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For Nebraska’s Poor, Get Sick and Get Sued

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Paul Kiel reports in ProPublica:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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There’s lots more. It’s a long article.

Written by LeisureGuy

29 April 2016 at 5:51 pm

Former Tax Lobbyists Are Writing the Rules on Tax Dodging

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Congress too often shrugs off its responsibilities to the public in favor of getting money from wealthy donors and corporations. So it is with tax policy, as reported by Lee Fang in The Intercept:

The secret tax-dodging strategies of the global elite in China, Russia, Brazil, the U.K., and beyond were exposed in speculator fashion by the recent Panama Papers investigation, fueling a worldwide demand for a crackdown on tax avoidance.

But there is little appetite in Congress for taking on powerful tax dodgers in the U.S., where the practice has become commonplace.

A request for comment about the Panama Papers to the two congressional committees charged with tax policy — House Ways & Means and the Senate Finance Committee — was ignored.

The reluctance by congressional leaders to tackle tax dodging is nothing new, especially given that some of the largest companies paying little to no federal taxes are among the biggest campaign contributors in the country. But there’s another reason to remain skeptical that Congress will move aggressively on tax avoidance: Former tax lobbyists now run the tax-writing committees.

We researched the backgrounds of the people who manage the day to day operations of both committees and found that a number of lobbyists who represented world-class tax avoiders now occupy top positions as committee staff. Many have stints in and out of government and the lobbying profession, a phenomenon known as the “reverse revolving door.” In other words, the lobbyists that help special interest groups and wealthy individuals minimize their tax bills are not only everywhere on K Street, they’re literally managing the bodies that create tax law: . . .

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The way that Congress now serves the wealthy and not the public is another sign of the decline of the US, IMO.

Written by LeisureGuy

27 April 2016 at 8:59 am

Signs of decline: Walmart’s Made-In-USA shell game

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Todd Oppenheimer writes in Craftsmanship magazine:

If you spend much time nosing around Walmart’s website, it won’t be long before you run into a rather bizarre sleight of hand.

First, to promote its devotion to American manufacturing, the world’s largest retailer ($482 billion in sales in 2015) created a special section of Walmart.com under the banner, “Made in USA.” Over time, this has enabled customers to gather hundreds of purchase options, each one claiming to have been made in America. An example is this T-shirt: “American Beauties Made in the USA Nose Art T-Shirt by Erazor Bits.”

If you look further into the product descriptions on this and other “Made-in-USA” items, you are greeted by this helpful note: “Important Made in USA Origin Disclaimer: For certain items sold by Walmart on Walmart.com, the displayed country of origin information may not be accurate or consistent with manufacturer information. For updated, accurate country of origin data, it is recommended that you rely on product packaging or manufacturer information.”

These disclaimers are often followed by Walmart’s additional squirms away from its original Made-in-USA claim. For the American Beauties T-shirt, for example, the manufacturer information that Walmart lists in its product specifications states the following: “Country of Origin—Components: USA and/or Imported… Country of Origin—Assembly: USA and/or Imported.”

The company’s little shell game used to be far more blatant than this. And the whole story has not been sitting well with Bonnie Patten, executive director of Truth in Advertising. Consider its odd history.

On July 14, 2015, Patten wrote an 8-page letter to the U.S. Federal Trade Commission (the agency charged with the nation’s consumer protection) complaining that Walmart was deceiving its customers. “Walmart.com is replete with false and deceptive advertising,” her letter stated. Even more curiously, Patten noted that after her organization had warned the company about the deceptions on June 22, the company promised to fix the problem (which it described as “coding errors”) within two weeks. Yet nothing had changed almost a month later. From that point forward, the twists and turns begin to multiply even further.

For months, there was little change. Finally, in the fall of 2015, . . .

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The decline in this case is the way the US government seems unable to do its job and fulfill its responsibilities to the people—and there is no accountability for the failure.

Written by LeisureGuy

26 April 2016 at 7:19 pm

Posted in Business, Government, Law

The political fight in Brazil, from Greenwald’s view

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A very interesting article by Glenn Greenwald in The Intercept on the politics surround the impeachment of Brazil’s president:

What was the most powerful man in Brazil, the billionaire heir of the Globo empire, João Roberto Marinho (above), doing in the comment section of The Guardian? Granted: his comment received a coveted “Recommended” tag from Guardian editors – congratulations, João! – but still, it is not the place one expects to find a multi-billionaire plutocratic Brazilian heir.

