvious investigative steps.  He had been told by a staff attorney in the group that Muoio had vetoed the idea of calling Paulson to testify, and the agency hadn't subpoenaed Paulson's emails initially, relying mainly on the voluntary disclosure of documents.  “We didn't get subpoena power until late in the investigation,” a staff attorney acknowledged to Kidney in an email sent late in August of 2009.

As the year ended, Muoio remained opposed to bringing charges against anyone but Tourre.  In a December 30th email, sent to the entire group investigating the deal, Muoio offered an explanation for what had happened during the bubble years:  “Now that we are gearing up to bring a handful of cases in this area, I suggest that we keep in mind that the vast majority of the losses suffered had nothing to do with fraud and the like and are more fairly attributable to lesser human failings of greed, arrogance and stupidity of which we are all guilty from time to time.”

Several days later, Kidney sent an email to Lorin Reisner, the SEC's deputy director of enforcement, in which he warned, “We must be on guard against any risk that we adopt the thinking of those sponsoring these structures and join the Wall Street Elders, if you will.”

Kidney also continued to push the agency to bring charges against Egol, Tourre's superior at Goldman, arguing that the SEC should at least interview him.  According to Kidney, Muoio dismissed the idea, saying that the agency knew what Egol would say.

“That's a cardinal sin in an investigation,'' Kidney said that he told Muoio.  “You can't assume what somebody will say.”

One reason for the reluctance from Muoio and others at the SEC was that they wanted to make the case about misleading statements and they didn't have that sort of evidence from Paulson & Co. employees or high-level Goldman executives.

Kidney told me that he thought the SEC could avail itself of a broader interpretation of securities law.  He argued that the agency should file civil actions against top players at both the bank and the hedge fund under a concept called “scheme liability” — a doctrine of securities law that makes it illegal to sell financial products whose main purpose is to deceive investors.

In late October of 2009, Kidney circulated a long memo arguing that the SEC should consider charging Paulson & Co., John Paulson himself, and Paolo Pellegrini, who was the hedge fund executive who worked on the Abacus deal.

“Each of them knowingly participated, as did Goldman and Tourre, in a scheme to sell a product which, in blunt but accurate terms, was designed to fail,” Kidney's memo said.  “In other words, the current pre-discovery evidence suggests they should be sued for securities fraud because they are liable for securities fraud.”

John Paulson and Pellegrini declined to comment for this article.  Paulson & Co. and Goldman dispute that the deal was fraudulent.  A spokesman for the Paulson hedge fund said that “there was no ‘scheme' nor was Abacus ‘designed to fail'” and that the hedge fund neither told Goldman what to disclose to investors nor knew anything about what the bank was telling investors.  A Goldman spokesman said that the bank never created mortgage-related products that were designed to fail.  He said the precipitous collapse in the value of Abacus, which fell to zero several months after it had been created, resulted from the broad decline in the housing market that afflicted all securities related to real estate, not because of flaws in the product.

Some of Kidney's colleagues initially supported his idea to pursue scheme liability, but Muoio seemed to think that doing so would hurt the agency's solid but narrower case against Goldman.  “I continue to have serious reservations about charging Paulson on our facts,'' Muoio wrote.  “And I worry that doing so could severely undermine and delay our solid case against Goldman.” Muoio's viewpoint, again, prevailed.

Muoio, in a recent interview with me, dismissed Kidney's complaints.  “I cannot imagine any basis for claiming ‘regulatory capture,' given that I have never worked in industry or finance and given the cases I have made, including very significant cases against banks, auditing firms, companies and senior executives," he said.

Even after he lost the debate over scheme liability, Kidney continued to argue for charging Jonathan Egol with securities-law violations.  One staffer wrote that the SEC had testimony, but little documentary evidence, proving that Egol had reviewed the Abacus documents.  “The law surely imposes liability on others besides the literal scrivenor [sic], or we are in big trouble,” Kidney shot back in an email.  “Why are we working so hard to defend a guy who is now a managing director at Goldman so we can limit the case to the French guy in London?”

“I am sure you are not suggesting we charge Egol because of his position within the company,” Muoio replied.  “Nationality is also clearly irrelevant and I hope that's the last we hear from you on that subject.  Tourre admits he was principally responsible for the problematic disclosures.”

Members of the SEC staff finally interviewed Egol in January.  Muoio would later tell the SEC inspector general:  “We didn't lay a glove on him.” But Kidney felt differently.  As he saw it, Egol had acknowledged reviewing all the documents that the SEC had deemed misleading.

On January 29, 2010, after months of investigation and debate, the SEC provided a Wells notice to Jonathan Egol.  Neither Egol nor his lawyers responded to repeated calls and emails seeking comment.

Things dragged on.  In March, Muoio wrote an email arguing against charging Egol, saying that, among other reasons, he “will strike most jurors as nice, likable, down-to-earth family man.”  On the afternoon of March 22nd, the team gathered in the office of Robert Khuzami, the SEC's director of enforcement, for a meeting.  Kidney, Lorin Reisner, and one other lawyer present were in favor of suing Egol; Muoio remained implacably against, as did others.  Most of the lower-level staffers stayed quiet.

The following day, Khuzami emailed the group with his decision: “I am a no on Egol.  An extremely difficult call,” he wrote.  “The lack of consensus among our group is itself, for me, confirmation of this conclusion.” Khuzami did not respond to a request for comment for this article.

Kidney had lost.  He was offered the job of handling the expert witnesses for the trial but knew what that meant — that he was getting demoted.  He declined.

On Friday, April 16, 2010, the SEC stunned the markets, suing Goldman Sachs and charging the firm with omitting information that would have been crucial to investors in Abacus.  The agency brought a charge against Tourre, as well.  Goldman's stock dropped thirteen per cent that day, erasing $10 billion of its market capitalization.

A couple of months later, on July 15, 2010, the SEC settled with Goldman for $550 million.  Goldman Sachs did not admit any wrongdoing.  The SEC wrung an apology out of the bank, which the agency perceived as scoring a victory that critics called inadequate.

It would be the only SEC action brought against the bank for its actions in this corner of the mortgage securities markets just before the meltdown, although a Senate investigation uncovered questionable behavior related to other Goldman mortgage securities.  The Justice Department recently settled a case with Goldman that charged that the bank had misrepresented mortgage-backed securities.  The bank had to pay on the order of $5 billion.  The Justice Department did not charge any individuals.

In 2013, Fabrice Tourre was found liable in a civil trial and ordered to pay more than $850,000.  He is now a Ph.D. candidate at the University of Chicago.

Kidney became disillusioned.  Upon retiring, in 2014, he gave an impassioned going-away speech, in which he called the SEC “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors.”

In our conversations, Kidney reflected on why that might be.  The oft-cited explanations — campaign contributions and the allure of private-sector jobs to low-paid government lawyers — have certainly played a role.  But to Kidney, the driving force was something subtler.  Over the course of three decades, the concept of the government as an active player had been tarnished in the minds of the public and the civil servants inside working inside the agency.  In his view, regulatory capture is a psychological process in which officials become increasingly gun shy in the face of criticism from their bosses, Congress, and the industry the agency is supposed to oversee.  Leads aren't pursued.  Cases are never opened.  Wall Street executives are not forced to explain their actions.

Kidney still rues the Goldman case as a missed chance to learn the lessons of the financial crisis.  “The answers to unasked questions are now lost to history as well as to law enforcement,“ he said.  ”It is a shame.”