JIM RUTENBERG
WASHINGTON — Richard L. Scott is unusual in these tough economic times: a rich, conservative investor willing to spend freely on a political cause.
Mr. Scott is starring in his own rotation of advertisements against the broad outlines of President Obama’s health care plans. (“Imagine waking up one day and all your medical decisions are made by a central, national board,” he warns in a radio spot.) He has dispatched camera crews to other countries to document the perils of socialized medicine.
He visited with lawmakers on Capitol Hill this week, and his new group, Conservatives for Patients’ Rights, has hired a leading conservative public relations firm, CRC, well known for its work with Swift Boat Veterans for Truth, the group that attacked Senator John Kerry, Democrat of Massachusetts, during his presidential campaign.
Mr. Scott’s emergence this spring as the most visible conservative opponent to Mr. Obama’s not-fully-defined health care effort has former friends and foes alike doing double takes, given Mr. Scott’s history.
Once lauded for building Columbia/HCA into the largest health care company in the world, Mr. Scott was ousted by his own board of directors in 1997 amid the nation’s biggest health care fraud scandal. The company’s guilty plea and payment of $1.7 billion to settle charges including the overbilling of state and federal health programs was taken as a repudiation of Mr. Scott’s relentless bottom-line approach.
“He hopes people don’t Google his name,” said John E. Hartwig, a former deputy inspector general at the Department of Health and Human Services, one of various state and federal agencies that investigated Columbia/HCA when Mr. Scott was its chief executive.
Liberal groups planning to defend the administration’s health care plan, whatever form it takes, are seizing on Mr. Scott’s background through Web videos, fact sheets, blog postings and unflattering additions to his Wikipedia entry, which until recently did not mention his ouster from Columbia.
“He’s a great symbol from our point of view,” said Richard J. Kirsch, the national campaign manager for Health Care for America Now. “We cannot have a better first person to attack health care reform than someone who ran a company that ripped off the government of hundreds of millions of dollars.”
Conservative health care activists, while glad to have a potential ally willing to spend $5 million out of his own pocket, are not fully embracing Mr. Scott, noting that he is entering a changed landscape in which some Republicans and industry groups that opposed President Bill Clinton’s health care proposals now view some form of change as necessary and inevitable.
“At the end of the day, they may come up with something we like,” said John C. Goodman, a leading conservative health care policy expert. “We shouldn’t just assume that this is something horrible — if this is something horrible, we will be against it.”
“There is no Obama plan that’s been made public yet, so what’s the point of running ads?” Mr. Goodman added. “I don’t see that you gain anything except attention for Rick Scott.”
Some former allies are more hostile toward Mr. Scott, painting him as counterproductive to their efforts for compromise.
“I just don’t understand why he would be a messenger people would listen to,” said Charles N. Kahn III, who was a senior executive with the insurance industry group that ran the “Harry & Louise” advertisements credited with helping to kill the Clinton plan 15 years ago but who is working for a deal now. “I don’t think people are waiting to hear from him.”
Mr. Kahn, a Republican, is now the head of the Federation of American Hospitals, a private-hospitals group.
Mr. Scott is showing more support from some Republicans in Congress, though. Representative Michael C. Burgess, Republican of Texas and a member of the House health subcommittee, said in an interview that he had invited Mr. Scott to meet with him on Tuesday because he liked what Mr. Scott had been saying.
Mr. Scott declined several interview requests. His public relations firm, after initially offering to make him available for a discussion, later declined to answer questions about him, citing an exclusive arrangement with another publication.
In recent years, Mr. Scott, 56, has settled into a comfortable life in Naples, Fla., where he has built an investment portfolio that includes a chain of urgent-care clinics, some located in Wal-Mart stores, which Mr. Scott promotes as inexpensive alternatives to emergency rooms, especially for the uninsured.
Mr. Scott has said his sole policy interest is to see to it that whatever overhaul Mr. Obama and Congress consider does not move the country toward a socialized system and away from what he calls his four pillars of reform: “choice, competition, accountability and personal responsibility.”
“After spending over two decades in the health care provider industry, I’ve seen these principles work firsthand,” Mr. Scott said in a recent statement in which he also criticized Mr. Obama for seeking a $634 billion reserve fund for unspecified changes to the health care system.
Mr. Scott’s supporters say that he has been unfairly attacked over the years for challenging the longstanding orthodoxy of the nonprofit health care establishment.
“He has a much more businesslike approach to health care than anybody I’ve ever seen, and it is much more bottom-line-driven,” said Joshua Nemzoff, a hospital consultant based in New Hope, Pa., who has represented nonprofit hospitals in several deals with Mr. Scott. “He’s aggressive, and sometimes that rubs people the wrong way.”
Mr. Scott, a former Navy radar operator, built what would become Columbia/HCA from two hospitals in Texas into the largest health care chain in the world over just a few years. He seemed to relish publicly lambasting the nonprofit hospitals against which he competed and which he described as “non-taxpaying hospitals” impervious to real-world business concerns.
His approach earned him plenty of enmity, but also high praise. In 1996, Time magazine named him one of the “25 most influential Americans” for “transforming how American hospitals do business,” with an operation that “consolidates operations and imposes cost controls.”
Though Mr. Scott was not directly implicated in the fraud scandal — with whistle-blower suits filed against some hospitals before his acquisition of them — critics said his drive for profits had created incentive for fraud.
“The practices did pre-exist Rick Scott,’ said Stephen Meagher, a lawyer who represented some of the ex-employees whose complaints prompted the initial investigation. “They were aggravated by the pressure he put on HCA employees.”
In an interview this week with The Washington Independent, Mr. Scott said of the charges against his former company, “If you go back and look at the hospital industry, and the whole health care industry since the mid-1990s, it was constantly going through investigations.” He added, “Great institutions, like ours, paid fines.”
One defender of Mr. Scott, Mr. Burgess, the Texas lawmaker and a former HCA doctor, said of the investigation, “A lot of us just looked at it as somebody in Washington playing politics.”
Others say the scandal took place so long ago they can hardly remember it. “I remembered reading a newspaper article about it all,” said Merrill Matthews Jr., director of the Council for Affordable Health Insurance, a group that formed to fight the Clinton proposals and expects to fight Mr. Obama’s. Mr. Matthews said he would not shun Mr. Scott. “He’s bringing a lot of money to the table,” he said.
Wednesday, April 01, 2009
CSI is it real or so much bull....?
Report questions science, reliability of crime lab evidence
The National Academy of Sciences says many courtroom claims about fingerprints, bite marks and other evidence lack scientific verification. It finds forensics inconsistent and in disarray nationwide.
By Jason Felch and Maura Dolan
February 19, 2009
Sweeping claims made in courtrooms about fingerprints, ballistics, bite marks and other forensic evidence often have little or no basis in science, according to a landmark report released Wednesday by the nation's leading science body.
The National Academy of Sciences report called for a wholesale overhaul of the crime lab system, which has become increasingly crucial to American jurisprudence.
Many experts said the report could have a broad impact on crime labs and the courts, ushering in changes at least as significant as those generated by the advent of DNA evidence two decades ago. But the substantial reforms would require years of planning and major federal funding.
In the meantime, the findings are expected to unleash a flood of new legal challenges by defense attorneys.
"This is a major turning point in the history of forensic science in America," said Barry Scheck, co-founder of the Innocence Project, an organization dedicated to exonerating the wrongfully convicted. He said the findings would immediately lead to court challenges.
"If this report does not result in real change, when will it ever happen?" Scheck asked.
The Los Angeles County Public Defender's office plans to use the National Academy report to file challenges on the admissibility of fingerprint evidence and is reviewing cases in which fingerprints played a primary role in convictions, officials said.
Separately, the Los Angeles Police Department has been reviewing 1,000 fingerprint cases after discovering that two people were wrongfully accused because of faulty fingerprint analyses.
The academy, the preeminent science advisor to the federal government, found a system in disarray: labs that are underfunded and beholden to law enforcement and that lack independent oversight and consistent standards.
The report concludes that the deficiencies pose "a continuing and serious threat to the quality and credibility of forensic science practice," imperiling efforts to protect society from criminals and shield innocent people from convictions.
With the notable exception of DNA evidence, the report says that many forensic methods have never been shown to consistently and reliably connect crime scene evidence to specific people or sources.
"The simple reality is that the interpretation of forensic evidence is not always based on scientific studies to determine its validity," the report says.
For example, frequent claims that fingerprint analysis had a zero error rate are "not scientifically plausible," the report said. The scientific basis for bite mark evidence is called "insufficient to conclude that bite mark comparisons can result in a conclusive match."
Recent cases of CSI gone awry have underscored the report's urgency. In the cases of the 232 people exonerated by DNA evidence, more than half involved faulty or invalidated forensic science, according to the Innocence Project.
Margaret Berger, a professor at Brooklyn Law School and a member of the panel, explained: "We're not saying all these disciplines are useless. We're saying there is a lot of work that needs to be done."
Said U.S. Court of Appeals Judge Harry Edwards, co-chairman of the panel: "There are a lot of people who are concerned, and they should be concerned. Forensic science is the handmaiden of the legal system. . . . If you claim to be science, you ought to put yourself to the test."
Although the panel's recommendations are not binding, they are expected to be influential. Among the recommendations:
* Create a new federal agency, the National Institute of Forensic Science, to fund scientific research and disseminate basic standards.
* Make crime labs independent of law enforcement. Most crime labs are run by police agencies, which can lead to bias, a growing body of research shows.
* Require that expert witnesses and forensic analysts be certified by the new agency, and that labs be accredited.