On Friday, April 21, I published an op-ed in The Guardian, in which I posed numerous questions about the impeachment process against Brazilian President Dilma Rousseff, as well as the role played by the dominant Brazilian media, led by Globo. João responded with anger – and with obvious falsehoods. As one can see, João criticized my article by calling me a liar in various ways in his response.

Look, João: like virtually all Brazilians, I had to battle a great deal to earn my place in life. I did not inherit a huge company and billions of dollars from my parents. The things I have had to overcome in my life are far more burdensome than your effort to discredit me with condescension, and it is thus not difficult to demonstrate that your response was filled with falsehoods.

In fact, João’s response deserves more attention than a mere comment because it is full of deceitful propaganda and pro-impeachment falsehoods – exactly what he tries to deny Globo has been spreading – and thus reveals a great deal (today, Guardian editors upgraded João’s comment into a full-fledged letter!).

Before addressing what João does say, let’s begin with something he neglects to mention: Globo’s long-standing role in Brazil. Under the rule of his father, Roberto Marinho, Globo cheered and glorified the 1964 military coup that removed Brazil’s democratically-elected left-wing government. Far worse, Globo, under the Marinho family, spent the next 20 years as the powerful propaganda arm of the brutal military dictatorship that tortured and killed dissidents and suppressed all dissent. In 1994, Globo simply and deliberately lied to the country when its on-air anchor described a massive pro-democracy protest on São Paulo as a celebration of the city’s birthday (they subsequently apologized for that as well). The Marinho family’s wealth and power grew as a direct result of their servitude to Brazil’s military dictators.

When anti-government protests erupted in 2013, by which time the military coup was widely despised by Brazilians, Globo’s history became a huge corporate embarrassment. So they did what all corporations do once their bad acts begin to hurt their brand: they finally acknowledged what they did and apologized for it. But they tried to dilute their responsibility by noting (accurately) that the other media outlets that still dominate Brazilian media and which have been as supportive of Dilma’s undemocratic exit (such as Estadão and Folha) also supported that coup, and they downplayed the role of Globo in supporting not only the coup but also the 20-year dictatorship that followed.

That is the ugly history of Globo and the Marinho family in Brazil, a major source of their wealth and power, and a reflection of the role they – and their highly-paid TV personalities – continue to play. It’s the same family running Globo now, governed by the same tactics and goals. That is not the conduct of a genuine media outlet. It is the conduct of an oligarchical family using its media outlet to shape and manipulate public opinion for its own purposes. Now, to João’s comment:

Mr. David Miranda’s article (“The real reason Dilma Rousseff’s enemies want her impeached,” from April 21, published by The Guardian) paints a completely false picture of what is happening in Brazil today. It fails to mention that everything began with an investigation (named Operation Carwash), which in turn revealed the largest bribery scheme and corruption scandal in the country’s history, involving leading members of the ruling Workers Party (PT), as well as leaders of other parties in the government coalition, public servants and business moguls.

What is “completely false” is João’s attempt to deceive readers into believing that Dilma’s impeachment is due to Lava Jato (Operation Car Wash). It is true that PT, like most of the major parties, has been revealed to be full of major corruption problems, and that many PT officials have been implicated by Lava Jato. But the case for Dilma’s impeachment is not based in any of that, but rather in claims that she manipulated the budget to make it look stronger than it was.

João’s misleading attempt to confuse a foreign audience by mixing the corruption and bribery scandals of Car Wash with Dilma’s impeachment exemplifies exactly the kind of pro-impeachment deceit and bias Globo has been institutionally disseminating for more than a year.

Beyond that, the political figures that Globo has been cheering and which impeachment will install – including Vice President Michel Temer andHouse Speaker Eduardo Cunha of the PMDB party – are, unlike Dilma, accused of serious personal corruption, proving that when people like João cite corruption to justify impeachment, that is merely the pretext for undemocratically removing the leader they dislike and installing the one they like.