* Fund research into the scientific basis for claims routinely made in court, as well as studies of the accuracy and reliability of forensic techniques.
Those recommendations have been cautiously embraced by leading associations of forensic scientists, which in 2005 helped convince Congress that the study was necessary.
"You can't continue to do business in 2009 the way you did in 1915," said Joseph Polski of the International Assn. for Identification, whose members include examiners of fingerprints, documents, footwear and tire tracks. "We knew there would be things in there we'd like and things we didn't like."
Many forensic scientists were hesitant to criticize the report for fear of seeming resistant to testing and scrutiny. But there were some delicate complaints.
"It's not the science of forensic science that is in need of repair, I think; it's how the results are interpreted in the courtroom," said Dean Gialamis, head of the American Society of Crime Lab Directors, who was quick to add that his group welcomed the recommendations.
The report was hailed by many defense attorneys, scientists and law professors, who for years have been raising scientific and legal challenges.
"The courts were highly skeptical of experts and resistant to hearing their arguments," said Simon A. Cole, a professor of criminology at UC Irvine who has often testified for defense teams about the limitations of fingerprint evidence. "I feel like I'm Alice coming out of the rabbit hole and back into a world of sanity and reason."
The report had harsh words for the FBI Laboratory and the National Institute of Justice, the research arm of the Justice Department, which have shown little enthusiasm for exploring the shortcomings of forensic science.
"Neither agency has recognized, let alone articulated, a need for change," the report states, adding that they could be subject to pro-prosecution biases.
Atty. Gen. Eric H. Holder Jr. signaled in comments to reporters shortly before the report was released that he would take its concerns seriously: "I think we need to devote a lot of attention and a lot of resources to that problem."
Prosectors on the front lines, however, were more skeptical. "I know the defense is probably starting bonfires, but this should not in any way shake up anyone's confidence in forensics," said Paula Wulff, manager and senior attorney of the DNA Forensic Program of the National District Attorneys Assn.
She called the recommendations a "Cadillac of aspirations," and expressed doubt that they would be followed given the poor state of the economy.
All sides, however, agreed that the report signals an aggressive reentry of scientists into issues that for decades have fallen to lawyers, judges and juries to resolve.
The National Academy of Sciences says many courtroom claims about fingerprints, bite marks and other evidence lack scientific verification. It finds forensics inconsistent and in disarray nationwide.
By Jason Felch and Maura Dolan
February 19, 2009
Sweeping claims made in courtrooms about fingerprints, ballistics, bite marks and other forensic evidence often have little or no basis in science, according to a landmark report released Wednesday by the nation's leading science body.
The National Academy of Sciences report called for a wholesale overhaul of the crime lab system, which has become increasingly crucial to American jurisprudence.
Many experts said the report could have a broad impact on crime labs and the courts, ushering in changes at least as significant as those generated by the advent of DNA evidence two decades ago. But the substantial reforms would require years of planning and major federal funding.
In the meantime, the findings are expected to unleash a flood of new legal challenges by defense attorneys.
"This is a major turning point in the history of forensic science in America," said Barry Scheck, co-founder of the Innocence Project, an organization dedicated to exonerating the wrongfully convicted. He said the findings would immediately lead to court challenges.
"If this report does not result in real change, when will it ever happen?" Scheck asked.
The Los Angeles County Public Defender's office plans to use the National Academy report to file challenges on the admissibility of fingerprint evidence and is reviewing cases in which fingerprints played a primary role in convictions, officials said.
Separately, the Los Angeles Police Department has been reviewing 1,000 fingerprint cases after discovering that two people were wrongfully accused because of faulty fingerprint analyses.
The academy, the preeminent science advisor to the federal government, found a system in disarray: labs that are underfunded and beholden to law enforcement and that lack independent oversight and consistent standards.
The report concludes that the deficiencies pose "a continuing and serious threat to the quality and credibility of forensic science practice," imperiling efforts to protect society from criminals and shield innocent people from convictions.
With the notable exception of DNA evidence, the report says that many forensic methods have never been shown to consistently and reliably connect crime scene evidence to specific people or sources.
"The simple reality is that the interpretation of forensic evidence is not always based on scientific studies to determine its validity," the report says.
For example, frequent claims that fingerprint analysis had a zero error rate are "not scientifically plausible," the report said. The scientific basis for bite mark evidence is called "insufficient to conclude that bite mark comparisons can result in a conclusive match."
Recent cases of CSI gone awry have underscored the report's urgency. In the cases of the 232 people exonerated by DNA evidence, more than half involved faulty or invalidated forensic science, according to the Innocence Project.
Margaret Berger, a professor at Brooklyn Law School and a member of the panel, explained: "We're not saying all these disciplines are useless. We're saying there is a lot of work that needs to be done."
Said U.S. Court of Appeals Judge Harry Edwards, co-chairman of the panel: "There are a lot of people who are concerned, and they should be concerned. Forensic science is the handmaiden of the legal system. . . . If you claim to be science, you ought to put yourself to the test."
Although the panel's recommendations are not binding, they are expected to be influential. Among the recommendations:
* Create a new federal agency, the National Institute of Forensic Science, to fund scientific research and disseminate basic standards.
* Make crime labs independent of law enforcement. Most crime labs are run by police agencies, which can lead to bias, a growing body of research shows.
* Require that expert witnesses and forensic analysts be certified by the new agency, and that labs be accredited.
* Fund research into the scientific basis for claims routinely made in court, as well as studies of the accuracy and reliability of forensic techniques.
Those recommendations have been cautiously embraced by leading associations of forensic scientists, which in 2005 helped convince Congress that the study was necessary.
"You can't continue to do business in 2009 the way you did in 1915," said Joseph Polski of the International Assn. for Identification, whose members include examiners of fingerprints, documents, footwear and tire tracks. "We knew there would be things in there we'd like and things we didn't like."
Many forensic scientists were hesitant to criticize the report for fear of seeming resistant to testing and scrutiny. But there were some delicate complaints.
"It's not the science of forensic science that is in need of repair, I think; it's how the results are interpreted in the courtroom," said Dean Gialamis, head of the American Society of Crime Lab Directors, who was quick to add that his group welcomed the recommendations.
The report was hailed by many defense attorneys, scientists and law professors, who for years have been raising scientific and legal challenges.
"The courts were highly skeptical of experts and resistant to hearing their arguments," said Simon A. Cole, a professor of criminology at UC Irvine who has often testified for defense teams about the limitations of fingerprint evidence. "I feel like I'm Alice coming out of the rabbit hole and back into a world of sanity and reason."
The report had harsh words for the FBI Laboratory and the National Institute of Justice, the research arm of the Justice Department, which have shown little enthusiasm for exploring the shortcomings of forensic science.
"Neither agency has recognized, let alone articulated, a need for change," the report states, adding that they could be subject to pro-prosecution biases.
Atty. Gen. Eric H. Holder Jr. signaled in comments to reporters shortly before the report was released that he would take its concerns seriously: "I think we need to devote a lot of attention and a lot of resources to that problem."
Prosectors on the front lines, however, were more skeptical. "I know the defense is probably starting bonfires, but this should not in any way shake up anyone's confidence in forensics," said Paula Wulff, manager and senior attorney of the DNA Forensic Program of the National District Attorneys Assn.
She called the recommendations a "Cadillac of aspirations," and expressed doubt that they would be followed given the poor state of the economy.
All sides, however, agreed that the report signals an aggressive reentry of scientists into issues that for decades have fallen to lawyers, judges and juries to resolve.
Iraqi Militants Show a New Boldness in Cities
ALISSA J. RUBIN
BAGHDAD — As the American military prepares to withdraw from Iraqi cities, Iraqi and American security officials say that jihadi and Baath militants are rejoining the fight in areas that are largely quiet now, regrouping as a smaller but still lethal insurgency.
There is much debate as to whether any new insurgency, at a time of relative calm in most of Iraq, could ever produce the same levels of violence as existed at the height of the fighting here. A recent series of attacks, however, like bubbles that indicate fish beneath still water, suggest the potential danger, all the more perilous now because the American troops who helped to pacify Iraq are leaving.
Several well-planned bombings, one on a street recently reopened because it was thought to be safe, have killed 123 people, most of them in and around Baghdad. Three were suicide bombings, signatures of Al Qaeda in Mesopotamia, a homegrown Sunni extremist group with some foreign leadership.
Assassination attempts on members of the Awakening movement, some of them former insurgents who switched sides for pay, are rising, as are fears that some of the members are joining Islamic extremists or other insurgent groups. On Saturday an important Awakening leader was arrested on charges, among others, of being a member of the military wing of the outlawed Baath Party, formerly led by Saddam Hussein.
Detainees, some innocent, but many of them former insurgents long held in American military custody, are being set free every day, potentially increasing the insurgency’s numbers. The American-Iraqi security agreement requires the release of all detainees in American custody unless there is sufficient evidence to bring charges in an Iraqi court.
At least one former detainee has already blown himself up in a suicide attack.
Most of the latest attacks, at a time when overall violence is at its lowest level since the beginning of the war in 2003, have singled out Iraqis, but one development affects the Americans. A new weapon has appeared in Iraq: Russian-made RKG-3 grenades, which weigh just five pounds and, attached to parachutes, can be lobbed by a teenager but can penetrate the American military’s latest heavily armored vehicle, the MRAP. The grenades cost as little as $10, according to American military officials, who would not say how often they have killed soldiers.
To some experts, this amounts to ugly, but unavoidable, background noise, the deadly but no longer destabilizing face of violence in Iraq. In this view, there will be attacks, but no longer ones likely to topple Iraq’s government. Military officers, who spoke on the condition of anonymity because they were not authorized to talk to the news media, say they have reduced the number of jihadi militants to under 2,000, from about 3,800.
“In most places there isn’t an insurgency in Iraq anymore,” said an American military intelligence officer in Washington, who was not authorized to be quoted by name. “What we have now is a terrorism problem, and there is going to be a terrorism problem in Iraq for a long time.”
Other officials, Iraqi and American, are more worried. They observe jihadi and other insurgent groups activating networks of sleeper cells, which are already striking government and civilian targets. Insurgent groups linked to the rule of Mr. Hussein are also reviving.
Among the most powerful now is Nashqabandi, which is believed to have ties to a former Hussein deputy, Izzat Ibrahim al-Douri. The organization, which gets money from Iraqi exiles in Syria, formed an alliance with religious Sunni extremists, according to American and Iraqi military intelligence.
“Al Qaeda and the hard-core Saddamists are the main threats to the national security of Iraq,” said Mowaffak al-Rubaie, Iraq’s national security adviser.
“Nashqabandi is the cradle; they are providing logistical support for Al Qaeda,” he said. “What we are seeing is the resurgence of the hard-core Saddamists, but using Al Qaeda in Iraq as a front and as suicide bombers.”
American military officials believe they have checked the insurgency, but liken it to a spring. “It can come up quickly as soon as it is released, but the longer you keep it down the less it rebounds,” said Col. James Phelps, an insurgency expert attached to the multinational force in Iraq. “Some Al Qaeda in Iraq leadership did go to ground,” he said.
In interviews with 14 leaders of the Awakening movement, which has been credited with helping to reduce violence, all said they believed that the jihadi presence in their areas had increased, as American troops began to close combat outposts or hand them over to the Iraqi Army, a first step toward withdrawing entirely. The Awakening leaders reported signs of trouble: assassination attempts, homemade bombs placed near their homes or under their cars, leaflets urging them not to work with the Iraqi government.
“We notice when there is a bomb buried on a back road where there has not been one before,” said Sheik Awad al-Harbousi, whose Awakening group works in Taji, north of Baghdad, much of it empty country traversed by rugged dirt roads. One of his fighters was killed three weeks ago and two were wounded.
Undermining the stability of the last few months is rising friction between the Awakening Councils and the Iraqi Army and the police, much of it with a sectarian edge. The tensions turned violent in Baghdad on Saturday, when members of the Awakening Council in the Fadhil neighborhood of Baghdad had a shootout with a combined American and Iraqi force.
The Awakening Councils are largely Sunni, while the security forces are dominated by Shiites. Many Awakening members are angry because promises of jobs in the Shiite-dominated government have not been kept.
In Dhuluiya, in eastern Salahuddin Province, deep in the Tigris River Valley, Mullah Nadhim al-Jubori, a onetime insurgent linked to Islamic extremists who became an Awakening leader, worries that the situation is fraying.
He ticked off seven troubling events over the last month, including the abduction of four of his men. Two were executed and two were released after a ransom was paid.
“The ransom was picked up in Baghdad,” he said. “That tells me there is good coordination and organization among Al Qaeda members.”
A few of his followers have changed sides. During the last four months, 12 Awakening members were arrested as double agents, accused of killing Awakening leaders, Mr. Nadhim said.
Farther east, in Diyala Province, the situation is worse. The insurgency has never been fully eradicated there, according to the American and Iraqi military. The province’s geography favors those who know its dry high hills, empty patches of desert and thick groves of date palms.
While the province is far more secure than in 2006 and 2007, when the provincial capital, Baquba, was known locally as “the city of death,” attacks are now increasing. Forty-three people were killed in Diyala in March, up from 29 in February and 6 in January, according to the Diyala Operations Command.
Ali Al-Tamimi, the chief of the Provincial Council’s security committee, predicted an increase in violence both in Baghdad and in Baquba because the security commanders had not acted on warnings about the growing activities of armed groups within an hour of Baghdad.
“We have told them that Al Qaeda is still present in some neighborhoods and villages,” he said. “They have not done enough to stop them.”
Suadad al-Salhy and Mohamed Hussein contributed reporting from Baghdad, and an Iraqi employee of The New York Times from Diyala Province.
BAGHDAD — As the American military prepares to withdraw from Iraqi cities, Iraqi and American security officials say that jihadi and Baath militants are rejoining the fight in areas that are largely quiet now, regrouping as a smaller but still lethal insurgency.
There is much debate as to whether any new insurgency, at a time of relative calm in most of Iraq, could ever produce the same levels of violence as existed at the height of the fighting here. A recent series of attacks, however, like bubbles that indicate fish beneath still water, suggest the potential danger, all the more perilous now because the American troops who helped to pacify Iraq are leaving.
Several well-planned bombings, one on a street recently reopened because it was thought to be safe, have killed 123 people, most of them in and around Baghdad. Three were suicide bombings, signatures of Al Qaeda in Mesopotamia, a homegrown Sunni extremist group with some foreign leadership.
Assassination attempts on members of the Awakening movement, some of them former insurgents who switched sides for pay, are rising, as are fears that some of the members are joining Islamic extremists or other insurgent groups. On Saturday an important Awakening leader was arrested on charges, among others, of being a member of the military wing of the outlawed Baath Party, formerly led by Saddam Hussein.
Detainees, some innocent, but many of them former insurgents long held in American military custody, are being set free every day, potentially increasing the insurgency’s numbers. The American-Iraqi security agreement requires the release of all detainees in American custody unless there is sufficient evidence to bring charges in an Iraqi court.
At least one former detainee has already blown himself up in a suicide attack.
Most of the latest attacks, at a time when overall violence is at its lowest level since the beginning of the war in 2003, have singled out Iraqis, but one development affects the Americans. A new weapon has appeared in Iraq: Russian-made RKG-3 grenades, which weigh just five pounds and, attached to parachutes, can be lobbed by a teenager but can penetrate the American military’s latest heavily armored vehicle, the MRAP. The grenades cost as little as $10, according to American military officials, who would not say how often they have killed soldiers.
To some experts, this amounts to ugly, but unavoidable, background noise, the deadly but no longer destabilizing face of violence in Iraq. In this view, there will be attacks, but no longer ones likely to topple Iraq’s government. Military officers, who spoke on the condition of anonymity because they were not authorized to talk to the news media, say they have reduced the number of jihadi militants to under 2,000, from about 3,800.
“In most places there isn’t an insurgency in Iraq anymore,” said an American military intelligence officer in Washington, who was not authorized to be quoted by name. “What we have now is a terrorism problem, and there is going to be a terrorism problem in Iraq for a long time.”
Other officials, Iraqi and American, are more worried. They observe jihadi and other insurgent groups activating networks of sleeper cells, which are already striking government and civilian targets. Insurgent groups linked to the rule of Mr. Hussein are also reviving.
Among the most powerful now is Nashqabandi, which is believed to have ties to a former Hussein deputy, Izzat Ibrahim al-Douri. The organization, which gets money from Iraqi exiles in Syria, formed an alliance with religious Sunni extremists, according to American and Iraqi military intelligence.
“Al Qaeda and the hard-core Saddamists are the main threats to the national security of Iraq,” said Mowaffak al-Rubaie, Iraq’s national security adviser.
“Nashqabandi is the cradle; they are providing logistical support for Al Qaeda,” he said. “What we are seeing is the resurgence of the hard-core Saddamists, but using Al Qaeda in Iraq as a front and as suicide bombers.”
American military officials believe they have checked the insurgency, but liken it to a spring. “It can come up quickly as soon as it is released, but the longer you keep it down the less it rebounds,” said Col. James Phelps, an insurgency expert attached to the multinational force in Iraq. “Some Al Qaeda in Iraq leadership did go to ground,” he said.
In interviews with 14 leaders of the Awakening movement, which has been credited with helping to reduce violence, all said they believed that the jihadi presence in their areas had increased, as American troops began to close combat outposts or hand them over to the Iraqi Army, a first step toward withdrawing entirely. The Awakening leaders reported signs of trouble: assassination attempts, homemade bombs placed near their homes or under their cars, leaflets urging them not to work with the Iraqi government.
“We notice when there is a bomb buried on a back road where there has not been one before,” said Sheik Awad al-Harbousi, whose Awakening group works in Taji, north of Baghdad, much of it empty country traversed by rugged dirt roads. One of his fighters was killed three weeks ago and two were wounded.
Undermining the stability of the last few months is rising friction between the Awakening Councils and the Iraqi Army and the police, much of it with a sectarian edge. The tensions turned violent in Baghdad on Saturday, when members of the Awakening Council in the Fadhil neighborhood of Baghdad had a shootout with a combined American and Iraqi force.
The Awakening Councils are largely Sunni, while the security forces are dominated by Shiites. Many Awakening members are angry because promises of jobs in the Shiite-dominated government have not been kept.
In Dhuluiya, in eastern Salahuddin Province, deep in the Tigris River Valley, Mullah Nadhim al-Jubori, a onetime insurgent linked to Islamic extremists who became an Awakening leader, worries that the situation is fraying.
He ticked off seven troubling events over the last month, including the abduction of four of his men. Two were executed and two were released after a ransom was paid.
“The ransom was picked up in Baghdad,” he said. “That tells me there is good coordination and organization among Al Qaeda members.”
A few of his followers have changed sides. During the last four months, 12 Awakening members were arrested as double agents, accused of killing Awakening leaders, Mr. Nadhim said.