The Brazilian press in general, and the Globo Group in particular, fulfilled their duty to inform about everything, as would have been the case in any other democracy in the world.

The suggestion that Globo is a neutral, unbiased news organization – rather than the leading propaganda arm of the Brazilian oligarchy – is laughable to anyone who has ever seen its programs. Indeed, the bias of Globo, and in particular its leading nightly news show Jornal Nacional, has been so extreme that it is now the source of regular mockery. There’s a reason pro-democracy street protesters choose Globo buildings as their target. . .

Continue reading.

Written by LeisureGuy

25 April 2016 at 4:03 pm

Elizabeth Warren’s big win: The new, much-needed rule that could rein in Wall Street

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Andrew Burstein and Nancy Isenberg report in Salon:

Are you in the market for some good news? While everyone is being told to follow the excitement of the 2016 campaign to the exclusion of all else, out of the spotlight but not far away, the Obama administration is calmly trying to enact lasting progressive change. In the Labor Department earlier this month, consumer advocates won a big battle, as the vast middle class was “gifted” with a new requirement being placed on the financial services industry. As Massachusetts Sen. Elizabeth Warren explained, a glaring conflict of interest has been resolved in the favor of people saving for retirement. No longer can investment advisers recommend funds to their clients that reward them or their firms; instead, they must, without exception, direct customers into the best financial products, with lower or, sometimes, zero fees.

In her inimitable style, Warren crowed: “No more pushing products that generate financial benefits for advisers, while draining the customer’s savings.” It’s a very simple principle: “No more free vacations, cars, bonuses, fees, and other kickbacks.” Her mantra, as we know, is fairness. Her legislative agenda is to introduce new legal protections for consumers. She is quick to point out that most financial advisers are ethical, and work hard to help their clients. But these individuals have, for many years, been forced to compete with “slick-talking” advisers whose recommendations reflect personal incentives and produce “terrible results” for middle-class savers, amounting, the Labor Department says, to many billions of dollars.

Firms must now make a full disclosure. Facing the music, the largest independent company that manages retirement savings, with $450 billion in retirement assets, right away cut account fees for investors by “up to 30 percent.” Retirees win. The system can adapt. As Warren stated: “Americans are tired of a Washington that works great for the big guys and doesn’t work for anyone else.”

You know who she sounds like? Frances Perkins, Franklin D. Roosevelt’s secretary of labor for the entirety of his presidency, and the first female cabinet member in U.S. history. She should never be forgotten. Having personally witnessed the Shirtwaist Triangle fire of 1911, a tragedy in New York’s Greenwich Village that took the lives of 146 garment workers, a young and inspired Fannie Perkins resolved to devote herself to the cause of the American worker. As the accomplished business journalist Kirstin Downey lays out in her 2009 biography, Perkins pushed constantly for child labor laws, for safety regulations and a host of other fair labor practices. To prevent workers from descending into poverty, she urged compensation for workplace injury; she saw to the imposition of a minimum wage for the first time–which in the mid-1930s was around 45 cents an hour–and she pioneered unemployment insurance as we know it.

As compellingly up-front, if perhaps less pleasantly in-your-face than Warren is, Perkins told FDR when he was president-elect to think twice about naming her to the cabinet: “If you don’t want these things done…, I’d be an embarrassment to you.” She fed public demand. Fortunately for Roosevelt’s own historical reputation, he was not afraid of a strong woman. It is arguable that, were it not for Secretary Perkins, Social Security would never have happened.

At the same event at which Warren spoke, Sen. Cory Booker put in his own two cents when it came to the resistance of established financial firms to the “best interest standard” that the DOL has given life to. The New Jersey senator called the previous system that for so long “bilked” investors of their retirement saving “an assault on the ideals of this country.” Under the old rules, brokers only had to honor a level of ethical performance that was euphemistically called a “suitability standard,” and Republicans predictably complained that the Obama administration was trying to place “an undue burden” on finance professionals. Booker, like Warren, would have none of that. “We’re not surrendering to cynicism in this country,” he challenged. . .

Continue reading.

Good news is always a pleasure, and a kudos to Obama for this.