Farther east, in Diyala Province, the situation is worse. The insurgency has never been fully eradicated there, according to the American and Iraqi military. The province’s geography favors those who know its dry high hills, empty patches of desert and thick groves of date palms.
While the province is far more secure than in 2006 and 2007, when the provincial capital, Baquba, was known locally as “the city of death,” attacks are now increasing. Forty-three people were killed in Diyala in March, up from 29 in February and 6 in January, according to the Diyala Operations Command.
Ali Al-Tamimi, the chief of the Provincial Council’s security committee, predicted an increase in violence both in Baghdad and in Baquba because the security commanders had not acted on warnings about the growing activities of armed groups within an hour of Baghdad.
“We have told them that Al Qaeda is still present in some neighborhoods and villages,” he said. “They have not done enough to stop them.”
Suadad al-Salhy and Mohamed Hussein contributed reporting from Baghdad, and an Iraqi employee of The New York Times from Diyala Province.
Tuesday, March 31, 2009
Supreme Court Upholds Tobacco Award
Supreme Court Upholds Tobacco Award
Robert Barnes
Washington Post Staff Writer
March 31, 2009
The Supreme Court today dealt a blow to Philip Morris, saying it would not decide the cigarette maker's challenge of a punitive damages award brought by the widow of a longtime smoker that now is worth nearly $150 million.
The court's decision, announced in a one-sentence order, was a surprising and anticlimactic ending to a case that has bounded back and forth through the judicial system for nearly a decade. When an Oregon jury awarded Mayola Williams nearly $80 million following the death of her husband, Jesse, it was the largest award of its kind.
Even though the justices have strongly implied that the award was too large and twice sent the case back west, the Oregon Supreme Court found reasons to leave it as it was. After the Oregon justices declined to change the decision for a second time, attorneys for Philip Morris petitioned the high court to "vindicate" its authority.
Instead, the court today said it should not have accepted the case for a third time, and in the language of the court, dismissed the case as "improvidently granted."
Because the case was argued in early December and the court issued its decision only today, it suggests the justices had trouble coming together on how to solve the legal issues raised.
When it last considered the case, the court ruled 5 to 4 that the Oregon court had applied the wrong constitutional standard in reviewing the award. It strongly suggested the figure was too high and told the state court to make sure the jury had not awarded such heavy punitive damages -- which are aimed at discouraging companies from reprehensible behavior -- because of harm the cigarette maker might have done to others, rather than to Williams.
Instead, the Oregon justices rejected Philip Morris's challenge on the grounds of state law, saying the company's proposed jury instructions nearly 10 years prior had been insufficient. The Oregon court said it did not need to get to the question of the court's constitutional standards in order to uphold the award.
At oral arguments, Philip Morris lawyer Stephen M. Shapiro told the justices that the case had returned "because the Oregon court failed to follow this court's directions."
But the justices said that maybe the Oregon court had a point, after all.
Justice Stephen G. Breyer, who wrote the court's 2007 decision in the case, said he thought at first that Oregon was giving the court the "runaround." But after studying the case more closely, he said, "I'm not sure that I think that now."
Chief Justice John G. Roberts Jr. had suggested during the arguments that the court use the case to finally decide the question of whether there should be a cap on punitive damages.
The justices had declined to accept that issue when they took Philip Morris's petition, and doing so would likely have required additional briefing and more arguments.
It would have greatly raised the stakes of the case, and settled a question that big business and trial lawyers have battled over for years. The issue of whether large punitive damages awards are unconstitutional is one that has split the court in a way different from its ideological divide.
Because of interest that the company must pay, it is unclear exactly what the award is currently worth, but it was set at $143 million last June. Under Oregon law, it is to be split between the state and Mayola Williams.
Murray Garnick, a senior vice president at Altria, which owns Philip Morris, said while the company "had hoped for a different outcome," the court's decision today does not end a dispute over whether damages must be paid to Oregon. Philip Morris is seeking a ruling from an Oregon court to keep the state from collecting punitive damages in this case.
Robert Barnes
Washington Post Staff Writer
March 31, 2009
The Supreme Court today dealt a blow to Philip Morris, saying it would not decide the cigarette maker's challenge of a punitive damages award brought by the widow of a longtime smoker that now is worth nearly $150 million.
The court's decision, announced in a one-sentence order, was a surprising and anticlimactic ending to a case that has bounded back and forth through the judicial system for nearly a decade. When an Oregon jury awarded Mayola Williams nearly $80 million following the death of her husband, Jesse, it was the largest award of its kind.
Even though the justices have strongly implied that the award was too large and twice sent the case back west, the Oregon Supreme Court found reasons to leave it as it was. After the Oregon justices declined to change the decision for a second time, attorneys for Philip Morris petitioned the high court to "vindicate" its authority.
Instead, the court today said it should not have accepted the case for a third time, and in the language of the court, dismissed the case as "improvidently granted."
Because the case was argued in early December and the court issued its decision only today, it suggests the justices had trouble coming together on how to solve the legal issues raised.
When it last considered the case, the court ruled 5 to 4 that the Oregon court had applied the wrong constitutional standard in reviewing the award. It strongly suggested the figure was too high and told the state court to make sure the jury had not awarded such heavy punitive damages -- which are aimed at discouraging companies from reprehensible behavior -- because of harm the cigarette maker might have done to others, rather than to Williams.
Instead, the Oregon justices rejected Philip Morris's challenge on the grounds of state law, saying the company's proposed jury instructions nearly 10 years prior had been insufficient. The Oregon court said it did not need to get to the question of the court's constitutional standards in order to uphold the award.
At oral arguments, Philip Morris lawyer Stephen M. Shapiro told the justices that the case had returned "because the Oregon court failed to follow this court's directions."
But the justices said that maybe the Oregon court had a point, after all.
Justice Stephen G. Breyer, who wrote the court's 2007 decision in the case, said he thought at first that Oregon was giving the court the "runaround." But after studying the case more closely, he said, "I'm not sure that I think that now."
Chief Justice John G. Roberts Jr. had suggested during the arguments that the court use the case to finally decide the question of whether there should be a cap on punitive damages.
The justices had declined to accept that issue when they took Philip Morris's petition, and doing so would likely have required additional briefing and more arguments.
It would have greatly raised the stakes of the case, and settled a question that big business and trial lawyers have battled over for years. The issue of whether large punitive damages awards are unconstitutional is one that has split the court in a way different from its ideological divide.
Because of interest that the company must pay, it is unclear exactly what the award is currently worth, but it was set at $143 million last June. Under Oregon law, it is to be split between the state and Mayola Williams.
Murray Garnick, a senior vice president at Altria, which owns Philip Morris, said while the company "had hoped for a different outcome," the court's decision today does not end a dispute over whether damages must be paid to Oregon. Philip Morris is seeking a ruling from an Oregon court to keep the state from collecting punitive damages in this case.
Saturday, March 28, 2009
HEALTH CARE CHEATS!
Out-of-network insurance practices face scrutiny
By ERICA WERNER
Associated Press Writer
Ever wonder how that bill was calculated if you had to pay to see a doctor outside your insurance network?
Might be a scam, says a senator investigating the issue.
Sen. Jay Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, wants answers at a hearing Tuesday from the chief executives of UnitedHealth Group Inc. and its subsidiary Ingenix Inc., a claims database used by insurers nationwide to calculate out-of-network rates.
The inquiry follows lawsuits and an investigation by New York Attorney General Andrew Cuomo alleging that UnitedHealth and Ingenix manipulated rate data so insurers had to pay less and patients more for out-of-network services.
"They're lowballing deliberately. They deliberately cut the numbers so the consumer has to pay more of the cost," Rockefeller, D-W.Va., said in an interview with The Associated Press on Friday.
"It's scamming. It's fraud," he said.
In January, UnitedHealth agreed to pay $350 million to settle a suit by the American Medical Association and others over the issue. UnitedHealth did not admit wrongdoing. But, under pressure from Cuomo, the company agreed to pay $50 million toward creation of an independent claims database and eventually close down the Ingenix databases.
Cuomo has secured similar agreements from other major insurers, including WellPoint Inc., Aetna Inc., and Cigna Corp. The AMA is pursuing suits against those companies, too.
"Our view is that we've reached a resolution on this matter and we're moving forward," UnitedHealth spokesman Tyler Mason said in a voicemail message Friday. "We think it's positive that this information will continue to be made available in the health care marketplace so that people can make informed decisions."
A spokeswoman for Ingenix referred calls to UnitedHealth.
Rockefeller and other lawmakers, along with doctors and consumer groups, view the matter as far from over. They say more accountability and transparency is needed in how insurance companies determine out-of-network rates, and that patients need to understand how it's done to avoid sticker shock when they get their medical bills.
One such patient is Mary Jerome of Yonkers, N.Y. She went out of network to Memorial Sloan-Kettering Cancer Center after being diagnosed with ovarian cancer in 2006. When she began getting her bills she discovered that Memorial Sloan-Kettering was not being reimbursed by her insurer anywhere near as much as the center was charging and that she was responsible for paying the rest.
"I had to battle cancer — and I am still battling it — and I had to battle my insurance company to try and get fair coverage," Jerome told Rockefeller's committee in written testimony.
More than 70 percent of workers who get health care through their employers are enrolled in plans that allow them to go out of network, according to the Kaiser Family Foundation. Typically, those plans will pay a set percentage, say 70 percent, for an out-of-network visit.
But unknown to many consumers, when patients go out of network, their plan doesn't actually pay 70 percent of the doctor's visit cost. It pays 70 percent of what it determines is the "usual, customary and reasonable" cost for the procedure or doctor's visit in question.
Insurance companies determine that cost themselves or use figures from a database of their choosing, and there's scant regulation or oversight of how they do it.
In the case of UnitedHealth and Ingenix, they were allegedly manipulating claims data so that the "usual, customary and reasonable" costs they used were lower than they should have been, leaving patients to pay more. Cuomo's office said Ingenix was understating the market rate for doctor's visits across New York state by 10 percent to 28 percent.
A spokesman for the insurance industry group America's Health Insurance Plans blamed doctors for high out-of-network bills.
"Consumers would be shocked if they knew the exorbitant rates that some nonparticipating providers charge," Robert Zirkelbach said. He declined to respond to allegations that insurance companies knowingly under-reimburse, citing the pending litigation.
Even with the UnitedHealth settlement, lawmakers and others want bigger changes in the system so rate calculations are fairer and better understood. Rockefeller said federal legislation might be needed.
"You ask me how are their 'usual and customary' rates being determined?" Rockefeller said. "I don't know."
By ERICA WERNER
Associated Press Writer
Ever wonder how that bill was calculated if you had to pay to see a doctor outside your insurance network?
Might be a scam, says a senator investigating the issue.
Sen. Jay Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, wants answers at a hearing Tuesday from the chief executives of UnitedHealth Group Inc. and its subsidiary Ingenix Inc., a claims database used by insurers nationwide to calculate out-of-network rates.
The inquiry follows lawsuits and an investigation by New York Attorney General Andrew Cuomo alleging that UnitedHealth and Ingenix manipulated rate data so insurers had to pay less and patients more for out-of-network services.
"They're lowballing deliberately. They deliberately cut the numbers so the consumer has to pay more of the cost," Rockefeller, D-W.Va., said in an interview with The Associated Press on Friday.
"It's scamming. It's fraud," he said.
In January, UnitedHealth agreed to pay $350 million to settle a suit by the American Medical Association and others over the issue. UnitedHealth did not admit wrongdoing. But, under pressure from Cuomo, the company agreed to pay $50 million toward creation of an independent claims database and eventually close down the Ingenix databases.
Cuomo has secured similar agreements from other major insurers, including WellPoint Inc., Aetna Inc., and Cigna Corp. The AMA is pursuing suits against those companies, too.
"Our view is that we've reached a resolution on this matter and we're moving forward," UnitedHealth spokesman Tyler Mason said in a voicemail message Friday. "We think it's positive that this information will continue to be made available in the health care marketplace so that people can make informed decisions."
A spokeswoman for Ingenix referred calls to UnitedHealth.
Rockefeller and other lawmakers, along with doctors and consumer groups, view the matter as far from over. They say more accountability and transparency is needed in how insurance companies determine out-of-network rates, and that patients need to understand how it's done to avoid sticker shock when they get their medical bills.
One such patient is Mary Jerome of Yonkers, N.Y. She went out of network to Memorial Sloan-Kettering Cancer Center after being diagnosed with ovarian cancer in 2006. When she began getting her bills she discovered that Memorial Sloan-Kettering was not being reimbursed by her insurer anywhere near as much as the center was charging and that she was responsible for paying the rest.
"I had to battle cancer — and I am still battling it — and I had to battle my insurance company to try and get fair coverage," Jerome told Rockefeller's committee in written testimony.
More than 70 percent of workers who get health care through their employers are enrolled in plans that allow them to go out of network, according to the Kaiser Family Foundation. Typically, those plans will pay a set percentage, say 70 percent, for an out-of-network visit.
But unknown to many consumers, when patients go out of network, their plan doesn't actually pay 70 percent of the doctor's visit cost. It pays 70 percent of what it determines is the "usual, customary and reasonable" cost for the procedure or doctor's visit in question.
Insurance companies determine that cost themselves or use figures from a database of their choosing, and there's scant regulation or oversight of how they do it.
In the case of UnitedHealth and Ingenix, they were allegedly manipulating claims data so that the "usual, customary and reasonable" costs they used were lower than they should have been, leaving patients to pay more. Cuomo's office said Ingenix was understating the market rate for doctor's visits across New York state by 10 percent to 28 percent.
A spokesman for the insurance industry group America's Health Insurance Plans blamed doctors for high out-of-network bills.
"Consumers would be shocked if they knew the exorbitant rates that some nonparticipating providers charge," Robert Zirkelbach said. He declined to respond to allegations that insurance companies knowingly under-reimburse, citing the pending litigation.
Even with the UnitedHealth settlement, lawmakers and others want bigger changes in the system so rate calculations are fairer and better understood. Rockefeller said federal legislation might be needed.
"You ask me how are their 'usual and customary' rates being determined?" Rockefeller said. "I don't know."
Friday, March 27, 2009
Media Matters Reports
Pay no attention to the GOP "power grab" behind the curtain
This week, conservative media figures bombarded the media landscape with accusations that Treasury Secretary Timothy Geithner's proposal to allow the government to take over nonbank financial institutions amounted to a massive White House "power grab." A chilling accusation to be sure, especially when one considers the unprecedented abuses of power that occurred on President Bush's watch. In the words of Fox News' Sean Hannity, Geithner's plan is "the single biggest power grab and move toward socialism in the history of the country."
Others in the media uncritically cited such conservative claims, including House Minority Leader John Boehner's (R-OH) charge that Geithner's proposal constitutes "an unprecedented grab of power," despite the fact that the budget blueprint released by House Republicans, including Boehner, contained a call for "a process to address insolvent institutions that stops throwing good money after bad into failing institutions and places insolvent ones into temporary receivership." The GOP's proposal raises the question of whether the media, which reported ad nauseam on the charge that Geithner and the White House are engaging in a "power grab" by asking Congress for this authority, will now note that the same House Republican caucus that made the charge has now proposed giving the federal government similar authority. Hypocrisy, anyone?
Of course, the central question remains: How can it possibly be a power "grab" if the Obama administration is seeking this authority from Congress -- a coequal branch of government?
Where's W? The disappearing of a president
Like last week, much of the coverage this week of the AIG executive bonuses was devoid of any mention of the Bush administration's role in the controversy. A USA Today/Gallup poll question about who was to blame for the AIG bonuses conveniently left out the Bush administration as a possible response, despite the administration's decision to give AIG billions in aid without requiring that the company withhold the bonuses. Similarly, a Wall Street Journal article about Geithner and his aides' involvement in decisions about AIG's bonus payments did not note that it was the Bush administration that negotiated a November 2008 stock purchase agreement with AIG through which the Bush Treasury Department injected $40 billion into the company without requiring that the bonus contracts be nullified.
Worse yet, the conservative Washington Times took things a step further, reporting GOP criticism of Democrats over the AIG bonus issue and quoting a Republican strategist asserting: "This is not something [Democrats] can point to George Bush. ... They own the issue of giving bonuses to the AIG executives." Glaringly absent was any mention that the $53 million in AIG bonuses that the article mentioned were reportedly paid out under the Bush administration or that a Bush-appointed special inspector general for TARP has stated that the Bush Treasury Department knew about the AIG bonus contracts and did not insist on their cancellation as a condition of AIG's receiving bailout money.
For the media, laughter is not the best medicine
Media Matters for America this week released a compelling online video, titled "Infectious Laughter: The Epidemiology of a Smear," that demonstrates in detail how the conservative echo chamber operates, using President Obama's interview with Steve Kroft on CBS' 60 Minutes from last weekend as a case study. Echoing a March 22 Politico article, discussion of Obama's laughter was hyped by the Drudge Report. Additionally, the March 23 editions of several morning news shows featured segments on Obama's laughter during the interview. The segments, which aired on NBC's Today, MSNBC's Morning Joe, MSNBC Live, and Fox News' Fox & Friends, are reminiscent of the media's echoing of the Drudge Report, among others, in seizing on Hillary Clinton's laugh as a new subject of attention in September 2007 following Clinton's appearance on all five Sunday political talk shows. Whereas commentators speculated whether Clinton's laughter -- which some described as a "cackle" -- was evidence of her "calculating" nature, according to the Politico article, Obama's "awkward laughter highlighted an issue Obama has faced dating back to the campaign, a sense that he sometimes is too 'cool' and detached to fully grasp the public anxiety over mounting job losses and economic worries." Morning Joe co-host Mika Brzezinski, however, challenged her co-hosts' fixation on the topic, stating, "I don't care who's laughing. ... I want to look at the plan and really assess it fairly. Tone is one thing; we'll see what the action is."
Reading from Limbaugh's teleprompter
Almost daily over the past several weeks, conservative leader Rush Limbaugh has been fixated on Obama's use of a teleprompter. Despite the fact that such a device has commonly been used by media figures and past presidents of both political parties, Limbaugh presses on, day-after-day, taking every opportunity to lambaste what he refers to as "TOTUS," or the "teleprompter of the United States."
Apparently reading directly from Limbaugh's own personal teleprompter, several conservative media figures -- including Matt Drudge and Sean Hannity -- uncritically highlighted a March 18 SkyNews.com report that a "teleprompt blunder has led to Barack Obama thanking himself in a speech at the White House in a St Patrick's Day celebration." But as Toby Harnden, U.S. editor for the U.K.'s Telegraph, noted, the pool report of Obama's March 17 event with Irish Prime Minister Brian Cowen indicates that in saying, "First, I'd like to say thank you to President Obama," Obama was, in Harnden's words, making "a good-natured and well-received joke" at the expense of Cowen, who earlier in the event had mistakenly read from the teleprompter displaying Obama's speech. Indeed, as early as March 18, Fox News anchor Bret Baier reported that Obama had "jokingly" made the comments in question.