Written by LeisureGuy

23 April 2016 at 10:02 am

GAO: JPMorgan Chase Customers Lost $5.4 Billion to Madoff

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Pam Martens and Russ Martens report in Wall Street on Parade:

Buried in a report released yesterday by the Government Accountability Office (GAO) was a stunning piece of news. Customers of JPMorgan Chase, the bank that Wall Street analyst Mike Mayo has preposterously called the “Lebron James of banking,” were major victims of Bernie Madoff’s Ponzi scheme – to the tune of $5.4 billion – because of negligence on the part of the bank. The report states the following:

“In 2014, DOJ [Department of Justice] assessed a $1.7 billion forfeiture – the largest penalty related to a BSA [Bank Secrecy Act] violation – against JPMorgan Chase Bank. DOJ cited the bank for its failure to detect and report the suspicious activities of Bernard Madoff. The bank failed to maintain an effective anti-money-laundering program and report suspicious transactions in 2008, which contributed to their customers losing about $5.4 billion in Bernard Madoff’s Ponzi scheme.”

The JPMorgan Chase settlement with the Justice Department came in January 2014, more than two years ago, but thus far, according to the GAO, Madoff victims haven’t seen a dime of the money. According to the Special Master for the Justice Department, he’s still wading through 64,000 claim forms. The Justice Department’s Madoff Victim Fund functions separately from the victims fund being operated by the bankruptcytrustee, Irving Picard. That fund has already distributed $8.6 billion out of $11.1 billion recovered to date. The forfeiture laws under which the Justice Department’s fund will be operated allowed Madoff victims who invested through feeder funds, as well as through a direct account with Madoff, to submit a claim.

JPMorgan Chase and banks it had purchased had held the Madoff business account for more than two decades. According to the Securities Investor Protection Corporation (SIPC), the Justice Department prosecutors who settled the criminal case against JPMorgan Chase in the Madoff matter used the investigative material that Picard had already unearthed. That investigative material showed that JPMorgan Chase had relied on unaudited financial statements and skipped the required steps of bank due diligence to make $145 million in loans to Madoff’s business.

Lawyers for Picard wrote that from November 2005 through January 18, 2006, JPMorgan Chase loaned $145 million to Madoff’s business at a time when the bank was on “notice of fraudulent activity” in Madoff’s business account and when, in fact, Madoff’s business was insolvent. . .

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Written by LeisureGuy

22 April 2016 at 11:11 am

NYPD bullies bodega owners

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Sometimes the NYPD seems indistinguishable from a mafia-style criminal organization/protection racket. Radley Balko reports in the Washington Post:

The infuriating story of the day comes from ProPublica and the New York Daily News. It seems that New York police have been using nuisance laws to harass immigrant owners of bodegas, laundromats, and other small businesses. They claim the businesses aren’t doing enough to prevent criminal activity, aren’t doing enough to prevent the sale of alcohol to minors or are guilty of some other inaction. They then threaten to shut the place down unless the owner gives police carte blanche to co-opt their surveillance cameras, search their stores, and spy on their customers. ProPublica and the Daily News reviewed 600 such cases. Among the many disturbing things they found:

  • “Nine out of 10 nuisance abatement actions were against businesses located in neighborhoods where most of the residents are minorities.”
  • “The police begin nearly every case with a secret application to a judge requesting an order closing the business while the case is being decided, and before the owner has had the opportunity to appear in court. Judges approved the closure requests 70% of the time.”
  • “NYPD lawyers justify these emergency orders by claiming the illegal activity at the location is ongoing and poses an immediate threat to the community. But the Daily News and ProPublica found the NYPD didn’t get around to filing cases until, on average, five months after the last offense cited.”
  • “Most cases resulted in settlements, 333 of which allow the NYPD to conduct warrantless searches. In 102 cases, the owner agreed to install cameras that the NYPD can access upon request. Another 127 settlements require storeowners to use electronic card readers that store customers’ ID information, also available to the NYPD upon request.”

Most of the alleged “nuisances” appear to have been manufactured by NYPD officers themselves, such as sending an undercover cop or informant into a business to entice customers into buying stolen iPads or other electronics. . .

Continue reading.

Written by LeisureGuy

22 April 2016 at 11:08 am

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