The ghost of George Will's presence
Last month, The Washington Post's George Will faced intense, widespread criticism for dubious global warming claims he made in two separate columns. It now appears The New York Times Magazine has been possessed by Will's science-denying spirit, as it is slated to run a profile of physicist and global warming skeptic Freeman Dyson this weekend.
The profile quotes without challenge Dyson's false suggestion that there was a scientific consensus in the 1970s that the earth was cooling. Unlike the current consensus that global warming exists, there was no consensus in the 1970s that the earth was cooling. A September 2008 article in the Bulletin of the American Meteorological Society (a peer-reviewed publication) investigated the "pervasive myth" that "there was a consensus among climate scientists of the 1970s that either global cooling or a full-fledged ice age was imminent." The article found:
A review of the climate science literature from 1965 to 1979 shows this myth to be false. The myth's basis lies in a selective misreading of the texts both by some members of the media at the time and by some observers today. In fact, emphasis on greenhouse warming dominated the scientific literature even then.
Additionally, The New York Times Magazine sent Nicholas Dawidoff, whom Brad Johnson refers to as a "baseball writer" and who has not previously written about science for the Times, to profile Dyson. Dawidoff has published four books -- The Fly Swatter, a biography of his grandfather Alexander Gerschenkron; In the Country of Country, a collection of biographies of country musicians; The Catcher Was A Spy: The Mysterious Life Of Moe Berg; and The Crowd Sounds Happy: A Story of Love, Madness and Baseball -- and began his career covering baseball for Sports Illustrated. Dawidoff not only allowed Dyson to advance the previously mentioned falsehood about global cooling, he also quoted Dyson accusing Al Gore of being global warming's "chief propagandist" and "an opportunist" and accusing scientist James Hansen, the head of the NASA Goddard Institute for Space Studies, of "consistently exaggerat[ing] all the dangers" of global warming.
Be sure to check out these lists of Dawidoff's previous articles for The New York Times Magazine and The New York Times.
Clearing up Kudlow's intentions
As Washington Post Co. blogger Greg Sargent noted this week, Media Matters has launched Financial Media Matters, a website dedicated to holding accountable those who report on the financial industry, as well as those who report on labor, the economy, and other fiscal matters. The new website will focus extensively on ensuring that outlets such as CNBC, Fox Business Network, and The Wall Street Journal are held accountable.
Also, following CNBC host Larry Kudlow's expression of interest in running for U.S. Senate in Connecticut, Media Matters President Eric Burns wrote an open letter last week to CNBC President Mark Hoffman that stated, in part, that Kudlow "is either a journalist or a candidate; he cannot be both. ... As a private citizen, [he] has a right to explore a run for public office, but using his platform as a CNBC host to further his political ambitions jeopardizes the integrity of your network." This week, Kudlow announced that he will not run for Senate, as The New York Times and the Hartford Courant, among others, noted.
This week's media columns
Media Matters Senior Fellows Eric Boehlert, Jamison Foser, and Karl Frisch look at Jeff Zucker and the CNBC straw man, deficient budget coverage, and the right's toxic assets, respectively.
This week, conservative media figures bombarded the media landscape with accusations that Treasury Secretary Timothy Geithner's proposal to allow the government to take over nonbank financial institutions amounted to a massive White House "power grab." A chilling accusation to be sure, especially when one considers the unprecedented abuses of power that occurred on President Bush's watch. In the words of Fox News' Sean Hannity, Geithner's plan is "the single biggest power grab and move toward socialism in the history of the country."
Others in the media uncritically cited such conservative claims, including House Minority Leader John Boehner's (R-OH) charge that Geithner's proposal constitutes "an unprecedented grab of power," despite the fact that the budget blueprint released by House Republicans, including Boehner, contained a call for "a process to address insolvent institutions that stops throwing good money after bad into failing institutions and places insolvent ones into temporary receivership." The GOP's proposal raises the question of whether the media, which reported ad nauseam on the charge that Geithner and the White House are engaging in a "power grab" by asking Congress for this authority, will now note that the same House Republican caucus that made the charge has now proposed giving the federal government similar authority. Hypocrisy, anyone?
Of course, the central question remains: How can it possibly be a power "grab" if the Obama administration is seeking this authority from Congress -- a coequal branch of government?
Where's W? The disappearing of a president
Like last week, much of the coverage this week of the AIG executive bonuses was devoid of any mention of the Bush administration's role in the controversy. A USA Today/Gallup poll question about who was to blame for the AIG bonuses conveniently left out the Bush administration as a possible response, despite the administration's decision to give AIG billions in aid without requiring that the company withhold the bonuses. Similarly, a Wall Street Journal article about Geithner and his aides' involvement in decisions about AIG's bonus payments did not note that it was the Bush administration that negotiated a November 2008 stock purchase agreement with AIG through which the Bush Treasury Department injected $40 billion into the company without requiring that the bonus contracts be nullified.
Worse yet, the conservative Washington Times took things a step further, reporting GOP criticism of Democrats over the AIG bonus issue and quoting a Republican strategist asserting: "This is not something [Democrats] can point to George Bush. ... They own the issue of giving bonuses to the AIG executives." Glaringly absent was any mention that the $53 million in AIG bonuses that the article mentioned were reportedly paid out under the Bush administration or that a Bush-appointed special inspector general for TARP has stated that the Bush Treasury Department knew about the AIG bonus contracts and did not insist on their cancellation as a condition of AIG's receiving bailout money.
For the media, laughter is not the best medicine
Media Matters for America this week released a compelling online video, titled "Infectious Laughter: The Epidemiology of a Smear," that demonstrates in detail how the conservative echo chamber operates, using President Obama's interview with Steve Kroft on CBS' 60 Minutes from last weekend as a case study. Echoing a March 22 Politico article, discussion of Obama's laughter was hyped by the Drudge Report. Additionally, the March 23 editions of several morning news shows featured segments on Obama's laughter during the interview. The segments, which aired on NBC's Today, MSNBC's Morning Joe, MSNBC Live, and Fox News' Fox & Friends, are reminiscent of the media's echoing of the Drudge Report, among others, in seizing on Hillary Clinton's laugh as a new subject of attention in September 2007 following Clinton's appearance on all five Sunday political talk shows. Whereas commentators speculated whether Clinton's laughter -- which some described as a "cackle" -- was evidence of her "calculating" nature, according to the Politico article, Obama's "awkward laughter highlighted an issue Obama has faced dating back to the campaign, a sense that he sometimes is too 'cool' and detached to fully grasp the public anxiety over mounting job losses and economic worries." Morning Joe co-host Mika Brzezinski, however, challenged her co-hosts' fixation on the topic, stating, "I don't care who's laughing. ... I want to look at the plan and really assess it fairly. Tone is one thing; we'll see what the action is."
Reading from Limbaugh's teleprompter
Almost daily over the past several weeks, conservative leader Rush Limbaugh has been fixated on Obama's use of a teleprompter. Despite the fact that such a device has commonly been used by media figures and past presidents of both political parties, Limbaugh presses on, day-after-day, taking every opportunity to lambaste what he refers to as "TOTUS," or the "teleprompter of the United States."
Apparently reading directly from Limbaugh's own personal teleprompter, several conservative media figures -- including Matt Drudge and Sean Hannity -- uncritically highlighted a March 18 SkyNews.com report that a "teleprompt blunder has led to Barack Obama thanking himself in a speech at the White House in a St Patrick's Day celebration." But as Toby Harnden, U.S. editor for the U.K.'s Telegraph, noted, the pool report of Obama's March 17 event with Irish Prime Minister Brian Cowen indicates that in saying, "First, I'd like to say thank you to President Obama," Obama was, in Harnden's words, making "a good-natured and well-received joke" at the expense of Cowen, who earlier in the event had mistakenly read from the teleprompter displaying Obama's speech. Indeed, as early as March 18, Fox News anchor Bret Baier reported that Obama had "jokingly" made the comments in question.
The ghost of George Will's presence
Last month, The Washington Post's George Will faced intense, widespread criticism for dubious global warming claims he made in two separate columns. It now appears The New York Times Magazine has been possessed by Will's science-denying spirit, as it is slated to run a profile of physicist and global warming skeptic Freeman Dyson this weekend.
The profile quotes without challenge Dyson's false suggestion that there was a scientific consensus in the 1970s that the earth was cooling. Unlike the current consensus that global warming exists, there was no consensus in the 1970s that the earth was cooling. A September 2008 article in the Bulletin of the American Meteorological Society (a peer-reviewed publication) investigated the "pervasive myth" that "there was a consensus among climate scientists of the 1970s that either global cooling or a full-fledged ice age was imminent." The article found:
A review of the climate science literature from 1965 to 1979 shows this myth to be false. The myth's basis lies in a selective misreading of the texts both by some members of the media at the time and by some observers today. In fact, emphasis on greenhouse warming dominated the scientific literature even then.
Additionally, The New York Times Magazine sent Nicholas Dawidoff, whom Brad Johnson refers to as a "baseball writer" and who has not previously written about science for the Times, to profile Dyson. Dawidoff has published four books -- The Fly Swatter, a biography of his grandfather Alexander Gerschenkron; In the Country of Country, a collection of biographies of country musicians; The Catcher Was A Spy: The Mysterious Life Of Moe Berg; and The Crowd Sounds Happy: A Story of Love, Madness and Baseball -- and began his career covering baseball for Sports Illustrated. Dawidoff not only allowed Dyson to advance the previously mentioned falsehood about global cooling, he also quoted Dyson accusing Al Gore of being global warming's "chief propagandist" and "an opportunist" and accusing scientist James Hansen, the head of the NASA Goddard Institute for Space Studies, of "consistently exaggerat[ing] all the dangers" of global warming.
Be sure to check out these lists of Dawidoff's previous articles for The New York Times Magazine and The New York Times.
Clearing up Kudlow's intentions
As Washington Post Co. blogger Greg Sargent noted this week, Media Matters has launched Financial Media Matters, a website dedicated to holding accountable those who report on the financial industry, as well as those who report on labor, the economy, and other fiscal matters. The new website will focus extensively on ensuring that outlets such as CNBC, Fox Business Network, and The Wall Street Journal are held accountable.
Also, following CNBC host Larry Kudlow's expression of interest in running for U.S. Senate in Connecticut, Media Matters President Eric Burns wrote an open letter last week to CNBC President Mark Hoffman that stated, in part, that Kudlow "is either a journalist or a candidate; he cannot be both. ... As a private citizen, [he] has a right to explore a run for public office, but using his platform as a CNBC host to further his political ambitions jeopardizes the integrity of your network." This week, Kudlow announced that he will not run for Senate, as The New York Times and the Hartford Courant, among others, noted.
This week's media columns
Media Matters Senior Fellows Eric Boehlert, Jamison Foser, and Karl Frisch look at Jeff Zucker and the CNBC straw man, deficient budget coverage, and the right's toxic assets, respectively.
assisted-suicide
Different assisted-suicide groups, one goal
The Times wrongly sees a difference between the Final Exit Network and the assisted-suicide laws promoted by organizations such as Compassion and Choices.
By Stanton J. Price
March 27, 2009
The recent arrests of four members of the Final Exit Network in Georgia have drawn more national attention to the issue of assisted suicide. According to The Times' March 23 editorial, "Sense and suicide," the organization has been involved in about 200 deaths across the country. This group has advised, consulted and even allegedly had its counselors facilitate suicides using helium tanks and plastic bags. Investigations in many of the cases have led authorities to question just how involved officials of the Final Exit Network were in the deaths of its members.
The Times says that the Final Exit Network does harm to the kind of physician-assisted suicide currently legal in Oregon and Washington. Such laws were heavily promoted by the group Compassion and Choices, a national organization that works for assisted-suicide legalization. It was a key player in the legalization efforts in Washington and Oregon as well as in failed attempts elsewhere around the country, including California.
While the groups may have different tactics, the goals of the Final Exit Network and Compassion and Choices are practically the same. Both want to see assisted suicide expanded to anyone who perceives himself to be suffering, and the relationship between the two groups goes beyond their shared cause. According to the timeline on Compassion and Choices’ web site, the group formed in 1980 as the Hemlock Society; it later merged with another organization to become what we now know as Compassion and Choices. Hemlock Society founder Derek Humphry is a member of the Final Exit Network's advisory board and author of the book, "Final Exit," first published in 1991. Both Compassion and Choices and the Final Exit Network are active members of the World Federation of Right to Die Societies. The only real difference between the two groups is the way they seek to expand assisted suicide.
Both Compassion and Choices and the Final Exit Network take the definition of "intolerable suffering" beyond terminal illness. They believe that a person suffering from a condition that he or she believes is unbearable (rightly or wrongly) should legally be allowed assistance in ending their own life, whether by inhaling helium from a tank or overdosing on barbiturates. This is a frightening prospect for people with disabilities, particularly those who think they may be burdens on their family and for those of us fighting for disability rights.
If, as The Times writes, there may be growing societal tolerance of expanding this practice, it is not an intellectual stretch to argue that people perceived by themselves or someone else to be undergoing "intolerable suffering" should have access to assisted suicide. Given our current economic climate, the lack of adequate healthcare for many and the stigma placed on those with chronic disease or disability, I do not share the faith in society or in our politicians such laws require. This dubious fight waged by the Final Exit Network and Compassion and Choices equates to dangerous public policy and places far too many vulnerable people in harm's way.
For The Times to write about the Final Exit Network, "Society is unlikely ever to condone the kind of ethically questionable 'help' such groups offer," is naive. When this issue was before the California Senate's Judiciary Committee two years ago, then-state Sen. Joe Dunn (D-Santa Ana) voted against the bill and said that he "could not resolve the risk that the power of money will ultimately define [assisted suicide's] parameters." To me, Dunn has a more realistic view of society than The Times.
Stanton J. Price is a health lawyer and member of the Los Angeles County Bar Assn.'s Bioethics Committee, which he recently co-chaired.
The Times wrongly sees a difference between the Final Exit Network and the assisted-suicide laws promoted by organizations such as Compassion and Choices.
By Stanton J. Price
March 27, 2009
The recent arrests of four members of the Final Exit Network in Georgia have drawn more national attention to the issue of assisted suicide. According to The Times' March 23 editorial, "Sense and suicide," the organization has been involved in about 200 deaths across the country. This group has advised, consulted and even allegedly had its counselors facilitate suicides using helium tanks and plastic bags. Investigations in many of the cases have led authorities to question just how involved officials of the Final Exit Network were in the deaths of its members.
The Times says that the Final Exit Network does harm to the kind of physician-assisted suicide currently legal in Oregon and Washington. Such laws were heavily promoted by the group Compassion and Choices, a national organization that works for assisted-suicide legalization. It was a key player in the legalization efforts in Washington and Oregon as well as in failed attempts elsewhere around the country, including California.
While the groups may have different tactics, the goals of the Final Exit Network and Compassion and Choices are practically the same. Both want to see assisted suicide expanded to anyone who perceives himself to be suffering, and the relationship between the two groups goes beyond their shared cause. According to the timeline on Compassion and Choices’ web site, the group formed in 1980 as the Hemlock Society; it later merged with another organization to become what we now know as Compassion and Choices. Hemlock Society founder Derek Humphry is a member of the Final Exit Network's advisory board and author of the book, "Final Exit," first published in 1991. Both Compassion and Choices and the Final Exit Network are active members of the World Federation of Right to Die Societies. The only real difference between the two groups is the way they seek to expand assisted suicide.
Both Compassion and Choices and the Final Exit Network take the definition of "intolerable suffering" beyond terminal illness. They believe that a person suffering from a condition that he or she believes is unbearable (rightly or wrongly) should legally be allowed assistance in ending their own life, whether by inhaling helium from a tank or overdosing on barbiturates. This is a frightening prospect for people with disabilities, particularly those who think they may be burdens on their family and for those of us fighting for disability rights.
If, as The Times writes, there may be growing societal tolerance of expanding this practice, it is not an intellectual stretch to argue that people perceived by themselves or someone else to be undergoing "intolerable suffering" should have access to assisted suicide. Given our current economic climate, the lack of adequate healthcare for many and the stigma placed on those with chronic disease or disability, I do not share the faith in society or in our politicians such laws require. This dubious fight waged by the Final Exit Network and Compassion and Choices equates to dangerous public policy and places far too many vulnerable people in harm's way.
For The Times to write about the Final Exit Network, "Society is unlikely ever to condone the kind of ethically questionable 'help' such groups offer," is naive. When this issue was before the California Senate's Judiciary Committee two years ago, then-state Sen. Joe Dunn (D-Santa Ana) voted against the bill and said that he "could not resolve the risk that the power of money will ultimately define [assisted suicide's] parameters." To me, Dunn has a more realistic view of society than The Times.
Stanton J. Price is a health lawyer and member of the Los Angeles County Bar Assn.'s Bioethics Committee, which he recently co-chaired.
Thursday, March 26, 2009
Market Mystique PAUL KRUGMAN
On Monday, Lawrence Summers, the head of the National Economic Council, responded to criticisms of the Obama administration’s plan to subsidize private purchases of toxic assets. “I don’t know of any economist,” he declared, “who doesn’t believe that better functioning capital markets in which assets can be traded are a good idea.”
Leave aside for a moment the question of whether a market in which buyers have to be bribed to participate can really be described as “better functioning.” Even so, Mr. Summers needs to get out more. Quite a few economists have reconsidered their favorable opinion of capital markets and asset trading in the light of the current crisis.
But it has become increasingly clear over the past few days that top officials in the Obama administration are still in the grip of the market mystique. They still believe in the magic of the financial marketplace and in the prowess of the wizards who perform that magic.
The market mystique didn’t always rule financial policy. America emerged from the Great Depression with a tightly regulated banking system, which made finance a staid, even boring business. Banks attracted depositors by providing convenient branch locations and maybe a free toaster or two; they used the money thus attracted to make loans, and that was that.
And the financial system wasn’t just boring. It was also, by today’s standards, small. Even during the “go-go years,” the bull market of the 1960s, finance and insurance together accounted for less than 4 percent of G.D.P. The relative unimportance of finance was reflected in the list of stocks making up the Dow Jones Industrial Average, which until 1982 contained not a single financial company.
It all sounds primitive by today’s standards. Yet that boring, primitive financial system serviced an economy that doubled living standards over the course of a generation.
After 1980, of course, a very different financial system emerged. In the deregulation-minded Reagan era, old-fashioned banking was increasingly replaced by wheeling and dealing on a grand scale. The new system was much bigger than the old regime: On the eve of the current crisis, finance and insurance accounted for 8 percent of G.D.P., more than twice their share in the 1960s. By early last year, the Dow contained five financial companies — giants like A.I.G., Citigroup and Bank of America.
And finance became anything but boring. It attracted many of our sharpest minds and made a select few immensely rich.
Underlying the glamorous new world of finance was the process of securitization. Loans no longer stayed with the lender. Instead, they were sold on to others, who sliced, diced and pureed individual debts to synthesize new assets. Subprime mortgages, credit card debts, car loans — all went into the financial system’s juicer. Out the other end, supposedly, came sweet-tasting AAA investments. And financial wizards were lavishly rewarded for overseeing the process.
But the wizards were frauds, whether they knew it or not, and their magic turned out to be no more than a collection of cheap stage tricks. Above all, the key promise of securitization — that it would make the financial system more robust by spreading risk more widely — turned out to be a lie. Banks used securitization to increase their risk, not reduce it, and in the process they made the economy more, not less, vulnerable to financial disruption.
Sooner or later, things were bound to go wrong, and eventually they did. Bear Stearns failed; Lehman failed; but most of all, securitization failed.
Which brings us back to the Obama administration’s approach to the financial crisis.
Much discussion of the toxic-asset plan has focused on the details and the arithmetic, and rightly so. Beyond that, however, what’s striking is the vision expressed both in the content of the financial plan and in statements by administration officials. In essence, the administration seems to believe that once investors calm down, securitization — and the business of finance — can resume where it left off a year or two ago.
To be fair, officials are calling for more regulation. Indeed, on Thursday Tim Geithner, the Treasury secretary, laid out plans for enhanced regulation that would have been considered radical not long ago.
But the underlying vision remains that of a financial system more or less the same as it was two years ago, albeit somewhat tamed by new rules.
As you can guess, I don’t share that vision. I don’t think this is just a financial panic; I believe that it represents the failure of a whole model of banking, of an overgrown financial sector that did more harm than good. I don’t think the Obama administration can bring securitization back to life, and I don’t believe it should try.
Leave aside for a moment the question of whether a market in which buyers have to be bribed to participate can really be described as “better functioning.” Even so, Mr. Summers needs to get out more. Quite a few economists have reconsidered their favorable opinion of capital markets and asset trading in the light of the current crisis.
But it has become increasingly clear over the past few days that top officials in the Obama administration are still in the grip of the market mystique. They still believe in the magic of the financial marketplace and in the prowess of the wizards who perform that magic.
The market mystique didn’t always rule financial policy. America emerged from the Great Depression with a tightly regulated banking system, which made finance a staid, even boring business. Banks attracted depositors by providing convenient branch locations and maybe a free toaster or two; they used the money thus attracted to make loans, and that was that.
And the financial system wasn’t just boring. It was also, by today’s standards, small. Even during the “go-go years,” the bull market of the 1960s, finance and insurance together accounted for less than 4 percent of G.D.P. The relative unimportance of finance was reflected in the list of stocks making up the Dow Jones Industrial Average, which until 1982 contained not a single financial company.
It all sounds primitive by today’s standards. Yet that boring, primitive financial system serviced an economy that doubled living standards over the course of a generation.
After 1980, of course, a very different financial system emerged. In the deregulation-minded Reagan era, old-fashioned banking was increasingly replaced by wheeling and dealing on a grand scale. The new system was much bigger than the old regime: On the eve of the current crisis, finance and insurance accounted for 8 percent of G.D.P., more than twice their share in the 1960s. By early last year, the Dow contained five financial companies — giants like A.I.G., Citigroup and Bank of America.
And finance became anything but boring. It attracted many of our sharpest minds and made a select few immensely rich.
Underlying the glamorous new world of finance was the process of securitization. Loans no longer stayed with the lender. Instead, they were sold on to others, who sliced, diced and pureed individual debts to synthesize new assets. Subprime mortgages, credit card debts, car loans — all went into the financial system’s juicer. Out the other end, supposedly, came sweet-tasting AAA investments. And financial wizards were lavishly rewarded for overseeing the process.
But the wizards were frauds, whether they knew it or not, and their magic turned out to be no more than a collection of cheap stage tricks. Above all, the key promise of securitization — that it would make the financial system more robust by spreading risk more widely — turned out to be a lie. Banks used securitization to increase their risk, not reduce it, and in the process they made the economy more, not less, vulnerable to financial disruption.
Sooner or later, things were bound to go wrong, and eventually they did. Bear Stearns failed; Lehman failed; but most of all, securitization failed.
Which brings us back to the Obama administration’s approach to the financial crisis.
Much discussion of the toxic-asset plan has focused on the details and the arithmetic, and rightly so. Beyond that, however, what’s striking is the vision expressed both in the content of the financial plan and in statements by administration officials. In essence, the administration seems to believe that once investors calm down, securitization — and the business of finance — can resume where it left off a year or two ago.
To be fair, officials are calling for more regulation. Indeed, on Thursday Tim Geithner, the Treasury secretary, laid out plans for enhanced regulation that would have been considered radical not long ago.
But the underlying vision remains that of a financial system more or less the same as it was two years ago, albeit somewhat tamed by new rules.
As you can guess, I don’t share that vision. I don’t think this is just a financial panic; I believe that it represents the failure of a whole model of banking, of an overgrown financial sector that did more harm than good. I don’t think the Obama administration can bring securitization back to life, and I don’t believe it should try.
Wednesday, March 25, 2009
A NATION OF IDIOTS!
Dear A.I.G., I Quit!
The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.
DEAR Mr. Liddy,
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.
I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.
The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.
I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.
But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.
My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.
That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”
That may also be why you authorized the balance of the payments on March 13.
At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.
I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.
You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.
As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.
Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.
The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.
So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.
That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.
On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.
This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.
Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”
Sincerely,
Jake DeSantis
The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.
DEAR Mr. Liddy,
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.
I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.
The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.
I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.
But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.
My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.
That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”
That may also be why you authorized the balance of the payments on March 13.
At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.
I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.
You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.
As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.
Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.
The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.
So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.
That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.
On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.
This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.
Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”
Sincerely,
Jake DeSantis
OTC BIRTH CONTROL
In Defense of OTC Birth Control
Posted Tuesday, March 24, 2009 12:55 PM | By Kerry Howley
Emily and Torie, my grasp of the regulatory issues is imperfect, but it’s my understanding that a drug company would have to apply for over-the-counter status through the FDA. (I've never heard a single plausible medical justification for keeping birth control prescription-only.) There are various reasons why drug companies would not want to attempt this; the most obvious being that pharmaceutical companies can charge much higher prices for prescription drugs covered by insurance. Companies would also see resistance from gynecologists, who rely on their prescription powers to keep women coming back for annual appointments.
Torie, I understand your concern about insurance refusing to pay for OTC drugs, but it seems to me that your logic applies to every single drug that has gone over-the-counter, from Prilosec to Nicoderm. Keeping birth control prescription-only actually raises the cost for the poorest women—those without insurance who must pay retail at that the pharmacy counter and pay out of pocket for the doctor’s appointment required to get the prescription. When drugs go OTC the price plummets, so the cost to the consumer without insurance falls. Here's a blurb from a 2006 survey by the Pharmacy Access Partnership, a group that advocates for wider emergency contraception access:
Women said convenience, simplicity and affordability were their highest considerations when choosing their current contraceptive. Fifty-four percent of women also chose their method because it did not require a prescription. African-Americans (65%) were more likely to choose a method because it did not need a prescription, compared to Caucasians (51%) and Latinas (54%). Importantly, 20% of women said the cost of a visit to the doctor was an obstacle in obtaining a prescription contraceptive. Overall, 28% of women have had problems with obtaining a prescription for contraception, filling the prescription or getting to their supplies when they needed them. Women who had fewer resources to manage an unintended pregnancy (uninsured women, single women and younger women) were more likely to have experienced problems with obtaining a prescription for contraception.
Posted Tuesday, March 24, 2009 12:55 PM | By Kerry Howley
Emily and Torie, my grasp of the regulatory issues is imperfect, but it’s my understanding that a drug company would have to apply for over-the-counter status through the FDA. (I've never heard a single plausible medical justification for keeping birth control prescription-only.) There are various reasons why drug companies would not want to attempt this; the most obvious being that pharmaceutical companies can charge much higher prices for prescription drugs covered by insurance. Companies would also see resistance from gynecologists, who rely on their prescription powers to keep women coming back for annual appointments.
Torie, I understand your concern about insurance refusing to pay for OTC drugs, but it seems to me that your logic applies to every single drug that has gone over-the-counter, from Prilosec to Nicoderm. Keeping birth control prescription-only actually raises the cost for the poorest women—those without insurance who must pay retail at that the pharmacy counter and pay out of pocket for the doctor’s appointment required to get the prescription. When drugs go OTC the price plummets, so the cost to the consumer without insurance falls. Here's a blurb from a 2006 survey by the Pharmacy Access Partnership, a group that advocates for wider emergency contraception access:
Women said convenience, simplicity and affordability were their highest considerations when choosing their current contraceptive. Fifty-four percent of women also chose their method because it did not require a prescription. African-Americans (65%) were more likely to choose a method because it did not need a prescription, compared to Caucasians (51%) and Latinas (54%). Importantly, 20% of women said the cost of a visit to the doctor was an obstacle in obtaining a prescription contraceptive. Overall, 28% of women have had problems with obtaining a prescription for contraception, filling the prescription or getting to their supplies when they needed them. Women who had fewer resources to manage an unintended pregnancy (uninsured women, single women and younger women) were more likely to have experienced problems with obtaining a prescription for contraception.
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